From 7 to 25 July 2014, the Ministry of Finance (the “MOF”) conducted a public consultation and sought feedback from the public on proposed changes to the Stamp Duties Act as set out in a consultation paper and draft Stamp Duties (Amendment) Bill 2014 (the “draft Bill”) issued on 7 July 2014.
Three changes to the Stamp Duties Act are proposed, two of which involve changes to existing administration arising from ongoing reviews of the stamp duty system. The third proposed change relates to the implementation of the Seller’s Stamp Duty (the “SSD”) for industrial properties which was introduced on 12 January 2013.
The proposed changes are detailed below:
- Granting Commissioner of Stamp Duties (the “Commissioner”) discretionary power in relation to stamp duty refunds: Currently, a taxpayer who has overpaid stamp duty has to lodge a claim for stamp duty refund with the Commissioner. In cases where an instrument is cancelled, he has to surrender the original instrument to the Commissioner for cancellation of stamp duty certificate. The proposed change will grant the Commissioner the discretion to remove the requirement for taxpayers to lodge claims for stamp duty refund where the Commissioner is able to ascertain that there is an overpayment of stamp duty. The Commissioner may also dispense with the requirement to surrender original instruments for cancellation of stamp duty certificate. This change is scheduled to take effect from 1 January 2015.
- Rationalising interest computation in the event of a claw-back of the stamp duty relief: Stamp duty relief is provided for transfers of assets arising from business restructuring and mergers and acquisitions, subject to certain conditions. Where the conditions are not met after the grant of relief, the relief will be withdrawn and stamp duty with interest will be payable. Currently, the interest on the stamp duty payable is imposed from the date of execution of the document for documents executed in Singapore. For documents executed outside Singapore, interest is imposed from the date the document was first received in Singapore. Where a taxpayer has paid stamp duty upon the execution of a document and then applied for stamp duty relief, it is proposed to amend the Stamp Duties Act to charge interest from the date the stamp duty was refunded upon the grant of relief to the taxpayer. This change is scheduled to take effect from 1 January 2015.
- Extending SSD relief to transfers of industrial properties due to business restructuring: To minimise the impact of SSD on genuine business operations, SSD relief will be granted for the following transfers of industrial properties: (a) Transfer made pursuant to reconstruction or amalgamation or between associated companies under section 15 of the Stamp Duties Act under which relief for buyer’s stamp duty has been allowed to the transferee; and (b) Transfer of industrial properties pursuant to the conversion of a firm or private company to a limited liability partnership. The change will be deemed to have taken effect from 12 January 2013.
The following materials are available from the MOF website www.mof.gov.sg: