Singapore tax and FATCA updates

Transcription

1 Singapore tax and FATCA updates 21 March 2013 Page 1

2 Singapore tax and FATCA updates what do they mean to you? Budget 2013 updates Tax updates on the fund management industry FATCA what next? Page 2

3 Budget 2013 updates Presented by Amy Ang Partner, Financial Services and Corporate Tax 21 March 2013 Page 3

4 Wage Credit Scheme (WCS): Overview The Singapore Government will co-fund 40% of wage increases for Singaporean employees earning up to a gross monthly wage of S$4,000. Wage increases that are given in 2013 to 2015 will be eligible for the WCS Co-funding ceiling of S$4,000 (monthly salary) 200 Monthly salary increase Monthly co-funding by Government: Page 4

5 WCS: Qualifying employees Singapore citizen Earns a gross monthly wage of up to and including S$4,000 Minimum increment to be supported is S$50 Was employed for at least three months in preceding year with the same employer On employer s payroll for at least three months in qualifying year Qualifying monthly salary includes basic salary and additional wages like overtime pay and bonuses, and excludes employer CPF contributions Page 5

6 WCS: Qualifying criteria Employer must have paid the employee CPF contributions for at least three months in the qualifying year. Owners of companies or businesses do not qualify as employees even if they make CPF contributions All employers will be automatically covered Government-related entities and entities not registered in Singapore are excluded from receiving the Wage Credit Public companies limited by guarantee, societies and charities and institutions of a public character are eligible for WCS Page 6

7 WCS payout For wage increases given in 2013, eligible employers will receive the Wage Credit in Q Payment will be credited directly into the company s GIRO bank account for income tax or through cheque Wage Credit is taxable Wage Credit can be used to offset any outstanding tax arrears of the employer before the remaining amount, if any, is paid out Page 7

8 Corporate income tax rate Current Corporate income tax rate: 17% Partial tax exemption on first S$300,000 of chargeable income: 75% tax exemption for up to the first S$10,000 50% tax exemption for up to the next S$290,000 Proposed No reduction in corporate income tax rate Partial tax exemption remains as before Page 8

9 Corporate income tax rate: Comparison to Hong Kong Hong Kong s prevailing corporate tax rate: 16.5% How does this compare to Singapore: Chargeable income S$ Exempt income S$ a Income subject to tax S$ Income at 17% S$ 10,000 (7,500) 2, Effective tax rate S$ b 290,000 (145,000) 145,000 24, ,000 (152,500) 147,500 25, % 4,900,000-4,900, ,000 5,200,000 (152,500) 5,047, , % (a) 75% tax exemption for up to the first S$10,000 of chargeable income (b) 50% tax exemption of up to the next S$290,000 of chargeable income Page 9

10 Corporate income tax rate Points of view Effective tax rate can be further reduced by: Full and/or partial tax exemption Various tax incentive schemes such as: FSI-FM which accords concessionary tax rate of 10% Page 10

11 Corporate income tax rebate Current No corporate income tax (CIT) rebate for year of assessment (YA) 2012 Proposed CIT rebate for YA2013 to YA % of corporate income tax payable, capped at S$30,000 per YA Page 11

12 Corporate income tax rebate How does it affect you Chargeable income of S$740,736 and above to reap the full benefit of the CIT rebate Further reduction of effective tax rate Chargeable income Effective tax rate (after partial exemption) Effective tax rate (after partial exemption and CIT rebate) S$300, % 5.85% S$500, % 8.3% S$5,200, % 15.9% Page 12

13 Corporate income tax rebate Clarifications from the IRAS Given to all companies including Registered business trusts Companies that are not tax resident in Singapore; and Companies that receive income taxed at a concessionary tax rate No application required automatic processing by IRAS when assessing companies income tax returns Not applicable to income of a non-resident company that is subject to final withholding tax Computed on the tax payable amount after deducting tax set-offs (e.g., foreign tax credits) Page 13

14 Corporate income tax rebate For companies with concessionary and normal income: Illustrative example S$ Chargeable 10% concessionary tax rate 200,000 Tax payable on above chargeable income 20,000 Chargeable 17% (after exempt amount) 400,000 Tax payable on above chargeable income 68,000 Total tax payable 88,000 YA2013 CIT rebate (30% of tax payable, capped at S$30,000) 26, Net tax payable 61,600 Effective tax rate 10.3% Page 14

15 Tax exemption for new start-up companies Current Tax exemption on first S$300,000 of chargeable income: 100% tax exemption for up to the first S$100,000 50% tax exemption for up to the next S$200,000 Qualifying conditions include: Incorporated in Singapore (including a company limited by guarantee) A tax resident in Singapore for that YA; and Has no more than 20 shareholders throughout the basis period for that YA where: All of the shareholders are individuals beneficially and directly holding the shares in their own names; At least one shareholder is an individual beneficially and directly holding at least 10% of the issued ordinary shares of the company Page 15

16 Tax exemption for new start-up companies Proposed Tax exemption rates remain as before Qualifying conditions remain as before Certain companies incorporated after 26 February 2013 are excluded from the scheme: Property developer Investment holding company Property developers and investment holding companies can still enjoy the partial tax exemption Page 16

17 Productivity and Innovation Credit (PIC) Announced in the 2011 Budget Statement Available to all businesses from FY2010 to FY2014 Enhanced tax deductions or allowances for qualifying expenditure incurred in the following six activities: Registration of IP rights Acquisition of IP rights Design activities in Singapore Automation through technology or software Training of employees R&D* done in Singapore or abroad 400% for first $400,000 per activity per FY 150% (for R&D) or 100% (for the rest) for the balance expenditure * Need not be related to existing trade or business (for R&D done in Singapore) Page 17

18 PIC overview Combined expenditure cap of S$800,000 for each of the qualifying activities for FY2010 and FY2011 Combined expenditure cap of S$1,200,000 for each of the qualifying activities from FY2012 to FY2014 Claim must be net of grants and subsidies provided by the government or any statutory board Tax deferral option available Cash conversion option available Page 18

19 PIC cash conversion option: In summary Maximum qualifying expenditure eligible for conversion Minimum qualifying expenditure to be converted YA 2011 and YA20 12 S$100,000 YA 2013, YA2014 and YA2015 S$100,000 S$400 S$400 Conversion rate 30% 60% Maximum cash payout per YA S$30,000 S$60,000 Value of cash conversion in respect of qualifying deduction or allowance Ability to combine expenditure cap 7.5% 15% Yes No Page 19

20 PIC cash conversion option: Qualifying conditions One-time irrevocable option to convert deduction / allowance into cash in lieu of tax deduction if the following conditions are met: Incurred qualifying expenditure is entitled to the PIC scheme during the basis period for the qualifying YA; Active business operations in Singapore; and at least three local employees (Singapore citizens or permanent residents with CPF contributions excluding sole proprietors, partners under contract for service and shareholders who are directors of the company) Page 20

21 Enhancement to PIC PIC Bonus Expansion to the scope of PIC automation equipment IP licensing Enhancement to the PIC scheme to include IP in-licensing Enhancement to PIC automation Introduction of PIC Bonus Page 21

22 Automation through technology or software: Overview of existing rules Under the PIC A 400% capital allowance (CA) / deduction on the first S$400,000 of qualifying expenditure A 100% CA / deduction on the remaining qualifying expenditure Qualifying expenditure Expenditure incurred on the acquisition / lease of prescribed automation equipment Examples include: Computers, mobile phone and other personal digital assistant IT software including office system software and software used in connection with provision of any office automation service (e.g., ERP, CRM etc) Page 22

23 Expansion to the scope of PIC automation equipment Currently IRAS issues a prescribed list of automation equipment qualifying for PIC to provide tax certainty to businesses for their PIC claims. Automation equipment on the prescribed list automatically qualifies for PIC. Where the automation equipment is not on the prescribed list, taxpayers can apply, on a case-bycase basis, to the IRAS to seek approval to claim enhanced allowances / deductions under the PIC scheme. Page 23

24 PIC Bonus $ Businesses that invest a minimum of S$5,000 per YA in PIC qualifying expenditure will receive a dollar-for-dollar matching cash bonus PIC Bonus is paid over and above existing PIC benefits PIC The bonus will be up to S$15,000 over three YAs from YA2013 to YA2015 Page 24

25 PIC Bonus The PIC Bonus is applicable to sole-proprietorships, partnerships and companies that have: Incurred at least S$5,000 in PIC qualifying expenditure during the basis period for the YA in which a PIC Bonus is claimed; Active business operations in Singapore; and At least three local employees (Singapore citizens or permanent residents) with CPF contributions, excluding soleproprietors, partners under contract for service and shareholders who are directors of the company The PIC Bonus is not available to town councils, clubs and associations Businesses can claim the PIC Bonus together with their PIC cash payout applications or income tax returns Page 25

26 PIC Bonus Where the 400% tax deductions / allowances are claimed in the income tax return: Businesses can expect to receive the PIC Bonus within three months from the date of receipt of the income tax return by the IRAS IRAS will start disbursing the PIC Bonus from October 2013 Where the PIC cash payout is claimed: IRAS will generally approve the cash payout claim within three months from the date of receipt of the application PIC for these cases will be disbursed from July 2013 The PIC Bonus is taxable Page 26

27 Extending and enhancing the Financial Sector Incentive (FSI) scheme FSI ST 12% FSI FM FSI HQ 10% FSI BM FSI EM FSI CFS FSI DM FSI IF 5% Financial Derivatives OTC Commodity Derivatives Exchange Traded Commodity Derivatives OTC and Exchange Traded Commodity Financial, OTC and Exchange Traded Commodity Derivatives Expire on 31 December 2013 Page 27

28 Extending and enhancing the Financial Sector Incentive (FSI) scheme FSI ST 12% FSI FM FSI HQ 10% FSI BM FSI EM FSI CFS FSI DM FSI IF 5% FSI-CM FSI DM subsumed into FSI-ST Financial Derivatives OTC Commodity Derivatives Exchange Traded Commodity Derivatives OTC and Exchange Traded Commodity Financial, OTC and Exchange Traded Commodity Derivatives Expire on 31 December December 2018 Page 28

29 Extending and enhancing the Financial Sector Incentive (FSI) scheme FSI-ST FSI-CM FSI-CFS Range of incentivised activities and financial instruments will be broadened FSI-HQ Interest payments on qualifying loans Automatic withholding tax (WHT) exemption wef 25 February 2013 MAS will release details by end June 2013 Page 29

30 Extending and refining the QDS and QDS + incentive schemes Issuer QDS QDS + Holder Interest income Discount income Prepayment fee Redemption premium Break cost FSI-ST Companies or bodies of person resident in Singapore Resident individuals Nonresident 12% 10% 0% 0% 0% 0% 0% 0% Page 30

31 Extending and refining the QDS and QDS + incentive schemes QDS At primary launch: At least four investors; or < 50% held or funded by related parties Investors Bonds, notes, CPs, CDs Types of instrument Qualifying criteria Arranger Issue date on or before 31 December 2013 Substantially arranged by a Singapore FI; or Arranged by an FSI-BM company If at least 50% of QDS / QDS+ held by related parties, that portion of income does not qualify for concessionary tax treatment Page 31

32 Extending and refining the QDS and QDS + incentive schemes QDS+ -QDS that are Debt securities (excluding SGS) with an original maturity of at least ten years; or Islamic debt securities or sukuk Page 32

33 Extending and refining the QDS and QDS + incentive schemes Proposed QDS and QDS+ schemes extended from 31 December 2013 to 31 December 2018 Debt securities issued during 1 January 2014 to 31 December 2018 substantially arranged in Singapore rationalised Page 33

34 Extending and refining the QDS and QDS + incentive schemes Qualifying programme Programmewholly arranged by FSI-CM or FSI-ST New issuer: participation wholly arranged by FSI-CM or FSI-ST Debt securities issued 1 January 2014 to 31 December 2018 Substantially arranged in Singapore Not under a programme Non-qualifying programme > 50% of lead managers are FSI-CM or FST-ST Other proxies : > 50% of revenue from arranging, distributing, attributable to FSI-CM or FSI-ST > 50% issued in that tranche distributed by FSI-CM or FSI-ST Page 34

35 Extending and enhancing the Financial Sector Incentive (FSI) scheme QDS+ Standard early termination clauses do not affect status Early termination due to taxation, default, redemption or modification and amendment events If redeemed prematurely, QDS+ benefits revoked prospectively for outstanding debt securities Embedded options which can be exercised within ten years from debt of issuance QDS+ Effective from date of release of MAS circular before end of June 2013 Page 35

36 Expiry and withdrawal of certain tax schemes Further tax deduction scheme for expenses incurred on relocation or recruitment of overseas talent Expires on 30 September 2013 Tax incentive scheme for family-owned investment holding companies (FIHC) Aligns tax exemption of income received directly by individuals and that through a qualifying FIHC Expires on 31 March 2013 Page 36

37 Personal income tax rate No change to the current personal income tax rates A more progressive personal income tax schedule took effect from year of assessment (YA) 2012 Top marginal tax rate remains at 20% Page 37

38 Tax structure effective from YA2012 Chargeable income (S$) Tax rate (%) Tax payable (S$) On the first 20, On the next 10, On the first 30, On the next 10, On the first 40, On the next 40, ,800 On the first 80,000 3,350 On the next 40, ,600 On the first 120,000 7,950 On the next 40, ,000 On the first 160,000 13,950 On the next 40, ,800 On the first 200,000 20,750 On the next 120, ,600 Onthe first 320,000 42,350 In excess of 320, Page 38

39 Personal income tax rebate One-off personal income tax rebate to be granted to all resident taxpayers for YA 2013 Rebate Criteria 30% Aged less than 60 years old as at 31 December % Aged 60 and above as at 31 December 2012 Cap S$1,500 per taxpayer Page 39

40 Singapore vs Hong Kong (YA 2013) Comparative Analysis (2012/2013 Hong Kong vs Singapore YA2013 tax rates) Effective tax rate 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% S$520,000 Notes : 1. Assumes a married man 50 years of age and below, with two children. Wife has no income and sole source of income is from his employment 2. Hong Kong calculations are based on 2012/2013 tax rates, with 75% tax rebate capped at HK$10, Singapore calculations are based on YA 2013 tax rates, with 30% tax rebate capped at S$1, % S$82, % Income level (S$ '000) 4. Exchange rate used: S$1 : HK$ Singapore Hong Kong (2012/2013 tax rates) Page 40

41 Simplifying the taxation of accommodation benefits Proposed changes with effect from YA 2015 Taxable value of accommodation provided by employer to employee, including service apartment*: Current The lower of 10% of employment income or the annual value of premises, less rent paid by employee If furnished, taxable value of furniture and fittings is based on a prescribed list Proposed Annual value of premises, less rent paid by employee If furnished, taxable value is based on a percentage of annual value * Not located within a hotel building Page 41

42 Illustration: proposed changes to taxable benefit of accommodation Salary Bonus Furniture& fittings Housing benefit Current tax treatment on housing accommodation (S$) 180,000 30,000 1,200 21,120 Proposedchanges to taxable benefit on housing accommodation (S$) 180,000 30,000 3,250 65,000 Assessable income 232, ,250 Less: personal reliefs Earned income Spouse Children (1,000) (2,000) (8,000) (1,000) (2,000) (8,000) Chargeable income 221,320 Tax 24,588 Difference in tax to be paid 267,250 32,855 8,267 Page 42

43 Illustration: proposed changes to taxable benefit of accommodation Assumptions: 1. Taxpayer is married with two dependent children. Wife has no income. 2. Salary is S$15,000 per month. Bonus is equivalent to two months salary. 3. House rental is S$8,000 per month. Annual value of property is S$65, Taxable benefit of furniture and fittings amount to S$1,200 per annum under current treatment. For the taxable value under the proposed treatment, we have assumed the furniture and fittings based on 5% of the annual value of the housing. 5. No other reliefs/deductions apply. 6. Based on current individual tax rates without tax rebate. Page 43

44 Simplifying the taxation of accommodation benefits Taxable value of hotel accommodation provided by employer to employee, including service apartment located within a hotel building: Current S$250 per month each for self and spouse, including varying rates for children + 2% of base salary relating to the period of hotel stay Proposed Actual cost of the hotel stay incurred Further details to be released by IRAS by October 2013 Page 44

45 Impact Higher tax costs Employers who bear the tax liabilities of employees Employees who bear their own taxes Page 45

46 Employee equity-based remuneration schemes Tax incentive schemes Tax deferral scheme Tax exemption schemes for employees Equity Remuneration Incentive Scheme (ERIS) Qualified Employee Equity-Based Remuneration scheme (QEEBR) ERIS (Start-ups) ERIS (SMEs) ERIS (All Corporations) Page 46

47 ERIS: Brief background ERIS (Start-ups) Employees of qualifying start-up companies enjoy tax exemption on 75% of taxable stock gains, up to S$10m over 10 years Effective 16 February 2008 for five years Subject to qualifying conditions ERIS (SMEs) Employees of qualifying SMEs enjoy tax exemption on 50% of taxable stock gains, up to S$10m over 10 years First introduced on 1 June 2000 Subject to qualifying conditions ERIS (All Corporations) Employees of qualifying companies enjoy tax exemption on the first S$2,000 of taxable stock gains plus 25% of the remaining gains, up to S$1m over 10 years First introduced on 1 April 2001 Subject to qualifying conditions Page 47

48 ERIS: Proposed changes ERIS (Start-ups) Expired on 15 February 2013 will not be renewed Employee stock plansthat previously qualified under this scheme will continue to enjoy tax exemption on gains derived on / before 31 December 2023 ERIS (SMEs) and ERIS (All Corporations) No prior expiry date Will now expire on 1 January 2014 Employee stock plans that qualify under this scheme on / before 31 December 2013 will continue to enjoy tax exemption on gains derived on / before 31 December 2023 Page 48

49 Employee equity-based remuneration schemes Qualified (EEBR) Sole scheme remaining Tax deferral scheme, i.e., not an exemption scheme Application by the taxpayer to IRAS to defer payment on tax on share gains up to five years Deferral is subject to interest charge at prime rate Page 49

50 Property tax changes Current Property tax rate is 10% on Annual Value As a concession, lower rates apply for owner-occupied residential properties Annual value (AV) Property tax rates First S$6,000 0% Next S$59,000 4% AV above S$65,000 6% Page 50

51 Property tax changes Proposed rates for owner-occupied residential properties: Annual value (AV) Rates from 1 January 2014 Rates from 1 January 2015 First S$8,000 0% 0% Next S$47,000 4% 4% Next S$5,000 5% 6% Next S$10,000 6% 6% Next S$15,000 7% 8% Next S$15,000 9% 10% Next S$15,000 11% 12% Next S$15,000 13% 14% AV above S$130,000 15% 16% Page 51

52 Property tax changes Proposed rates for non-owner-occupied residential properties: Annual value (AV) Rates from 1 January 2014 Property tax rate for land and non-residential properties remains at 10% More details to be released by June 2013 Rates from 1 January 2015 First S$30,000 10% 10% Next S$15,000 11% 12% Next S$15,000 13% 14% Next S$15,000 15% 16% Next S$15,000 17% 18% AV above S$90,000 19% 20% Page 52

53 Property tax changes Current Refund concessions available for certain vacant properties Residential properties undergoing demolition and reconstruction Rate of 10% applies Can apply to be taxed at owner-occupied rates Vacant land undergoing new development Rate of 10% applies during period of development Page 53

54 Property tax changes Proposed With effect from 1 January 2014 Refund concessions on vacant properties will be removed Vacant properties despite reasonable efforts to find a tenant Residential properties undergoing repairs or building works for owner-occupation* Vacant land undergoing residential development* * For properties intended for owner-occupation, owner may apply to IRAS for owner-occupied residential property tax rates Rates to apply up to two years Property must be owner-occupied for at least one year Page 54

55 Property tax changes No change to: Property tax on residential property undergoing demolition and reconstruction Vacant land undergoing new development Further details to be released by IRAS by June 2013 Page 55

56 Foreign worker policies Work pass eligibility criteria Tightening of S Pass qualification criteria Increase of minimum qualifying monthly salary from S$2,000 to S$2,200 from 1 July 2013 Tiered salary system based on age and qualifications Eligibility requirements for Employment Pass (EP) will be further tightened Page 56

57 Foreign worker policies New EP framework to ensure firms give fair consideration to Singaporeans in their hiring practice Ministry of Manpower will release more details and will consult Page 57

58 Recent Singapore tax treaties Addition of Exchange of information Article Signed but not in force In force Portugal (Protocol) Turkey (Protocol) Bermuda (tax information exchange agreement) Bahrain (Protocol) Canada (Protocol) Estonia (Protocol) Page 58

59 Recent Singapore tax treaties Comprehensive tax treaties Signed but not in force In force Guernsey Isle of Man Jersey Poland (enhanced agreement) Italy (Additional Protocol) Switzerland (revised) United Kingdom (Second Protocol) Vietnam (Second Protocol) Page 59

60 Recent Singapore tax treaties Highlights 1.DTAs with low tax jurisdictions (Guernsey, Isle of Man and Jersey) Dividends not subject to withholding tax (WHT) Interest 12% Royalties 8% 2. Includes internationally agreed Standard for Exchange of Information (39 to date) 3. Trustee deemed to be beneficial owner of the income for the purposes of the Articles on dividend, interest and royalties ( Guernsey, Poland and UK) Page 60

61 Recent Singapore tax treaties Highlights 4. Article on Dividends includes REIT distributions which is subject to 15% WHT (UK) 5. Cessation of tax sparing provision (Italy) 6. Increase in threshold period for permanent establishment (PE) (Italy, Poland and Switzerland) 7. 5 years sunset clause for service PE (UK) 8. Most favoured nation clause for interest WHT (Vietnam) 9. Remittance clause not applicable to income exempted from Singapore tax (Poland and Switzerland) Page 61

62 Where is Singapore heading in terms of tax compliance? Adoption of risk-based compliance approach to assess taxpayers Steps taken by IRAS to-date Voluntary Disclosure Program (VDP) Enhanced Taxpayer Relationship Program GST Assisted Compliance Assurance Program (ACAP) in April 2011 Corporate Income Tax Objection and Appeal Process (with effect from 1 January 2014) Next? Co-creating a Tax Risk Management (TRM) framework for Singapore TRM to be the proposed basis of IRAS compliance program Page 62

63 Common issues in tax compliance Classification of income and expenses For tax incentive companies Normal vs concessionary income Allocation keys for expenses Information flow is ineffective within entity/across entities Lack of controls to manage errors and protect data integrity Lack of records to substantiate transactions Manual data extraction resulting in inefficiencies and wrong classification Lack of tax trained personnel to perform pre-submission review Failure to comply with withholding tax Page 63

64 Compliance focus by IRAS Past and ongoing Timely filing of corporate tax returns Accurate filing of income and expenses, especially by family owned and managed companies Abuse of tax exemption scheme for new companies Claims of capital allowance and industrial building allowance Up and coming Classification of income and expenses by companies enjoying tax incentives Related-party transactions and allocation of development cost by real estate developers Income declaration by companies whose principal activities are that of tutoring services or tuition agencies Page 64

65 Updates to the fund Industry Presented by Desmond Teo Partner, Financial Services and International Tax 21 March 2013 Page 65

66 Singapore asset management industry Confirming our suspicion over the past 10 years Page 66

67 Designated investments and specified income The list of designated investments was simplified and some changes of particular interest: All stocks and shares of any company, other than an unlisted company that is in the business of trading or holding of Singapore immovable properties (other than the business of property development) are covered Non-qualifying debt securities and other securities issued by private companies that are in the business of trading or holding of Singapore REITs are considered securities and covered even if they have Singapore real estate Page 67

68 Designated investments and specified income The list of specified income will be enhanced and revised as an exclusion list. Some key income/gains impacted: Unless excluded, all income and gains derived on or after 17 February 2012 from designated investments will be considered as specified income Disposal gains from any REITS Interest and other payments that fall within the ambit of Section 12(6) of the Income Tax Act (ITA), unless excluded Distributions made by a trustee of a SGX-listed REIT Page 68

69 Other changes impacting prescribed funds Prescribed Fund must meet the prescribed conditions for Section 13R/X Must be 100% at all times during the basis period where Exempt SPV enjoys tax exemption Investors Prescribed Fund Exempt SPV Prescribed Fund that enjoy the Singapore tax exemption Key changes/clarifications Conditions to be met at all times during the basis period for the year of assessment SPVs (Exempt SPV) that enjoy the Singapore tax exemption which are wholly-owned by the Prescribed Fund Key changes/clarifications 100% ownership must be at all times during the basis period where the Exempt SPV enjoys tax exemption Prescribed Fund must meet the prescribed conditions for Section 13R/X Page 69

70 GST remission for prescribed funds GST remission for prescribed funds managed by fund managers in Singapore Fixed recovery rate for 1 January 2013 to 31 December 2013 will be 87% Operating costs for the fund are marginally increasing 100% $10,000 95% 90% $8,000 $6,000 85% 80% 75% $4,000 $2,000 70% Fixed Recovery Rate 93% 92% 91% 90% 87% GST leakage / $1 mil expenses $4,900 $5,600 $6,300 $7,000 $9,100 $0 Page 70

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