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A public consultation exercise on the draft Stamp Duties
Amendment Bill 2004 was held from 15 July to 11 August
2004. The exercise was to obtain feedback on the draft
legislation which could facilitate compliance for taxpayers.
2. The draft Stamp Duties Amendment Bill 2004 introduces
amendments to the Stamp Duties Act relating to the imposition
of duty on Limited Liability Partnerships ("LLPs").
Some examples include:
| i. |
Exemption of stamp duty for
general partnerships reconstructing as LLPs; and |
| ii. |
Bringing within the scope
of stamp duty transfer of interest in LLP where
the LLP assets include immovable property or stock
or shares. |
3. The summary
table in Annex A lists all the tax changes and
explains the amendments to the Stamp Duties Act that
were proposed.
4. A total of 4 comments were received from 2 respondents,
both of whom are from professional bodies.
5. Amongst the comments received, three relate to the
drafting of the Amendment Bill while the last was a
request to review the treatment of stamp duty on acquisition
of additional interest in LLPs.
6. MOF has accepted all the comments. The comments
received and MOF's responses are furnished below:
Sections
31(1) (b) and 31(5)
Two comments suggested inserting the words "in Singapore"
in both sub-sections so that stamp duty would not
be imposed on the transfer of interest in LLPs,
if the LLP owns immovable property or stocks or
shares outside Singapore. The third feedback remarked
that the absence of these words would result in
the scope of the anti-avoidance measure being “wider
than what it was intended to combat as transfers
of foreign properties would also be caught”.
MOF’s response: Accepted.
This amendment makes it clear that LLPs (owning
such properties outside Singapore) will be relieved
from having to notify IRAS on transfers of interest
and to seek a subsequent remission, thus removing
unnecessary compliance costs. |
Professional
service firms like auditors, tax accountants and
lawyers may be interested to form LLPs to practise.
It is common for such firms to admit or retire partners
as well as to change the profit sharing ratio of
the firm regularly. The provisions as drafted would
consider these as a transfer of interest in the
LLP chargeable properties (e.g. immovable property
or stocks or shares), which are subject to stamp
duty. Imposing a stamp duty on such changes in the
LLP composition may discourage the usage of such
a vehicle for professional practices.
MOF's response: Accepted.
MOF will modify the policy to impose duty only where
there is an admission or exit of the partners in
the LLP. In addition, MOF is studying other options
to determine a partner's interest in the LLP's chargeable
properties that is more equitable to the partners.
Further details will be released by IRAS by December
2004. |
7. MOF thanks all who submitted comments. We will continue
the practice of consulting the public before finalising
legislation that come under our purview.
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