The Monetary Authority of Singapore set out more detail on changes to its Financial Sector Incentive scheme announced earlier this year which is designed to give concessionary tax rates on income arising from certain business carried out in the city-state.

As explained in a note from international law firm Baker & McKenzie, the changes include an extension to the application period for the FSI scheme to 31 December 2018. This applies to all such schemes apart from the FSI-Islamic Finance scheme which expired on 31 March.

Among other changes, several of the FSI sub-schemes will merge from 1 January 2014. The sub-schemes going forward are FSI-Standard Tier (concessionary tax rate of 12 per cent); FSI-Headquarter Services (10 per cent); FSI-Fund Management (10 per cent); FSI-Capital Market (5 per cent), FSI- Credit Facilities Syndication (5 per cent); FSI-Derivative Market (5 per cent).

The FSI-Bond Market and FSI-Equity Market schemes will merge to form a new FSI-CM scheme from 1 January 2014. The five separate FSI-Derivatives Market schemes will also merge into a single FSI-DM scheme.

The list of qualifying activities covered by the FSI scheme will be expanded from 1 January 2014. For example, qualifying income under the FSI-ST will be expanded to include qualifying Islamic Finance Activities, amongst others.