Speech by Senior Minister of State for Finance and Transport Mrs Josephine Teo on the Second Reading of the Stamp Duties (Amendment) Bill 2014, 8 Oct 2014

Date: 08 October 2014
Venue: Parliament
Speaker: Mrs Josephine Teo
 
Mdm Speaker, I beg to move, “That the Bill be now read a second time”.

2. The Stamp Duties (Amendment) Bill 2014 comprises three amendments. The first change concerns the implementation of the Seller’s Stamp Duty (SSD) for industrial properties, while the other two changes arose from our periodic review of the stamp duty system.

3. The draft Bill was released for public consultation in July this year. MOF did not receive any relevant feedback on the Bill. I will now explain the amendments.

STAMP DUTY CHANGES

4. Clause 2 grants an exemption from Seller’s Stamp Duty (SSD) for transfers of industrial properties arising from corporate restructuring. Such transfers comprise transfers of industrial properties due to restructuring or amalgamation of companies, conversion of an ordinary partnership or private company to a limited liability partnership and transfers of industrial properties between associated companies. The exemption is granted to minimise the impact of the Seller’s Stamp Duty on non-speculative business transactions. This change will take retrospective effect from 12 January 2013, the date when SSD on industrial properties was introduced.

CHANGES TO FACILITATE IRAS’ STAMP DUTY ADMINISTRATION

5. The other two amendments are a result of our periodic review of the stamp duty regime to improve tax administration and reduce tax compliance costs.

6. Stamp duty relief is provided for transfers of assets arising from business restructuring and mergers and acquisitions. Under current rules, if the stamp duty relief is subsequently withdrawn, interest on the stamp duty payable is charged from the date the document was executed.  This does not take into account the fact that a taxpayer would usually have paid the duty upon execution of documents, whereas any refund is paid out at a later date when the stamp duty relief is granted. Therefore, clauses 2 and 3 provide that interest be charged from the date that the stamp duty is refunded to the taxpayer, instead of the earlier date that the document is executed, as is currently practised.

7. Clauses 4, 5, 6 and 7 also give Commissioner of Stamp Duties the discretion to allow stamp duty refunds without requiring taxpayers to lodge a refund claim or surrender original instruments for cancellation of the stamp duty certificate. The removal of these two requirements will reduce taxpayers’ compliance costs.

8. Mdm Speaker, I beg to move.