ASEAN Regulatory Brief: M&A, GST, and Bilateral Trade

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In this ASEAN Regulatory Brief, we look at some of the important regulatory changes taking place in Singapore, Malaysia, and Thailand during the second half of the month of July.

  • Revised e-Tax Guide on Income Tax and Stamp Duty: Mergers and Acquisitions Scheme

The Inland Revenue Authority of Singapore (IRAS) has issued a revised e-Tax Guide on Income Tax and Stamp Duty: Mergers and Acquisitions Scheme. The new guide is an attempt by the Singaporean government to encourage small and medium enterprises (SMEs) to grow through strategic acquisitions.

According to the new guide, a Singapore company that makes a qualifying acquisition of the ordinary shares of another company will be able to receive certain tax breaks, including:

  • An M&A allowance on the purchase consideration
  • Stamp duty relief on the agreement for the sale of equitable interest in ordinary shares or instrument of transfer executed in connection with the qualifying share acquisition
  • A double tax deduction (DTD) on transaction costs incurred from the qualifying share acquisition

Additional areas covered by the new guide included the following:

  • Qualifying share acquisitions
  • Qualifying conditions
  • Offsetting of the M&A allowance and DTD on transaction costs
  • Group relief, carry-back and carry-forward of the unabsorbed M&A allowance and DTD on transaction costs
  • Events resulting in forfeiture or reduction in M&A allowance and/or stamp duty relief
  • Registered business trust
  • New GST guide issued on tertiary education

A new Goods and Services Tax (GST) guide on tertiary education has been issued by the Royal Malaysian Customs Department. The government defines tertiary education as post-secondary education up to higher education, including technical education and vocational training.

Related-Reading-Icon-Asean LinkRELATED: Malaysia GST: Implications for Manufacturers

The guide focuses on a number of key areas relevant to businesses engaged in the education sector, these include:

  • Supplies made by public or private higher educational institutions
  • Supplies made to public or private universities
  • Fees charged
  • Course of study and resulting GST implications
  • Provision of food and accommodation
  • Transportation of students
  • Administrative services
  • Research
  • Grants from overseas
  • GST on Non-Reviewable Contracts
  • Thailand looks to increase bilateral trade with Vietnam

In official statements, the governments of Thailand and Vietnam have announced that they are aiming to increase bilateral trade between the two countries to US$20 billion by 2020.

In 2014, the two Southeast Asian countries saw US$10.451 billion in bilateral trade. Thailand imported US$10.451 billion and exported US$7.182 worth of products to Vietnam.

In the first five months of 2015, total trade between Thailand and Vietnam amounted to US$5.108 billion. Thailand imported US$1.764 billion worth of Vietnamese products and exported US$3.344 billion to its neighboring country.

In a further sign of the growing relationship between the two countries, on July 20-22, Thailand will host the second Joint Trade Committee of Thailand and Vietnam, to be held in Bangkok. Officials present at the meeting will discuss such issues as economics, politics, security, and culture.


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