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IRAS Introduces Revised Singapore Taxation Regime of M&A Allowance and Stamp Duty Relief

Last modified: April 17, 2019
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TAXATION-IN-SINGAPORE-1-300x300IRAS has put forth a few revisions in the e-tax guide, regarding the Singapore’s mergers and acquisitions (M&A) allowance and stamp duty relief scheme. Singaporean government in the Budget 2010 had introduced both the schemes under the Singapore taxation regime.

“If a company incorporated in Singapore acquires another company, then the acquiring company gets a mergers and acquisitions allowance. The amount disbursed is equal to five percent of the value of the acquisition. However, this acquisition should happen during the period between April 1, 2010 and March 31, 2015. In addition, the IRAS has capped the maximum amount of M&A allowance to S$5 million for each year of assessment. This remains valid for all qualifying share acquisitions carried out in that year,” said Ms Meena, the Business Head of SBS Consulting.

She further added, “Another feather in the cap is the stamp duty relief scheme. Under this, relief on stamp duty is granted for any type of contract or agreement for sale of an equitable interest in ordinary shares. It is also valid on any transfer of documents for the acquisition of the ordinary shares; under the mergers & acquisitions deal. The amount of relief that can be provided is capped at S$200,000 for each financial year. However, to avail the benefits of stamp duty relief as well as the mergers & acquisition allowance, both, the deal must be executed during the period between April 1, 2010 and March 31, 2015.”

Apart from the two relief schemes given above, IRAS has also introduced a double tax deduction scheme in the revised e-tax guide for Singapore taxation. Under this, double tax deductions will be granted on the transaction costs incurred on qualifying share acquisitions, made during the period between February 17, 2012 and March 31, 2015. This deduction is marked to be capped at S$100,000 for a year of assessment. In addition, a tax allowance of up to 200 percent on transaction costs is applicable.

“To make things more clear, transactions costs include fees for legal purposes, fees incurred for accounting services Singapore, tax fees, valuation fees, and such other professional fees. These fees should be only be incurred for a qualifying share acquisition, but should not cover any professional and incidental fees in respect of a loan arrangement. However, if the transactions costs were incurred before February 17, 2012, then they remain invalid for claiming tax-concessions,” said Ms. Meena in her concluding statement.

About SBS Consulting:

Since its inception in 2010, SBS Consulting has been serving the Singapore business houses, thereby gaining the reputation as one of the best corporate tax service firms in the country. It also has many international clienteles. Its services include Singapore tax filing, accounting services, Singapore audit services, bookkeeping service, and XBRL filing services.  The firm also specializes in offering Singapore company formation, corporate secretarial services, payroll service, and immigration and work visa services.


SBS Consulting Pte Ltd
High Street Centre,
#18-03, 1 North Bridge Road,
Singapore – 179094
Tel: +65 6536 0036
Email: info@sbsgroup.com.sg
Website: https://www.sbsgroup.com.sg/

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