Page 2 - Listing a Real Estate Investment Trust in Singapore or China

P. 2

TAX TRANSPARENCY
A trustee of a REIT is taxed at the prevailing corporate tax rate on the REIT’s income. Where the
tax transparency treatment applies, the speciﬁed income that is distributed to the unitholders
will not be taxed in the hands of the trustee. To enjoy tax transparency treatment, an S-REIT will
be required to distribute at least 90% of its “speciﬁed income” in a ﬁnancial year.

Consequently, the trustee is taxed on the following incomes that do not qualify for tax
transparency treatment:
a. Speciﬁed income derived by the REIT but not distributed to the unitholders in the same year
in which the income is derived
b. Income other than the speciﬁed income including gains from the disposal of investments
such as immovable properties, shares, etc. that are determined by the Comptroller of
Income Tax (CIT) to be revenue gains chargeable to tax

WHAT IS “SPECIFIED INCOME” FOR A REIT?

(Sec 43(2A) and (b) of the Singapore Income Tax Act (SITA))
a. Rental income or income from the management or holding of immovable property but not
including gains from the disposal of immovable property
b. Income that is ancillary to the management or holding of immovable property but not
including gains from the disposal of immovable property
c. Income that is payable out of rental income or income from the management or holding of
immovable property in Singapore, but not out of gains from the disposal of such immovable
property
d. Rental support payment that is paid to the trustee on or after 29 December 2016 by:
i. the seller who sold to the trustee the property or any interest in the owner of the
property;
ii. a person who wholly owns (directly or indirectly) the seller; or
iii. any other person approved by the CIT.
e. Distributions from an approved sub-trust of the REIT out income referred to in (a), (b)
and (c) above

CERTAIN DISTRIBUTIONS WHICH ARE TAX EXEMPTED
Distributions by an S-REIT from the following will be exempt from Singapore tax in the hands of
the investors (i.e. unitholders):
• Income taxed at the trustee level
• Capital gains

• Income originating from the holding of foreign properties, which is exempt under sections
13(8) [foreign-sourced dividends, branch proﬁts & service income] or 13(12) [please refer
to Appendix 1]
• Dividends from Singaporean companies

THE POWER OF BEING UNDERSTOOD
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