Tax on Transactions Handbook 2011/12
Country Q&A
Singapore
Kay Kheng Tan
WongPartnership LLP
TAX AUTHORITIES
1. What are the main authorities responsible for enforcing taxes
on corporate transactions in your jurisdiction?
The Inland Revenue Authority of Singapore (IRAS) is the authority
responsible for enforcing taxes on corporate transactions including:
Income tax.
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Property tax.
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Goods and services tax (GST).
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Stamp duty.
The IRAS is headed by the Commissioner of Inland Revenue, who
is concurrently the Comptroller of Income Tax, the Comptroller of
Property Tax, the Comptroller of GST and the Commissioner of
Stamp Duties under the relevant tax statutes.
2. Is it possible to apply for tax clearances or obtain guidance
from the tax authorities before completing a corporate transaction? If yes, provide brief details, including whether clearance or guidance is binding.
It is possible to apply for tax clearances before completing a corporate transaction.
For income tax, taxpayers can request (in writing) an advance
ruling on how the provisions of the Income Tax Act (Cap. 134,
2008 Revised Edition) (ITA) would apply to a proposed transaction. This advance ruling process is given statutory effect (section
108, ITA). A ruling binds the Comptroller of Income Tax to apply
the statutory provision(s) in the manner set out in the ruling.
An advance ruling, whether or not favourable to the applicant, is
final, that is, there is no appeal process at this stage. However,
the applicant does not have to follow the ruling if he disagrees
with it. However, in submitting his tax return (if it includes an
issue that has been the subject of a ruling), the applicant must
indicate that an advance ruling has previously been obtained and
whether or not his submission accords with the ruling.
Where the Comptroller of Income Tax, based on the ruling,
assesses that income tax should be paid and the applicant disagrees with this, the applicant can appeal the assessment under
the normal appeal process in the ITA.
Taxpayers can also request in writing that the IRAS provide an
advance ruling on issues related to GST. This advance ruling
process is given statutory effect (section 90A, Goods and Services Tax Act (Cap. 117A, 2005 Revised Edition) (GST Act)). In
the same way as for advance rulings for income tax, the ruling
binds the Comptroller of GST to apply the statutory provision(s)
in the manner set out in the ruling.
If the applicant decides not to comply with the Comptroller’s ruling when submitting his GST return (if it includes the transaction
that has been the subject of the ruling), he must declare in writing to the Comptroller that he has not complied with it.
Where the applicant has not complied with the ruling in completing his return and there is no material change in the facts and
circumstances of his arrangements, the Comptroller of GST can
decide that GST is payable. The applicant can appeal the assessment under the normal appeal process in the GST Act.
There is no formal system for rulings in relation to stamp duty
under the Stamp Duties Act (Cap. 312, 2006 Revised Edition),
but documents in certain transactions may need to be assessed
by the Commissioner of Stamp Duties in a process known as adjudication. In addition, in practice, taxpayers often request a ruling or adjudication on a proposed transaction, particularly if the
potential exposure to duty is significant.
There are provisions for stamp duty relief in relation to specific
transactions, such as the transfer of assets between associated
entities including companies, or the reconstruction or amalgamation of companies (“associated” and “entity” are defined in the
Stamp Duties Act and relevant subsidiary legislation in relation to
stamp duty). When applying for relief, the taxpayer must satisfy
the Commissioner of Stamp Duties that the relevant prescribed
conditions have been fulfilled.
MAIN TAXES ON CORPORATE TRANSACTIONS
3. What are the main transfer taxes and/or notaries’ fees potentially payable on corporate transactions? In relation to each
tax/fee identified, explain briefly:
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Its key characteristics.
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What triggers it.
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Who is liable.
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The applicable rate(s).
Transfer taxes: stamp duty
Stamp duty is levied on certain commercial and legal documents
as prescribed in the Stamp Duties Act. These include:
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Documents relating to the transfer, conveyance and assignment of shares and immovable property.
Leases of immovable property.
© This article was first published in the PLCCross-border Tax on Transactions Handbook 2011/12
and is reproduced with the permission of the publisher, Practical Law Company.
Corporate Q&A
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Tax on Transactions Handbook 2011/12
Country Q&A
The chargeable instrument must be stamped within 14 days of
its execution in Singapore. Any chargeable instrument executed
outside Singapore must be stamped within 30 days of its first
receipt in Singapore.
Corporate Q&A
The person liable to pay stamp duty is set out in the Third Schedule to the Stamp Duties Act (Third Schedule), unless there is an
agreement to the contrary that some other party is liable. The
Third Schedule provides that (among other things), on the transfer of shares and immovable property, it is the transferee who is
liable to pay stamp duty.
With effect from 14 January 2011 and depending on the date of
acquisition, disposal of residential immovable property within one to
four years of the date of acquisition also attracts an additional duty
that is borne by the seller. This is referred to as the seller’s stamp
duty. The amount of a seller’s stamp duty payable (based on a rate of
16%, 12%, 8% or 4%) depends on the length of the holding period
of the property. Generally, the longer the holding period, the smaller
the amount of the duty payable, as a lower rate applies. Seller’s stamp
duty was first imposed with effect from 20 February 2010, modified
on 30 August 2010 and then modified again on 13 January 2011
(with the latest changes taking effect from 14 January 2011).
For the buyer, stamp duty is chargeable at a fixed rate or ad
valorem basis, depending on the type of instrument executed. In
particular, for the transfer of immovable property, stamp duty is
payable at the rate of:
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S$1 for every S$100 or part of this, on the first S$180,000.
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S$2 for every S$100 or part of this, on the next S$180,000.
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S$3 for every S$100 or part of this, in relation to the remainder.
As at 1 March 2011, US$1 was about S$1.3.
Where there is a transfer of shares, stamp duty is payable on the
instrument of transfer at the rate of S$0.2 for every S$100 or
part of this, on the consideration or net asset value of the shares
(whichever is higher).
Notaries’ fees
Notaries’ fees are incurred when there is a need to authenticate
and certify the execution of documents required or intended for use
outside Singapore. Notaries’ fees vary depending on the certifying
notary public or authority. These fees are not generally substantial.
4. What are the main corporate and/or capital gains taxes potentially payable on corporate transactions? In relation to each
tax identified, explain briefly:
„„
Its key characteristics.
„„
What triggers it.
„„
Who is liable.
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The applicable rate(s).
While Singapore does not have a capital gains tax, there are income tax implications if the gains derived from a corporate transaction are revenue in nature (that is, where a seller of shares
derives gains from the sale as part of a trade or business involving
the buying and selling shares). If subject to tax, the current corporate tax rate of 17% applies.
5. What are the main value added and/or sales taxes potentially
payable on corporate transactions? In relation to each tax
identified, explain briefly:
„„
Its key characteristics.
„„
What triggers it.
„„
Who is liable.
„„
The applicable rate(s).
GST
GST is charged on taxable supplies of goods and services made by a
taxable person in the course or furtherance of any business carried
on by that person. This includes the import of goods into Singapore.
A taxable supply is a supply of goods or services made in Singapore
other than an exempt supply. A taxable person is a person who is,
or is required to be, registered under the GST Act. Registration is
required when a person provides (or intends to provide) more than
S$1 million worth of annual taxable supplies in Singapore.
The standard rate of GST is 7%. Exports and the supply of international services (as defined in the GST Act) can be zero-rated.
A GST-registered person must provide a GST return to the Comptroller of GST on a quarterly basis (unless otherwise determined
by the Comptroller of GST). This person must pay the Comptroller
of GST the amount of GST due for the accounting period to which
the return relates (that is, the difference between output tax and
input tax for the period).
When a taxable person transfers or disposes of the assets of his
business, whether for consideration or not, he must collect GST
on the transfer or disposal from the buyer. However, if certain
conditions are met, the transfer of assets can be considered an
excluded transaction and so not subject to GST. These conditions are:
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Income tax
A company pays income tax on the profits arising from its business or
trade and on other income (such as rental or interest income) accruing
in, or derived from, Singapore, or received in Singapore. This income
is taxed under the Income Tax Act at the corporate tax rate of 17%.
For more information
For Year of Assessment 2011, companies may enjoy either a 20%
corporate income tax rebate which is calculated on the taxable
amount (after deducting any tax set-offs such as double tax relief,
unilateral tax credits and tax deducted at source), subject to a cap
of S$10,000, or a one-off small or medium-sized enterprise (SME)
cash grant of 5% on total revenue subject to a cap of S$5,000.
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The supply of assets is made in connection with the transfer
of a business. It must not be a mere transfer of assets. The
transfer of assets must have the effect of putting the transferee in possession of a business.
The transferred assets must be used to carry on the same
kind of business as that of the transferor.
If only a part of the business is transferred, that part of the
business must be able to operate on its own.
After the transfer is completed, there must be continuity of
the business. There should not be immediate termination
of the business, other than temporary closures to allow the
business to be operationally ready.
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„„
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The transferee must be GST registered at the time of transfer.
Proper records must be kept on each transferred asset by
both the transferor and transferee. Parties must be able to
reconcile the difference in the value of assets before and
immediately after the transfer with the value of the transferred assets.
SHARE ACQUISITIONS AND DISPOSALS
9. What taxes are potentially payable on a share acquisition/
share disposal?
Stamp duty
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Its key characteristics.
Stamp duty is payable on the execution of the share transfer instrument. The rate of duty is S$0.2 for every S$100 (or part of
this amount) of the consideration or net asset value of the shares
(whichever is higher) (see Question 3).
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What triggers it.
Income tax
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Who is liable.
Income tax is payable if gains are made from the share disposal and
the transferor is carrying on a trade or business (see Question 4).
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The applicable rate(s).
6. Are any other taxes potentially payable on corporate transactions? In relation to each tax identified, explain briefly:
GST
No GST is chargeable on a sale of shares.
7. In what circumstances will the taxes identified in Questions
3 to 6 be applicable to foreign companies (in other words,
what “presence” is required to give rise to tax liability)?
Income tax
A foreign company is liable to income tax if it carries on a trade
or business in Singapore, even if this trade or business is only
partly carried on in Singapore. Gains or profits that are not directly attributable to that part of the trade or business carried on
outside Singapore are subject to Singapore income tax. A foreign
company is also liable to income tax on gains or profits made by
a Singapore branch of the company.
Stamp duty
A foreign company is liable to stamp duty if the executed instrument concerned is chargeable to stamp duty in Singapore and the
foreign company is the party liable for the duty under the Third
Schedule of the Stamp Duties Act (see Question 3).
GST
A foreign company must collect GST if it is a taxable person (see
Question 5) who supplies taxable goods and services in Singapore. A foreign company must appoint a Singapore agent who
acts on its behalf for all GST matters. This agent is responsible
for the accounting and payment of GST to the Comptroller of GST.
DIVIDENDS
10.Are any exemptions or reliefs available to the liable party? If
yes, provide brief details.
There are two main types of relief from stamp duty that may apply
to a share acquisition or disposal.
Reconstruction or amalgamation of companies
Where the share acquisition or disposal is made under a scheme for
the reconstruction of any company or companies, or amalgamation of
companies, stamp duty relief may be available if certain conditions
are satisfied. A reconstruction involves the transfer of an undertaking
or part of an undertaking of an existing company to a new company,
which has substantially the same shareholders. An amalgamation involves combining two companies to form a third company, or where
one company is merged with another company.
An application must be made to the Commissioner of Stamp Duties for relief (see Question 2). There are claw back provisions,
as the relief granted may later be disallowed. In this case, the
amount of relief given together with interest becomes payable
immediately on the subsequent occurrence of various prescribed
events, such as a disposal of the undertaking within two years.
Asset transfers between associated companies/registered
business trusts
Where the share acquisition or disposal is made under a transfer
of assets (such as shares) between associated companies and/
or registered business trusts, stamp duty relief may be granted
subject to certain conditions being met.
A company is associated with another company in either of the
following situations:
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The company is the beneficial owner (directly or indirectly) of not
less than 75% of the issued share capital of the other company.
8. Is there a requirement to withhold tax on dividends or other
distributions? If yes, provide brief details.
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There is no requirement to withhold tax on dividends or other
distributions. Dividends paid by any tax resident company in Singapore are exempt from withholding tax as Singapore operates a
one-tier corporate tax system. Dividends are not generally subject
to tax (see Question 9).
In both situations, a company that is an indirect beneficial owner
or holding company of the other company must have more than
half of the voting power in relation to the other company.
For more information
Another company is a holding company which is the beneficial owner (directly or indirectly) of not less than 75% of
the issued share capital of each of the transferor company
and the transferee company.
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Corporate Q&A
No other taxes are generally payable on corporate transactions.
However, transactions involving certain goods or products may be
subject to customs or excise duties or vehicle taxes. Examples of
such dutiable goods include liquors, cigarettes, cigars, tobacco
leaves, motor cars and petroleum.
Tax on Transactions Handbook 2011/12
Country Q&A
from the Ministry of Finance. The key criterion for obtaining
a waiver is that the change of shareholding is not intended
to derive a tax benefit or obtain any tax advantage. If the
waiver is given, the deduction is made against income from
the same trade or business. Capital allowances are available for plant and machinery, and industrial buildings, but
the allowance for industrial buildings has been phased out.
With the phase-out, businesses cannot claim allowances on
capital expenditure incurred after 22 February 2010 on the
construction or purchase of industrial buildings or structures except in specified scenarios.
As with the application for stamp duty relief for a reconstruction
or amalgamation scheme, an application must be made to the
Commissioner of Stamp Duties for relief. The relief granted may
later be disallowed and the amount of relief given together with
interest becomes immediately payable on the subsequent occurrence of various prescribed events.
New incentives
Following the Singapore budget statement of 2010, two new incentives relating to mergers and acquisitions (M&A) have been
introduced and recently given statutory effect:
Corporate Q&A
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M&A allowance. This allowance is in the form of a deduction
for capital expenditure incurred for any qualifying acquisition
of ordinary shares in a target, executed from 1 April 2010 to
31 March 2015 (inclusive of both dates) and is calculated at
5% of the capital expenditure incurred (that is, the acquisition value of the ordinary shares). The deduction is capped
at S$5 million in a single year of assessment, with an
aggregate acquisition value of S$100 million. The deduction
is generally written down equally over a period of five years
against the acquiring company’s trade or business income.
For example, if a qualifying acquisition was executed on 1
April 2010 and the acquisition value was S$110 million,
the maximum deduction will be capped at S$5 million (that
is, 5% of S$100 million), to be written down over five years.
Accordingly, the acquiring company will enjoy a deduction of
S$1 million per year of assessment from Year of Assessment
2011 to Year of Assessment 2015. In addition, unutilised
deductions in a year of assessment may, subject to conditions,
be carried forward to subsequent years of assessment.
However, there is a new Land Intensification Allowance
(LIA) incentive affecting users of buildings in various sectors (such as petrochemicals, marine and offshore engineering, medical technology and aerospace). Under the LIA
incentive, qualifying businesses can claim allowances on
qualifying capital expenditure incurred on or after 23 February 2010 for the construction, or renovation or extension of
a qualifying building or structure, up to the date of the completion of the construction or renovation or extension. The
qualifying capital expenditure includes the cost of feasibility
study, design fees, preparation costs, costs of construction,
renovation and piling, demolition costs, legal and other
professional fees and stamp duties payable. Approval for
the LIA incentive is granted by the Economic Development
Board from 1 July 2010 to 30 June 2015 (inclusive).
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There are also other prescribed conditions which must be
satisfied to enjoy the deduction. For example, where the
acquiring company and the target are part of the same group
of companies, a deduction is only allowed if the total number
of ordinary shares acquired by the acquiring company results
in a increase (to specified thresholds) in the total number of
ordinary shares of the target held on the acquisition date by
all companies in the group (excluding the target itself).
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Stamp duty relief for M&A deals. Under this relief, the transfer
of shares for a qualifying acquisition of ordinary shares in a
target is eligible for stamp duty relief capped at S$200,000
per year. This relief is available for qualifying acquisitions
executed from 1 April 2010 to 31 March 2015 (inclusive of
both dates). To enjoy the relief, prescribed conditions must
be satisfied. For example, as with the M&A allowance, where
the acquiring company and target are part of the same group
of companies, the qualifying acquisition must result in an increase (to specified thresholds) in the total number of ordinary
shares in the target held on the acquisition date by all the
companies in the group (excluding the target itself).
11.Please set out the tax advantages and disadvantages of a
share acquisition for the buyer.
The advantages of a share acquisition for the buyer are:
The target may still be able to enjoy unabsorbed capital
allowances, losses and donations if a waiver is obtained
For more information
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at least 75% of the total number of issued ordinary
shares in one company are beneficially held, directly or
indirectly, by the other;
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at least 75% of the total number of issued ordinary
shares in each of the two companies are beneficially
held, directly or indirectly, by a third Singapore company.
Dividends received are exempt from tax in the hands of the
buyer (shareholder).
Tax incentives may continue to be available to the company,
provided approval is obtained from the relevant authorities
granting the incentives.
Disadvantages
The disadvantages of a share acquisition for the buyer are:
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Advantages
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Group relief may be available. If the target and the buyer form
part of the same group following the share acquisition, if certain
conditions are met, unabsorbed capital allowances, losses and
donations may be transferred by one to the other to set off taxable income. Group relief only applies if the transferor and the
claimant are Singapore incorporated companies. Two Singapore companies are members of the same group if either:
The buyer is the person liable to pay stamp duty on an
instrument of transfer.
If the acquisition is financed, the buyer is not able to deduct the interest expense incurred as the dividend income
is exempt from tax (see Question 8).
Subject to the “shareholders’ test”, unabsorbed capital
allowances, losses and donations of the target may be
brought forward to be set-off against the future income of
the target. This test requires the same shareholders at two
relevant dates to own at least 50% of the target’s shares.
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the last day of the year of assessment in which the
allowances arose;
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the first day of the year of assessment in which the
allowances would otherwise be claimed.
For losses and donations, the two relevant dates are:
„„
the last date of the year in which the loss was incurred
or the donation was made;
„„
the first day of the year of assessment in which the loss
or donation would otherwise be deductible.
A share acquisition by the buyer may result in the target
not meeting the shareholder’s test, resulting in the target’s
inability to carry forward unabsorbed capital allowances,
losses or donations.
The target remains liable for all its tax obligations to the tax
authority and this becomes the concern of the buyer going
forward.
Tax incentives may cease to be available to the company, if
approval is not given by the relevant authorities granting the
incentives.
12.Please set out the tax advantages and disadvantages of a
share disposal for the seller.
3). However, stamp duty relief may be available if the transfer is
between associated companies or registered business trusts or
due to a reconstruction or amalgamation (see Question 10).
Income tax
A transfer of trading stock (such as inventory) can give rise to a
gain or profit that is subject to tax.
GST
A taxable person must collect GST and account to the Comptroller of GST if he transfers, or disposes of, the assets of his business, whether for consideration or not, as he is making a supply
for the purposes of the GST Act. However, if certain conditions
are met, this transfer of assets may be considered an excluded
transaction and therefore not subject to GST.
15.Are any exemptions or reliefs available to the liable party? If
yes, provide brief details.
See Question 14.
16.Please set out the tax advantages and disadvantages of an
asset acquisition for the buyer.
Advantages
The tax advantages of an asset acquisition for the buyer are:
Advantages
The advantage of a share disposal for the seller is that, going forward, the tax obligations of the target remain with the company
and not the seller.
Disadvantages
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The seller will be taxed on the profits arising from the sale if the
sale is made pursuant to a trade, business or profession carried
on by the seller (that is, the sale proceeds are revenue rather than
capital in nature).
13.What transaction structures (if any) are commonly used to
minimise the tax burden? Give brief details of the effect of
each structure.
No specific share transaction structures are commonly used to
minimise the tax burden.
The parties would also typically consider the possibility of an asset
acquisition or disposal (see Questions 14 to 18) to determine whether
this may be a better structure for minimising the tax burden.
ASSET ACQUISITIONS AND DISPOSALS
14.What taxes are potentially payable on an asset acquisition/
asset disposal?
The buyer avoids taking over the tax obligations of the company that owns the asset, unlike on a share acquisition.
The buyer can claim capital allowances on certain assets
such as plant and machinery.
Financing costs may be deductible against income arising
from the assets acquired.
Disadvantages
The disadvantage of an asset acquisition for the buyer is that stamp
duty on an asset acquisition involving immovable property is payable
at a higher rate than on a share acquisition (see Question 3).
17.Please set out the tax advantages and disadvantages of an
asset disposal for the seller.
Advantages
The tax advantages of an asset disposal for the seller are:
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A balancing allowance may arise in favour of the seller if the
amount of capital expenditure on the asset not yet claimed as
capital allowances exceeds the open market price of the asset.
Disposing of an asset does not affect the ability of the seller
to continue to claim unabsorbed capital allowances (on
other assets), losses and donations.
Disadvantages
The tax disadvantages of an asset disposal for the seller are:
Stamp duty
„„
Stamp duty is chargeable on instruments relating to the transfer,
conveyance and assignment of immovable property (see Question
For more information
The seller will be taxed on the profits from the sale if the
sale arises from a trade, business or profession carried on
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Corporate Q&A
„„
For capital allowances, the two relevant dates are:
Tax on Transactions Handbook 2011/12
Country Q&A
by the seller (that is, the sale proceeds are of a revenue
rather than a capital nature).
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The seller may be left with a dormant company after the
assets held by the company have been disposed of, and
will incur costs winding up the company. In doing that, all
outstanding tax liabilities must be provided for.
A balancing charge may arise against the seller if the
amount of capital expenditure on the asset not yet claimed
as capital allowances is less than the open market price of
the asset.
18.What transaction structures (if any) are commonly used to
minimise the tax burden? Give brief details of the effect of
each structure.
Corporate Q&A
No particular acquisition transaction structures are commonly
used to minimise the tax burden.
The parties would typically consider the possibility of a share
acquisition or disposal (see Questions 9 to 13) as an alternative
and assess whether this structure may minimise their tax burden.
LEGAL MERGERS
is taken as having continued on with its businesses seamlessly.
Under the new tax framework, most of the tax consequences of a
continuing business apply to the amalgamated company.
21.What transaction structures (if any) are commonly used to
minimise the tax burden? Give brief details of the effect of
each structure.
No specific structure is commonly used.
JOINT VENTURES
22.What taxes are potentially payable on establishing a joint
venture company (JVC)?
There are no specific tax provisions that apply to JVCs. The same
general tax considerations apply (see Questions 3 to 5).
23.Are any exemptions or reliefs available to the liable party? If
yes, provide brief details.
There are no specific reliefs available in relation to joint ventures.
19.What taxes are potentially payable on a legal merger?
See Questions 3, 4 and 5.
For income tax purposes, the amalgamating companies are treated as having ceased business and disposed of their assets and
liabilities, and the amalgamated company is treated as having
acquired or commenced a new business. This treatment may give
rise to taxable gains in the hands of the amalgamating companies because revenue gains from assets are subject to tax based
on either the transfer price or open market value. A balancing
allowance or charge on plant and machinery or industrial buildings must also be accounted for on disposal.
20.Are any exemptions or reliefs available to the liable party? If
yes, provide brief details.
See Question 5, GST and for stamp duty relief, see Question 10.
To minimise the income tax consequences arising from amalgamations, a new tax framework for certain statutory amalgamations has
recently been introduced. The new tax framework recognises the
legal consequences of amalgamating that arise under the Companies Act and the Banking Act and gives effect to amalgamations by
aligning their tax treatment with these legal consequences.
This is achieved by treating the businesses of the amalgamating
companies as continuing, with the result that there has been no
acquisition of new businesses by the amalgamated company. In
turn, all risks and benefits that existed before the merger are
transferred and vested in the amalgamated company.
24.What transaction structures (if any) are commonly used to
minimise the tax burden? Give brief details of the effect of
each structure.
No specific structure is commonly used.
COMPANY REORGANISATIONS
25.What taxes are potentially payable on a company reorganisation?
A company reorganisation can, for example, take the form of a
reconstruction or transfer of assets.
The same general stamp duty, income tax and GST considerations
apply in relation to a company reorganisation (see Questions 3 to 5).
26.Are any exemptions or reliefs available to the liable party? If
yes, provide brief details.
Exemptions or reliefs are available to the liability party. See Questions 5, 10 and 20.
27.What transaction structures (if any) are commonly used to
minimise the tax burden? Give brief details of the effect of
each structure.
No specific structure is commonly used.
On the date of amalgamation, that is, the date shown in a notice
of amalgamation or a court order, the amalgamated company
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RESTRUCTURING AND INSOLVENCY
28.What are the key tax implications of the business insolvency
and restructuring procedures in your jurisdiction?
In business insolvency, non-current assets are disposed of and
the balancing allowance or charge (that is, the difference between the sale proceeds and the tax written down value) is determined. A balancing charge is subject to tax.
The sale proceeds from trading stocks sold at market value are
subject to tax.
The liquidator must make full provision for tax liabilities before
making any distributions to shareholders.
SHARE BUYBACKS
34.What transaction structures (if any) are commonly used to
minimise the tax burden? Give brief details of the effect of
each structure.
No specific structure is commonly used.
REFORM
35.Please summarise any proposals for reform that will impact
on the taxation of corporate transactions.
There are currently no proposals for reform.
* The author acknowledges the assistance given by Shao Tong
Tan and Novella Chan in preparing this chapter.
29.What taxes are potentially payable on a share buyback?
KAY KHENG TAN
See Questions 3, 4 and 5 for general considerations.
WongPartnership LLP
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Payments made by the company to shareholders in relation to a
share buyback may be deemed to be dividends, which had tax implications under the old imputation system. These dividends are
now exempt from tax in the hands of shareholders, as Singapore
currently operates a one-tier corporate tax system where tax paid
by the company is the final tax.
30.Are any exemptions or reliefs available to the liable party? If
yes, provide brief details.
There are no specific exemptions or reliefs.
31.What transaction structures (if any) are commonly used to
minimise the tax burden? Give brief details of the effect of
each structure.
Qualified. Singapore, 1990
Areas of practice. Revenue law: contentious and advisory/
transactional work relating to income tax; stamp duties;
property tax; GST. Civil litigation and arbitration including
corporate/commercial disputes (including accounting-related matters); property disputes (including land acquisitions).
Recent transactions
„„
„„
No specific structure is commonly used.
PRIVATE EQUITY FINANCED TRANSACTIONS: MBOs
32.What taxes are potentially payable on a management buyout
(MBO)?
„„
„„
Acting in ZT v Comptroller of Income Tax (on the taxability of late completion interest received in a property
transaction/time bar issues).
Acting in ABB v Comptroller of Income Tax (on the taxation of stock options granted to an employee’s estate).
Advising on Sri Trang Agro-Industry Public Company
Limited’s IPO in Singapore.
Advising on Keppel Land Limited’s issuance of S$500
million (aggregate principal amount of 1.875% convertible bonds) due 2015.
No special tax rules apply in relation to management buyouts.
The general tax considerations apply (see Questions 3, 4 and 5).
33.Are any exemptions or reliefs available to the liable party? If
yes, provide brief details.
There is no specific exemption or relief available to the liable party.
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