SINGAPORE BUDGET 2018: Tax transparency treatment for S-REITs extended to REIT ETFs

/ EdgeProp
February 21, 2018 2:42 PM SGT
Tax transparency treatment for Singapore-listed Real Estate Investment Trusts (S-REITs) will be extended to Singapore-listed Real Estate Investment trusts exchange-traded funds (REIT ETFs).
Distributions received by REIT ETFs from S-REITs, which are made out of the S-REIT’s specified income, will be exempt from the prevailing 17% corporate tax with effect from July 1.
This excludes, however, individual investors who receive any distribution through a partnership in Singapore or from the carrying on of a trade, business or profession.
Offices and condominiums at Orchard Road
(Credit: Samuel Issac Chua/The Edge Singapore)
Qualifying non-resident non-individuals will also receive a 10% concessionary tax rate on such REIT ETFs distributions.
Shekhar Jaiswal, RHB Bank analyst comments, “This much lobbied move is positive for REIT sector growth and ought to strengthen Singapore’s status as an emerging REIT hub.”
Jaiswal anticipates more REIT ETF-based products to hit the market in the near term as a result. “Ultimately, this will help widen the investor base for REITs,” he notes.
According to the Inland Revenue Authority of Singapore (IRAS), the tax concessions for REIT ETFs will be subject to a review on Mar 31, 2020.