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Tax for VCCs

How are taxes computed for an umbrella VCC?


  • The chargeable income or exempt income of an umbrella VCC is the sum of the chargeable income or exempt income of its sub-funds. The income of a sub-fund is determined as if it were a VCC.

    In line with the requirement under the VCC Act for the segregation of assets and liabilities of sub-funds, any expense, capital expenditure, loss or donation of a sub-fund will not be available for deduction against the income of another sub-fund or any other income of the umbrella VCC. This effectively quarantines any such amount and prevents such amounts from being utilised against the income of another sub-fund or the umbrella VCC. The availability of such amounts for offset against future income is subject to a shareholding test.

    There is no group relief system for umbrella VCCs.

    Certain common tax rules are applied separately at the umbrella and sub-fund levels:

    • Unabsorbed capital allowances, losses and donations — sub-fund level
    • Shareholding test — sub-fund level
    • Partial tax exemption, start-up tax exemption and corporate tax rebate — VCC level
    • Exemption of gains or profits from disposal of ordinary shares — sub-fund level
    • Modification of provisions for VCCs redomiciled in Singapore — sub-fund level
    • Tax credits — sub-fund level