Singapore REIT tax concessions extended until March 2020

Foreign-sourced income remains tax exempted.

Singapore’s REITS and stapled trusts averaged a total return of 3.8% YTD, following average total returns of 14.0% in 2014.

Singapore’s Budget 2015 extended REIT concessions for another five years through to the end of March 2020.

In an update by SGX, the specific renews as outlined by the Inland Revenue Authority of Singapore (IRAS) were as follows:

• The package of income tax concessions for REITs will be extended till 31 March 2020. With the extension, the tax exemption on qualifying foreign-sourced income will apply so long as the overseas property is acquired by the REIT or its wholly-owned Singapore tax resident subsidiary company on or before 31 March 2020. The concessionary income tax rate of 10% for non-tax-resident non-individual investors will also continue until 31 March 2020. 

• The existing GST concession for listed REITs will be extended till 31 Mar 2020. In addition, to facilitate fundraising by the REITs and Registered Business Trusts through Special Purpose Vehicles (SPVs), the GST concession will be enhanced to allow these trusts to claim GST on expenses incurred to set up SPVs that are used solely to raise funds for the trusts, and the SPVs do not hold qualifying assets of the trusts directly or indirectly. These REITs and Registered Business Trusts will also be allowed to claim GST on the business expenses of such SPVs. 

The stamp duty remission on transfer of Singapore assets has not been renewed. The stamp duty concessions were intended to enable the industry to acquire a critical mass of local assets, as a base from which the REITS can expand abroad. As this has been achieved, the concession will be allowed to lapse after 31 March 2015.