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Singapore Concludes Stamp Duty Consultation

by Mary Swire,, Hong Kong

21 November 2012

Singapore’s Ministry of Finance has reported on the suggestions it received during the public consultation on the draft Stamp Duties (Amendment) Bill 2012, which ended on October 10, 2012.

The legislation will put into effect the enhancement of the stamp duty concession under the Mergers and Acquisitions (M&A) Scheme announced in the 2012 Budget, as well as changes arising from the periodic review of the stamp duty tax system to improve legislative clarity or stamp duty administration.

The tax change arising out of the 2012 Budget extends stamp duty relief to acquisitions carried out through multiple tiers of entities, and not just through one tier of wholly-owned subsidiaries. The amount of stamp duty relief, which is granted to the acquiring company only, is capped at SGD200,000 (USD163,000) for each financial year.

The M&A Scheme seeks to help companies incorporated and tax resident in Singapore, which carry on substantive business operations in Singapore, to grow by acquisition. It is relevant to a company that acquires a controlling ordinary share stake in another company, and, in addition to a corporate income tax allowance, provides stamp duty relief on any contract or agreement for the sale or transfer of ordinary shares under an M&A deal.

The sale or transfer instrument must be executed during the period from April 1, 2010 to March 31, 2015 to be eligible for the relief, and the acquiring company may acquire the ordinary shares of the target company directly or through an acquiring subsidiary.

The bill will also include an extension to the appeal deadline for stamp duty from the current 21 days to 30 days to align with the deadlines for other tax types such as income tax and the goods and services tax. Additionally, the bill clarifies that stamp duty is not chargeable on a conveyance on sale of any type of property other than immovable property (such as land), stock and shares.

TAGS: Finance | tax | business | law | real-estate | mergers and acquisitions (M&A) | Singapore | ministry of finance | legislation | stamp duty | legislation amendments

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