Tax Refund Procedures
Distributions made by Real Estate Investment Trusts ("REITs") listed on the Singapore Exchange to individuals, whether foreign or local, are tax exempt, except where such distributions are derived by the individual through a partnership in Singapore or from the carrying on of a trade, business or profession. In view of this, Singapore-listed REITs will make taxable income distributions to all individuals (excluding partnerships) at gross (i.e. without tax being deducted at source). Individuals who derive the distributions through a partnership or from the carrying on of a trade, business or profession are not eligible for such tax exemption and are required to declare the gross distributions made to them in their income tax returns.
It should also be noted that taxable income distributions by REITs to foreign non-individual investors will be, as a concession, taxed at a reduced tax rate of 10% for distributions made during the period 18 February 2005 to 31 March 2020(1) (both dates inclusive). A "foreign non-individual" refers to a person (other than an individual) who is not a resident of Singapore for income tax purposes and:
a.who does not have a permanent establishment in Singapore; or
b.who carries on any operation in Singapore through a permanent establishment in Singapore, where the funds used to acquire the units in the REIT are not obtained from that operation.
Given the above, there might be instances where excess tax was previously deducted from distributions made by Ascendas Hospitality Trust ("A-HTRUST"), a stapled group comprising Ascendas Hospitality Real Estate Investment Trust ("A-HREIT") and Ascendas Hospitality Business Trust ("A-HBT"), out of the taxable income of A-HREIT that is not taxed at the trustee level ("Taxable Income Distributions"). A-HTRUST has therefore implemented a back-end tax refund process to allow eligible stapled securityholders to claim for a refund of any excess tax deducted from such Taxable Income Distributions.
Note:(1) Or such other date as may be applicable should the duration of the tax concession mentioned herein (i.e. the reduced rate of tax deduction) be subsequently extended.
Who is eligible for this tax refund?
Eligible stapled securityholders are:
i. individuals holding stapled securities in A-HTRUST ("Stapled Securities") through a Depository Agent, where the Taxable Income Distribution is made by A-HTRUST on or after 20 December 2013 and tax has been deducted, except where such distribution is derived through a partnership in Singapore or from the carrying on of a trade, business or profession; or
ii.foreign non-individuals whose Stapled Securities are held through a Depository Agent, where the Taxable Income Distribution is made by A-HTRUST from 20 December 2013 to 31 March 2020(1) (both dates inclusive) and tax has been deducted at a rate higher than 10%; or
iii.foreign non-individuals holding Stapled Securities in their own name, where the Taxable Income Distribution is made by A-HTRUST from 20 December 2013 to 31 March 2020(1) (both dates inclusive) and tax has been deducted at a rate higher than 10%; or
iv.charities registered under the Charities Act (Cap. 37) or established by any written law, town councils, statutory boards, co-operative societies registered under the Co-operative Societies Act (Cap. 62) or trade unions registered under the Trade Unions Act (Cap. 333) holding Stapled Securities (collectively referred to as "exempt non-corporate stapled security holders"), where the Taxable Income Distribution is made by A-HTRUST on or after 20 December 2013 and tax has been deducted.
If your Stapled Securities are held through a Depository Agent, please approach your Depository Agent who will claim the refund on your behalf.
(1) Or such other date as may be applicable should the duration of the tax concession mentioned herein (i.e. the reduced rate of tax deduction) be subsequently extended.
How to make a claim?
A.If you are a foreign non-individual or an exempt non-corporate stapled securityholder holding Stapled Securities in your own name:
1.Download and complete Form R1. Please use a separate Form R1 for each distribution period.
2.Submit the duly completed Form R1, accompanied by the Subsidiary Income Tax Certificate ("SITC") or the Annual Dividend Statement ("ADS") issued by The Central Depository (Pte) Limited for the distribution in respect of which the claim for refund is made, to Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, Singapore Land Tower, #32-01, Singapore 048623.
B.If you are an individual, foreign non-individual or an exempt non-corporate stapled securityholder holding Stapled Securities through a Depository Agent, please liaise with your Depository Agent to make the claim on your behalf.
C.If you are a Depository Agent claiming a refund on behalf of beneficial stapled securityholders who are individuals, foreign non-individuals or exempt non-corporate stapled securityholders:
1.Download and complete Form R2, including the appropriate annexes (Annex 1, Annex 2 or Annex 3). Please use a separate Form R2 for each distribution period.
2.For the purpose of the declaration in the Form R2, please note that your declaration of the status of the beneficiary or beneficiaries of the Stapled Securities deposited in a particular sub-account (i.e. individuals / foreign non-individual investors / exempt non-corporate stapled securityholders) must be properly substantiated. Depository Agents must ensure that the appropriate documents to support the declaration are available. Where the Stapled Securities are held through more than one tier of nominees, please note that the confirmation must be from the ultimate beneficiary or beneficiaries. Please also ensure that you keep records of the amount of distributions made to each beneficiary as the Inland Revenue Authority of Singapore ("IRAS") may require such information.
3.Submit the duly completed Form R2, accompanied by the SITC issued for the distribution in respect of which the claim for refund is made, to Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, Singapore Land Tower, #32-01, Singapore 048623. In addition, please email a soft copy of the completed annexes to Boardroom Corporate & Advisory Services Pte. Ltd. at: SHS-SD.CA@boardroomlimited.com.
When to submit Form R1 or Form R2?
Applicants may submit the Form R1 or Form R2 and accompanying SITCs or ADSs at any time. The claims for refund will be collated on a half-yearly basis (by 15 May and 15 November each year) and filed with the IRAS by A-HTRUST on a half-yearly basis. For example, all claims received during the half-year ending 15 May 2015 will be compiled and submitted to the IRAS in June 2015.
What is the time limit to submit the claims?
Every claim for refund must be made to the IRAS within 4 years from the end of the year of assessment to which the claim relates. For example, for claiming of refund in respect of Taxable Income Distribution made by A-HTRUST for the period 10 June 2013 to 30 September 2013 (which relates to the year of assessment 2015), the claim for refund must be submitted to the IRAS on or before 31 December 2019. Stapled securityholders and Depository Agents must ensure that the relevant Forms are submitted on a timely basis to allow A-HTRUST to make the refund claims within the prescribed time limit. The IRAS will not process any claim that is out of time.
When will the tax refund be made to stapled securityholders?
The tax refund will be paid out to eligible stapled securityholders and Depository Agents after A-HTRUST receives the tax refund from the IRAS.