What is a stamp duty?
Prior to filing a transfer of shares with ACRA, stamp duty has to be paid to the Inland Revenue Authority of Singapore (IRAS).
How to calculate stamp duty?
Stamp duty is payable on the actual price or net asset value of the shares being transferred, whichever is higher. The stamp duty payable shall be 0.2% of the purchase price or the value of the shares. Stamp duty is rounded down to the nearest dollar, subject to a minimum duty of $1.
The value of the shares transferred is taken to be the net asset value (NAV) or the allotment price of the shares in the target company. Where there are different classes of shares (e.g. preference shares in the target company), the NAV will depend on the rights attached to the respective class of share.
A. Where the company has been incorporated for more than 18 months
For Stamp Duty purposes, the value of the shares transferred is the NAV of the target company. The NAV is computed based on the latest statement of accounts of the target company which should be dated within 24 months before the date of transfer.
Where the target company owns any property, the market value of the property as at the date of document should be used in place of the book value if the book value is not reflective of the market value.
B. Where the company has been incorporated for 18 months or less
For Stamp Duty purposes, the value of the shares transferred is the allotment price if the target company does not own any property.
Where the target company owns any property, management accounts have to be prepared to determine the NAV of the shares.
When to pay stamp duty?
You need to pay stamp duty:
(a) Within 14 days after signing the document if it is signed in Singapore; or
(b) Within 30 days after receiving the document in Singapore if the document is signed overseas
For electronic documents signed overseas, It will be treated as received in Singapore in any of the following scenarios:
(a) The electronic document is retrieved or accessed in Singapore;
(b) An electronic copy is stored on a device and brought into Singapore; or
(c) An electronic copy is stored on a computer in Singapore.
How much penalty will be imposed?
Delay in Payment Not Exceeding 3 Months
A penalty of $10 or an amount equal to the duty payable, whichever is greater, will be imposed for late payments not exceeding 3 months.
Delay in Payment Exceeding 3 Months
A penalty of $25 or 4 times of the duty payable, whichever is greater, will be imposed for late payments exceeding 3 months.