It is likely that the enhancement of Singapore's Maritime Sector Incentive (MSI) will benefit offshore sectors and container liners, said Lim Peng Huat, director of Singapore-based integrated business solution provider Complete Corporate Service.

Lim explained in the recent Moore Stephens Singapore Budget 2015 seminar that proposed changes in the tax incentives have provided clarity and certainty on tax treatment.

"MSI has removed all uncertainty and from now onwards, all mobilisation and demobilisation fees, notwithstanding pre-commencement and post-commencement of rigs, will be covered by the tax exemption," he said.

Lim welcomed the tax exemption, which has a particular relevance to the growing offshore sector in Singapore. In addition, the proposed changes in the MSI-Shipping Enterprise (Singapore Registry of Ships) and MSI-Approved International Shipping (MIS-AIS) Enterprise Award will cover holding fees, including incidental container rental income as tax-exempt income.

Lim also noted that approved foreign branches of MSI-AIS entities can now remit their qualifying profits and enjoy tax exemption without having to meet the "headline tax rate" and "subject to tax" conditions under section 13(8) of Singapore's Income Tax Act. Meanwhile, existing MSI-Shipping-related Support Services award recipients can now renew their award tenures for another five years, subject to qualifying conditions and higher economic commitments.

Previously, the MSI's enhancement and extension was announced by the country's deputy prime minister and finance minister, Tharman Shanmugaratnam, on Feb. 23. Its aims are to develop Singapore as an International Maritime Centre and strengthen the maritime sector's competitiveness. The country's Maritime Port Authority will unveil details of all the MSI enhancements by May 31, 2015.