Legal Updates

New Acts

Stamp Duties (Amendment) Act 2000 (A36/2000)

The Stamp Duties (Amendment) Act 2000 repeals and re-enacts s 15 of the Stamp Duties Act to provide for relief from ad valorem stamp duty upon (a) the reconstruction or amalgamation of companies, and (b) the transfer of the beneficial interest in assets between associated companies. The new s 15 applies to instruments made on or after 1 July 2000.

The prescribed conditions mentioned in the new s 15 have been implemented by way of subsidiary legislation (see 'Changes in Subsidiary Legislation' below).

The re-enacted s 15 reads as follows:

Relief from ad valorem stamp duty upon reconstruction or amalgamation of companies and transfer of assets between associated companies

15(1) If it is shown to the satisfaction of the Commissioner that the prescribed conditions have been fulfilled, ad valorem stamp duty under Article 3 (a), (b) and (c) in the First Schedule shall not be chargeable on any instrument made on or after 1st July 2000 for the purposes of or in connection with -

(a) the transfer of the undertaking or shares in respect of a scheme for the reconstruction of any company or companies, or the amalgamation of any companies; or

(b) the transfer, conveyance or assignment of any beneficial interest in any asset between associated companies.

(2) No instrument referred to in this section shall be deemed to be duly stamped unless -

(a) it is stamped with the duty to which it would but for this section be liable; or

(b) it has been brought to the Commissioner under section 37 and he has certified under section 38 that the full duty with which it is chargeable has been paid or that it is not chargeable with duty.

(3) Where any claim for relief from duty under this section has been allowed and it is subsequently found that -

(a) any declaration or other evidence furnished in support of the claim was untrue in any material particular; or

(b) any prescribed matter which the Commissioner was satisfied would not occur in allowing the relief, does occur, the claim shall be deemed to have been disallowed and an amount equal to the duty remitted shall -

(i) become payable forthwith; and

(ii) be recoverable from the transferee company as a debt due to the Government, together with interest thereon at the rate of 6% per annum, from the date on which the duty would have become chargeable if this section had not been enacted.

The Act also amends the Stamp Duties Act to provide for adjudication fees in respect of instruments made pursuant to a transfer of assets between associated companies under the new s 15.

Estate Duty (Amendment) Act 2000 (A30/2000)

With effect from 1 January 2001, the Estate Duty Act has been amended with the deletion of the definition of 'estate duty affidavit' and substitutes a definition for 'estate duty return', so as to implement the use of an estate duty return in place of an estate duty affidavit.

Section 14 (dealing with dwelling houses and all other property) has been amended by inserting a new subsection (5A) to allow dwelling-houses used partly for the purposes of certain trades, businesses, professions or vocations to qualify for exemption from estate duty. Section 14 has also been amended to clarify that a 'dwelling-house' does not include a dwelling-house used wholly or partly as a hostel or quarters or any other prescribed purpose. The changes in s 14 are effective from 18 December 2000.

Goods and Services Tax (Amendment) Act 2000 (A34/2000)

With effect from 18 December 2000, the Goods and Services Tax Act has been amended as follows:

s 21(3) of the Goods and Services Tax Act is amended to allow the GST in respect of prescribed trust services to be zero-rated;
s 33(1) is amended to provide that the Comptroller of Goods and Services Tax may direct an agent, manager or factor to be responsible for any GST payable by, and duties of, an overseas principal who does not have his usual place of residence in Singapore; and
a new s 32A is introduced to provide for the circumstances in which input tax is deemed to have been deducted by a transferee to whom assets have been transferred as part of a transfer of a business as a going concern.

Customs (Amendment) Act 2000 (A33/2000)

Pursuant to the Customs (Amendment) Act 2000, the Customs Act has been amended to make more distinct Singapore's obligations under the General Agreement on Tariffs and Trade 1994. The following are some of the changes. These changes were effective from 1 January 2001.

The definition of 'customs duty' is amended to mean duty on goods imported into Singapore, excluding any excise duty. Presently, 'customs duty' is defined to mean any import or excise duty imposed by the Customs Act.

The definition of 'excise duty' is amended to mean duty on goods, whether manufactured in Singapore or elsewhere. Presently, 'excise duty' is defined to mean duty on goods manufactured in or imported into Singapore.

When the amendments to the definitions of 'customs duty' and 'excise duty' are effective, it will be clearer that customs duty is levied on imported goods, while excise duty is levied on manufactured goods.

The definition of 'import duty' has been deleted. Previously, 'import duty' was defined to mean duty on goods imported in Singapore.

Section 10 is amended to incorporate a new subsection to provide that the imposition of excise duty shall be on a non-discriminatory basis regardless of the place of origin or manufacture of the goods.

Section 22 is amended so that the methods of valuation provided therein are applicable not only to imported goods, but also to locally-manufactured goods.

Section 22A is amended. The section heading of that provision has been amended to clarify that the methods of valuation provided therein are applicable for the purposes of levying customs duty.

The Act also makes consequential amendments to the Countervailing and Anti-Dumping Duties Act, the Free Trade Zones Act and the Goods and Services Tax Act.

Trade Unions (Amendment) Act 2000 (A11/2000)

The Trade Unions Act is amended with effect from 15 December 2000 for the following purposes:

to enable the Registry of Trade Unions to maintain its records in an electronic form;
to allow trade unions greater flexibility in the purchase of real property;
to simplify the voting process of a trade union in relation to a change to its name, an amalgamation with one or more other trade unions, and the use of money received from members for a purpose other than that for which the money is received;
to empower the Minister for Manpower to stop the payment of moneys of a trade union held by a finance company or a co-operative society carrying on the business of managing and investing funds;
to increase the penalties of various offences under the Act; and
to empower the Registrar of Trade Unions to compound any offence which has been prescribed by the Minister as an offence which may be compounded.

Changes to Subsidiary Legislation

Stamp Duties (Relief from Stamp Duty upon Reconstruction or Amalgamation of Companies) Rules 2000 (S581/2000)

With effect from 1 July 2000, the conditions for relief from ad valorem stamp duty in respect of a scheme for the reconstruction of any company or companies or the amalgamation of companies referred to in s 15(1) of the Stamp Duties Act are as follows:

(a)	that a company with limited liability (referred to in these Rules as the transferee company) -
	(i)	is to be registered;
	(ii)	has been incorporated; or
	(iii)	has increased its capital,
	with a view to the acquisition either of the undertaking, or of not less than 90% of the issued share capital, of any particular existing company; and
(b)	that not less than 90% of the consideration for the acquisition (except such part thereof as consists in the transfer to or discharge by the transferee company of liabilities of the existing company) consists of -
	(i)	where an undertaking is to be acquired, the issue of shares in the transferee company to the existing company or to the shareholders of the existing company; or
	(ii)	where shares are to be acquired, the issue of shares in the transferee company to the shareholders of the existing company in exchange for the shares held by the shareholders in the existing company.

Stamp Duties (Relief from Stamp Duty upon Transfer of Assets between Associated Companies) Rules 2000 (S580/2000)

With effect from 1 July 2000, the conditions for relief from ad valorem stamp duty upon the transfer of assets between associated companies referred to in s 15(1) of the Stamp Duties Act are as follows:

the effect of any instrument executed on or after 1 July 2000 is to transfer, convey or assign the beneficial interest in any asset owned by one associated company (referred to in these Rules as the transferor company) to another associated company (referred to in these Rules as the transferee company);
the transferee company is a company that is incorporated in Singapore, or resident in Singapore for income tax purposes within the meaning of s 2 of the Income Tax Act;
at the time of execution of the instrument, the transferor company and the transferee company have been associated for at least 12 months prior to the transfer, conveyance or assignment referred to in paragraph (a) above, except where the transferee company had been incorporated specially for the purpose of the acquisition of the asset referred to in paragraph (a);
valuable consideration for the acquisition by the transferee company is paid to the transferor company either in cash or by an issue of shares in the transferee company, at the open market value;
the transfer, conveyance or assignment of the asset is for bona fide commercial reasons;
the transfer, conveyance or assignment by the transferor company to the transferee company is in respect of the entire beneficial interest held by the transferor company in the asset; and
the instrument was not made pursuant to or in connection with an arrangement under which -

(a)	the consideration or any part of it for the acquisition of the asset by the transferee company is (directly or indirectly) provided by or received from -
	(i)	a person other than the transferee company; or
	(ii)	a company (referred to in this rule as the third company) which is not associated to the transferee company, unless the third company is a financial institution acting in the capacity of a lender of funds to the transferee company; and
(b)	the beneficial interest in the asset was previously (directly or indirectly) transferred, conveyed or assigned to the transferor company by any company which was not associated to the transferor company unless -
	(i)	duty was paid on the acquisition by, or the transfer, conveyance or assignment to, the transferor company;
	(ii)	relief for such duty was allowed; or
	(iii)	such duty was remitted.

For the purposes of these Rules, a company shall be taken to be associated with another company if -

the company is the beneficial owner (directly or indirectly) of not less than 75% of the issued share capital of the other company, and where the company is an indirect beneficial owner of that other company, the company has more than half of the voting power in respect of that other company; or
the company is a holding company which is the beneficial owner (directly or indirectly) of not less than 75% of the issued share capital of each of the transferor company and the transferee company, and where the holding company is an indirect beneficial owner of that other company, the holding company has more than half of the voting power in respect of that other company.

Insurance (Exemption) Notification 2000 (S577/2000)

This Notification shall come into operation on 1 January 2001.

Where, pursuant to a securities lending arrangement, an insurer loans securities which are assets of an insurance fund established by him, the insurer shall be exempted from s 20 of the Insurance Act insofar as concerns that loan of securities.

Where, pursuant to a securities lending arrangement, an insurer borrows securities and provides as collateral for the securities borrowed any asset of an insurance fund established by him, the insurer shall be exempted from s 20 of the Insurance Act insofar as concerns that provision of collateral.

Section 20 of the Insurance Act provides that where an insurer has established an insurance fund under this Act, the insurer shall secure that any document evidencing the insurer's title to assets of the fund, so long as the document is held by or on behalf of the insurer, shall be kept in Singapore or, if not so kept, shall be kept in the custody of a person approved by the Authority, and at a place and on terms so approved.

Elizabeth Wong
Allen & Gledhill

Relief from ad valorem stamp duty upon reconstruction or amalgamation of companies and transfer of assets between associated companies

15(1)	If it is shown to the satisfaction of the Commissioner that the prescribed conditions have been fulfilled, ad valorem stamp duty under Article 3 (a), (b) and (c) in the First Schedule shall not be chargeable on any instrument made on or after 1st July 2000 for the purposes of or in connection with -
	(a)	the transfer of the undertaking or shares in respect of a scheme for the reconstruction of any company or companies, or the amalgamation of any companies; or
	(b)	the transfer, conveyance or assignment of any beneficial interest in any asset between associated companies.
(2)	No instrument referred to in this section shall be deemed to be duly stamped unless -
	(a)	it is stamped with the duty to which it would but for this section be liable; or
	(b)	it has been brought to the Commissioner under section 37 and he has certified under section 38 that the full duty with which it is chargeable has been paid or that it is not chargeable with duty.
(3)	Where any claim for relief from duty under this section has been allowed and it is subsequently found that -
	(a)	any declaration or other evidence furnished in support of the claim was untrue in any material particular; or
	(b)	any prescribed matter which the Commissioner was satisfied would not occur in allowing the relief, does occur, the claim shall be deemed to have been disallowed and an amount equal to the duty remitted shall -
		(i)	become payable forthwith; and
		(ii)	be recoverable from the transferee company as a debt due to the Government, together with interest thereon at the rate of 6% per annum, from the date on which the duty would have become chargeable if this section had not been enacted.