17 March 2017

On 10 March 2017, the Inland Revenue Authority of Singapore (IRAS) issued an e-Tax Guide, “Stamp Duty: Additional Conveyance Duties (ACD) on Residential Property-Holding Entities”.

This e-Tax Guide explains the treatment of ACD announced on 10 March 2017 and the calculation of ACD on acquisition/disposal of equity interest in property-holding entities (PHEs) whose primary tangible assets are Singapore residential properties i.e. residential PHEs.

ACD will apply on qualifying acquisition and disposal of equity interest in residential PHEs on or after 11 March 2017. The purpose is to address the stamp duty rate differential between direct acquisition/disposal of residential properties and indirect acquisition/disposal of residential properties via an entity.

Under the ACD provision, a qualifying acquisition/disposal of equity interest in a residential PHE will be treated as a transfer of interest in the underlying properties and therefore, attract ACD in addition to share transfer duty which may apply on the acquisition/disposal of equity interest in a company.

Besides the overview of the ACD treatment, the e-Tax Guide covers the ACD rates, gives guidance on determining the percentage of equity interest that is subject to ACD, highlights that the specific anti-avoidance provision to deter abusive practices, administrative procedures and relevant FAQs.

For full details, please refer to the e-Tax Guide on the IRAS website.

Source: This article was extracted from the Inland Revenue Authority of Singapore’s (IRAS) website. Visit http://www.iras.gov.sg/ for more information.