Clause 11

For the purposes of this Act, and subject to the modifications in this section and the rules under subsection (30), a reference to a company in this Act and the subsidiary legislation made under it includes a VCC.(2) Accordingly, a reference to a body of persons (by reason of it being defined in section 2(1) as excluding a company) excludes a VCC.Chargeable or exempt income of umbrella VCC(3) Subject to the modifications in this section and the rules under subsection (30), a reference in this Act and the subsidiary legislation made under it to the chargeable income or exempt income of a person that is an umbrella VCC is to the total of the chargeable income or exempt income (as the case may be) of each of its sub‑funds.(4) For the purpose of determining the chargeable income or exempt income of a sub‑fund under subsection (3), the provisions of this Act and the subsidiary legislation made under it (as modified by subsection (1)) apply as if each sub‑fund were a VCC, with the following modifications:

a reference to a trade or business carried on by a VCC is to a trade or business carried on by the umbrella VCC in relation to the sub‑fund;

a reference to income derived or received by a VCC is to income derived or received by the umbrella VCC in relation to the sub‑fund (called in this section income of a sub‑fund);

a reference to any outgoing or expense incurred by a VCC in producing income is to either or both of the following (called in this section an expense of a sub‑fund):

any outgoing or expense incurred in producing income of the sub‑fund;

the amount of any outgoing or expense allocated to the sub‑fund by the umbrella VCC in accordance with section 29(3) of the VCC Act;

a reference to any capital expenditure incurred by a VCC for the purpose of a trade or business is to either or both of the following (called in this section a capital expenditure of a sub‑fund):

any capital expenditure incurred for the purpose of a trade or business carried on by the umbrella VCC in relation to the sub‑fund;

the amount of any capital expenditure allocated to the sub‑fund by the umbrella VCC in accordance with section 29(3) of the VCC Act;

a reference to any loss incurred by a VCC in carrying on a trade or business is to any loss incurred by the umbrella VCC in carrying on a trade or business in relation to the sub‑fund (called in this section a loss of a sub‑fund);

a reference to a donation made by a VCC is to a donation made by the umbrella VCC for the purpose of the sub‑fund (called in this section a donation of a sub‑fund);

a reference to a payment or distribution made to a VCC is to a payment or distribution made to the umbrella VCC for the sub‑fund;

a reference in sections 23, 37 and 37E to shareholders of a VCC is to holders of shares of the umbrella VCC in respect of the sub‑fund;

a sub-fund is resident in Singapore if its umbrella VCC is resident in Singapore, and a sub‑fund is resident outside Singapore if its umbrella VCC is resident outside Singapore.(5) Subsection (4) does not apply to any provision of this Act that is replaced with another provision under this section for the purpose of subsection (3).(6) To avoid doubt —

the umbrella VCC is not entitled to any further deduction for any expense, capital expenditure, loss or donation of a sub‑fund taken into account in determining the chargeable income or exempt income of the sub‑fund; and

any expense, capital expenditure, loss or donation of a sub‑fund is not available for deduction against the income of another sub‑fund or any other income of the umbrella VCC.(7) Each part of the chargeable income of an umbrella VCC that is chargeable income of a sub‑fund is subject to tax at the rate to which that part would have been subject had the sub‑fund been a VCC.Segregated liabilities of sub-funds(8) The amount of any tax attributable to any part of the chargeable income of an umbrella VCC that is chargeable income of a sub‑fund, together with any interest or penalty imposed under section 85(2) or 87 in respect of such amount, is considered (for the purpose of section 29 of the VCC Act) liability incurred by the umbrella VCC for the purpose of the sub‑fund.(9) Any fine or penalty imposed on, or composition sum that may be paid by, an umbrella VCC for an offence under this Act that is committed in respect of any information or other matter concerning a sub‑fund, is considered (for the purpose of section 29 of the VCC Act) liability incurred by the umbrella VCC for the purpose of the sub‑fund.(10) Any fine or penalty imposed on, or composition sum that may be paid by, an umbrella VCC for an offence under this Act and to which subsection (9) does not apply, is considered (for the purpose of section 29 of the VCC Act) liability incurred by the umbrella VCC for the purpose of all of its sub‑funds.Deductions not allowed(11) A VCC may not be allowed any deduction under sections 14A, 14B, 14D, 14DA, 14E, 14F, 14H, 14I, 14K, 14KA, 14N, 14O, 14P, 14PA, 14Q, 14V, 14WA, 14ZB and 37L (including the subsidiary legislation made under them, where applicable) and accordingly may not be approved (where applicable) under them.(12) Despite subsection (1), no transfer of any deduction may be made under section 37C —

by a VCC to any claimant company or VCC of the same group; or

by a transferor company to any VCC of the same group.Application of sections 13R and 13X(13) Section 13R and the regulations made under it apply for the purpose of determining the exempt income of a sub‑fund under subsection (3) as if it were an approved company under that section if the umbrella VCC of the sub‑fund is approved for the purpose of that section.(14) Where the relevant owner mentioned in section 13R(3) is an umbrella VCC, the amount of any financial penalty under that provision that it is liable for is considered (for the purpose of section 29 of the VCC Act) liability incurred by it for the purpose of its sub‑funds, and the amount of such liability in relation to each sub‑fund is to be computed in accordance with the formulawhere —

A is the total value of issued securities held by the umbrella VCC for the sub‑fund on the relevant day as defined in section 13R(8);

B is the total value of all the issued securities held by the umbrella VCC for all its sub‑funds on the relevant day as defined in section 13R(8); and

C is the amount of the penalty.(15) Section 13X and the regulations made under it apply for the purpose of determining the exempt income of a sub‑fund under subsection (3) as if it were —

an approved person under that section;

the approved master fund of an approved master fund‑SPV structure, master‑feeder fund‑SPV structure or master‑feeder fund structure under that section; or

an approved feeder fund of an approved master‑feeder fund‑SPV structure or master‑feeder fund structure under that section,if its umbrella VCC is approved by the Minister or a person appointed by the Minister for the purpose of that section.(16) The amount of any tax recoverable from the umbrella VCC under the regulations made under section 13X that is attributable to any income of a sub‑fund, is considered (for the purpose of section 29 of the VCC Act) liability incurred by the umbrella VCC for the purpose of the sub‑fund.Application of section 13Z(17) Section 13Z in Part 1 of the Third Schedule applies in place of section 13Z for the purpose of determining the exempt income of a sub‑fund under subsection (3) from the disposal of —

ordinary shares in a company (other than a VCC); or

ordinary shares in a VCC (called in this subsection and subsection (18) VCC X).(18) Where VCC X is an umbrella VCC, section 13Z in Part 1 of the Third Schedule applies for the purpose of determining the exempt income of a sub‑fund under subsection (3) with the following further modifications:

the section is to be applied in relation to the disposal of ordinary shares of VCC X in respect of each sub‑fund as if VCC X only has that one sub‑fund;

accordingly, a reference in the section to the legal and beneficial ownership of any ordinary shares in a VCC is to the legal and beneficial ownership of ordinary shares in VCC X in respect of that sub‑fund.(19) Section 13Z applies for the purpose of determining the exempt income of a company (including a non‑umbrella VCC but excluding an umbrella VCC) from the disposal of ordinary shares in an umbrella VCC with the following modifications:

the section is to be applied in relation to the disposal of ordinary shares of the umbrella VCC in respect of each sub‑fund as if the umbrella VCC only has that one sub‑fund;

accordingly, a reference in that section to the legal and beneficial ownership of any ordinary shares in a VCC is to the legal and beneficial ownership of ordinary shares in the umbrella VCC in respect of that sub‑fund.(20) In subsections (17), (18) and (19), “ordinary share”, in relation to a VCC, means any share other than a share that carries only a right to any dividend which is —

of a fixed amount or at a fixed rate per cent of the value of the share; or

either —

where the VCC is a non‑umbrella VCC, of a fixed rate per cent of the profits of the non‑umbrella VCC; or

where the VCC is an umbrella VCC, of a fixed rate per cent of the profits of the umbrella VCC in relation to the sub‑fund in respect of which the share was issued.Application of sections 34D, 34E and 34F(21) Section 34D applies for the purpose of determining the chargeable income or exempt income of a sub‑fund under subsection (3), and section 34E applies for the recovery of any surcharge resulting from any adjustment by the Comptroller under section 34D as applied by this subsection, subject to the following modifications:

a sub-fund is treated as a person;

a person is related to a sub‑fund if it is related to the sub‑fund in such manner as may be prescribed by rules under section 7.(22) Any surcharge under section 34E as applied by subsection (21) is recoverable from the umbrella VCC and constitutes a liability incurred by the umbrella VCC for the purpose of the sub‑fund concerned for the purpose of section 29 of the VCC Act.(23) Section 34F applies to an umbrella VCC —

as if a reference to the gross revenue of a company is to the gross revenue of any of its sub‑funds; and

as if a reference to a transaction undertaken by a company with a related party is to a transaction undertaken by the umbrella VCC for the purpose of any of its sub‑funds with any person that is related to the sub‑fund in such manner as may be prescribed by rules under section 7.Application of sections 34G and 34H(24) Sections 34G and 34H apply to a body corporate incorporated outside Singapore that is a non‑umbrella VCC registered as a VCC under Part 12 of the VCC Act, as they apply to a redomiciled company as defined in section 34G, subject to the following modifications:

a reference to the registration date of a redomiciled company or an approved redomiciled company is to the date of registration of the VCC specified in the notice of transfer of registration issued to it under section 135(3) of the VCC Act;

a reference to the place of incorporation of an approved redomiciled company is to the jurisdiction where the VCC was domiciled at the time it applied for registration under Part 12 of the VCC Act;

section 34G(9) does not apply except in respect of section 14U;

section 34G(20A), (20B) and (20C) does not apply.(25) Section 34G in Part 2 of the Third Schedule applies in place of section 34G for the purpose of determining under subsection (3) the chargeable income or exempt income of a sub‑fund of a body corporate incorporated outside Singapore that is registered as a VCC under Part 12 of the VCC Act and that is an umbrella VCC (called in this section a redomiciled umbrella VCC).(26) Section 34H in Part 2 of the Third Schedule applies in place of section 34H for the purpose of determining the tax credits for a redomiciled umbrella VCC.Application of sections 45, 45A, 45AA, 45B, 45D and 45F(27) Where —

section 45, 45A, 45AA, 45D or 45F applies to any payment by an umbrella VCC for the purpose of a sub‑fund; or

section 45B applies to any remuneration payable by an umbrella VCC to a director of the VCC that is allocated by the VCC to a sub‑fund,any resulting debt mentioned in that section (including, where applicable, section 45 as applied by that section), together with any penalty or fine imposed on the VCC, or composition sum that may be paid by the VCC, for an offence under that section (including, where applicable, section 45 as applied by that section), that is committed in relation to such income is considered (for the purpose of section 29 of the VCC Act) liability incurred by the VCC for the purpose of the sub‑fund.Application of sections 50, 50A and 50C(28) Sections 50, 50A and 50C in Part 3 of the Third Schedule apply in place of sections 50, 50A and 50C respectively, in a case where the income in question is that of an umbrella VCC.Miscellaneous(29) Rules made for the purposes mentioned in subsections (21)(b) and (23)(b) may make different provisions for different circumstances.(30) The Minister may, for a period of 2 years starting on the date of commencement of the Variable Capital Companies (Miscellaneous Amendments) Act 2019, make rules to prescribe further modifications to any provision of this Act in its application to a VCC, an umbrella VCC or a sub‑fund of an umbrella VCC.”.