Singapore Releases New e-Tax Guide for Business Trusts
SINGAPORE – The Inland Revenue Authority of Singapore (IRAS) has released a new e-tax guide which provides details on the income tax treatment of trusts registered under the Business Trusts Act, applicable to both trustee-managers and unit-holders.
A Business Trust is a trust that runs and operates a business enterprise. They have traditionally been used in Singapore to secure Asian equity. A registered business trust (RBT) must have a trustee-manager whose role is to safeguard the interests of the trust’s beneficiaries, known as unit-holders.
The guide states that for tax purpose, in order to be considered a resident of Singapore, an RBT trustee must, in his capacity as such, carry on a trade or business in Singapore, the control and management of which must also be based in Singapore.
Given the similarities in economic purpose, structure and operation, an RBT will be taxed like a company from the first year it commences operation as an RBT.
As such, RBTs will be subject to corporate tax features such as rates of tax, tax reliefs, and foreign tax credits that are applicable to companies. Furthermore, relief under the Stamp Duties Act, which is applicable to companies, also applies to the transfer of assets to an RBT.
The trustee will be taxed on the RBT’s income, but unit-holders will be exempt. Additionally, unit-holders will not receive any credit for the tax paid by the trustee.
Various features of the corporate tax system will also apply to an RBT, these include:
- Group Relief
- The application of a “shareholding test”
- Election of section 24 for sale of property
- Mergers and acquisitions scheme
- Gains on disposal of shares
More detailed information on these individual features is provided on pages four to seven of the e-Tax guide.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.
An Introduction to Tax Treaties Throughout Asia
In this issue of Asia Briefing Magazine, we take a look at the various types of trade and tax treaties that exist between Asian nations. These include bilateral investment treaties, double tax treaties and free trade agreements – all of which directly affect businesses operating in Asia.
Vietnam: A Guide to HR in Asia’s Next Growth Market
In this issue of Vietnam Briefing, we attempt to clarify human resources (HR) and payroll processes in Vietnam. We first take you through the current trends affecting the HR landscape and then we delve into the process of hiring and paying your employees. We next look at what specific obligations an employer has to their employees. Additionally, we guide you through the often complex system of visas, work permits, and temporary residence cards. Finally, we highlight the benefits of outsourcing your payroll to a “pan-Asia” vendor.