(8/2008)

Ministerial Regulation No 265 under the Revenue Code has been issued on 29 January 2008 to amend the criteria and conditions for the investment in RMF for personal income tax purposes. The purpose of the amendment is to promote the investment in the Retirement Mutual Fund as an alternative for long-term savings of the public.

Previously, the RMF units could be redeemed after the five-year period holding without the loss of any tax benefit. It was not necessary for the investor to hold the units until he/she reaches the age of 55.

The Ministerial Regulation No 265 now requires the investor to hold the RMF units until he/she reaches the age of 55 and the units have been held for at least five calendar years before he/she redeems the units. If these conditions are met, the allowance given at the time of acquisition of the investment in the RMF units would be eligible and the gain from the redemption of the units would be exempt from tax.

However, in the case where the investor redeems the units after the five-year holding period, but he or she has not yet reached the age of 55, although the gain from the redemption of the units would be exempt from tax, the allowance given at the time of the investment in the units would not be eligible. Accordingly, the investor will have to adjust his/her personal income tax return(s) previously filed.

This amendment is effective for the investment in RMF units on or after 1 March 2008.