Acquisition of Shares of Companies

 

The Mergers and Acquisitions (M&A) scheme was introduced in Budget 2010 and enhanced in Budget 2012.

Under the M&A scheme, when a Singapore company acquires ordinary shares in another company from 1 Apr 2010 to 31 Mar 2015, Stamp Duty relief may be granted on the acquisition if the conditions in the Stamp Duties (Relief from Stamp Duty Upon Acquisition of Shares of Companies) Rules 2013 are met. For a more detailed description and explanation of the Stamp Duty relief, please refer to the existing IRAS e-Tax Guide - Income Tax and Stamp Duty: Mergers and Acquisitions Scheme (Fourth edition). Please provide a written declaration that the Sale and Purchase Agreement or Transfer documents is not liable to ACD.NEW!

With effect from 11 Mar 2017, Stamp Duty Relief will not be granted on transfers involving residential Property-Holding Entities where Additional Conveyance Duties is applicable under section 23 of the Stamp Duties Act.

Budget 2015 Changes

In Budget 2015, the M&A scheme was extended for 5 years until 31 Mar 2020.

  • To align with the lowering of the cap for qualifying M&A deals from $100 million to $20 million, the cap for Stamp Duty relief under the M&A scheme was correspondingly lowered from $200,000 to $40,000 (i.e. $20 million x 0.2%) for each financial year 
  • The “12-month look-back period” for step acquisitions that straddle across financial years was removed to simplify the scheme
  • Introduction of new shareholding threshold of 20% with safeguard conditions to support SMEs in taking their first step to grow locally and offshore 
  • The 75% shareholding threshold was removed 

For more details on the changes, please see Excerpt from Budget 2015 Annex A-6

 

Budget 2016 Changes

To support more M&As, the existing cap for qualifying M&A deals will be doubled from $20 million to $40 million. Correspondingly, the cap for Stamp Duty relief under the M&A scheme will be granted for up to $40 million of consideration paid for each financial year. This change will take effect from 1 Apr 2016 to 31 Mar 2020.

The revised IRAS e-Tax Guide - Income Tax and Stamp Duty: Mergers and Acquisitions Scheme will be updated with the Budget 2016 changes in due course.

 

RATE THIS PAGE

  • Strongly Disagree
  • Strongly Agree

Information is easy to understand.

Information is useful.

Information is easy to find.

 
Please email us if you would like us to respond to your enquiries.