The Inland Revenue Authority of Singapore (IRAS) has issued a revised e-Tax Guide setting out the details of Singapore's mergers and acquisitions (M&A) allowance and stamp duty relief scheme, which was introduced in Budget 2010 and enhanced in Budget 2012. Relevant to a company incorporated and tax resident in Singa
The Inland Revenue Authority of Singapore (IRAS) has issued a revised e-Tax Guide setting out the details of Singapore's mergers and acquisitions (M&A) allowance and stamp duty relief scheme, which was introduced in Budget 2010 and enhanced in Budget 2012.
Relevant to a company incorporated and tax resident in Singapore that acquires a controlling ordinary share stake in another company, the M&A scheme grants the acquiring company an M&A allowance, equal to five percent of the value of the acquisition, during the period between April 1, 2010 and March 31, 2015 (both dates inclusive).
The maximum amount of M&A allowance granted to an acquiring company is SGD5m (USD4m) for each year of assessment for all qualifying share acquisitions executed in that year (i.e. five percent of the purchase consideration of qualifying share acquisitions aggregating up to SGD100m).
Under the scheme, stamp duty relief is also granted on any contract or agreement for sale of an equitable interest in ordinary shares, or on any transfer documents for the acquisition of the ordinary shares, under an M&A deal. The instrument must be executed during the period between April 1, 2010 and March 31, 2015 (both dates inclusive) to be eligible for the relief.
The amount of stamp duty relief, which is granted to the acquiring company only, is capped at SGD200,000 for each financial year.