SINGAPORE: In his 2015 budget speech, Singapore’s Finance Minister, Tharman Shanmugaratnam, announced support for Singapore as an international maritime hub by extending the Maritime Sector Incentive (MSI).
The MSI, which allows ship operators, maritime lessors, and providers of certain shipping-related support services to enjoy an automatic withholding tax exemption, will now be extended to cover finance leases, hire-purchase arrangement, and loans used to inject equity into wholly owned special purpose vehicles (SPVs) or intercompany loans to SPVs for the purchase or construction of vessels, containers, and intermodal equipment.
Existing companies that already qualify for the MSI will now be allowed to renew their award for a further five years subject to qualifying conditions and commitments. In addition, the concessionary tax rate of 5-10 percent for maritime lessors will now cover income derived from finance leases treated as a sale.
The new measures will take effect from February 24, 2015, with further details to be released by the Maritime and Port Authority of Singapore in May 2015.
