Singapore legislation
Section 23C
Section 23C
Instruments effecting certain arrangements regarded as conveyances chargeable with section 23 duties, etc.
(1)
Where —
an arrangement mentioned in subsection (3) has the effect of a person (X) beneficially owning equity interests, more equity interests or a higher percentage of equity interests in an entity (called in this section acquired equity interests), or a person (Y) beneficially owning no equity interest, less equity interests or a lower percentage of equity interests in an entity (called in this section disposed equity interests), or both; and
had the acquired equity interests been conveyed to X, or the disposed equity interests been conveyed by Y, or both (as the case may be), the conveyance would have been chargeable with duty A, duty B, duty C, duty D or ad valorem duty under Article 3(c) of the First Schedule, or one or more of these,then the arrangement is treated as a conveyance of equity interests to X or a conveyance of equity interests by Y, or from X to Y (as the case may be).
(2)
In the case mentioned in subsection (1), duty A, duty B, duty C, duty D or ad valorem duty under Article 3(c) of the First Schedule, or 2 or more of these (whichever is applicable), are chargeable on the following instrument as if it were such a conveyance:
any instrument that, in the Commissioner’s opinion, effects (whether directly or indirectly and whether wholly or partially) or is evidence of the arrangement; or
in the absence of any such instrument, a notice prescribed in the section 23 Order for the purposes of this paragraph.
(3)
The arrangements in subsection (1) are —
an acquisition by an entity of its equity interests;
an issue by an entity of equity interests;
a cancellation or redemption of equity interests in an entity;
the conversion of —
equity interests into instruments that are not equity interests;
instruments that are not equity interests into equity interests; or
equity interests from one class to another class;
the conversion of an entity to another type of entity;
a change of partners of a partnership, limited partnership or limited liability partnership;
an amalgamation of entities; and
any other arrangement that, in the Commissioner’s opinion, has as its purpose or one of its purposes the effect mentioned in subsection (1)(a).
(4)
Despite subsection (2), ad valorem duty under Article 3(c) of the First Schedule is not chargeable on an instrument under that subsection in relation to any arrangement to which section 31, 32A, 32C or 33 applies, if the instrument in relation to that arrangement is chargeable with the same duty by reason of that section.
(5)
If the Commissioner is of the opinion that the effect mentioned in subsection (1)(a) could not reasonably have been prevented by any person who is liable (if not for this subsection) to pay any duty chargeable under subsection (2), then that duty is not chargeable on the instrument, or the amount of that duty is reduced by the amount of the duty that the person is liable to pay.
(6)
Where —
an arrangement in subsection (7) results in an entity ceasing to be a PHE;
had the entity been a PHE at the time of the execution of a conveyance, transfer or assignment of equity interests in it, or of a contract or agreement for the sale of equity interests in it, that instrument would have been chargeable with duty A or duty B, or both (as the case may be); and
the arrangement takes place at any time within such period as may be prescribed by the section 23 Order before the time of execution of that instrument,then duty A or duty B, or both (as the case may be) are chargeable on that instrument as if it were a conveyance of equity interests in a PHE.
(7)
The arrangements in subsection (6) are —
a change in the composition of the tangible assets of an entity; and
any other arrangement that, in the Commissioner’s opinion, has as its purpose or one of its purposes the effect mentioned in subsection (6)(a).
(8)
If the Commissioner is of the opinion that the arrangement under subsection (6) was not (whether solely or partly) carried out for the purpose of avoiding the liability to pay that duty, then the instrument is not chargeable with that duty.
(9)
Sections 23, 23A and 23B also apply (with such modifications as may be prescribed in the section 23 Order) to any other instrument that, in the Commissioner’s opinion, effects (whether directly or indirectly and whether wholly or partially) or is evidence of any arrangement that the section 23 Order prescribes as an equivalent arrangement, as they apply to an instrument chargeable with duty under section 23.
(10)
The section 23 Order may prescribe, as an equivalent arrangement for the purposes of subsection (9), any arrangement the purpose or effect of which is to (directly or indirectly) —
alter the incidence of any duty which is payable or which would otherwise have been payable by any person under section 23;
relieve any person from any liability to pay such duty; or
reduce or avoid any liability imposed or which would otherwise have been imposed on any person by section 23.
(11)
In this section, “arrangement” means any scheme, trust, grant, covenant, agreement, disposition or transaction, whether or not it is or is part of a business or family dealing or is carried out for a bona fide commercial reason, and includes all steps by which it is carried into effect.
(12)
The section 23 Order may —
require a specified person to give notice in a specified form to the Commissioner of an arrangement to which subsection (1) applies;
treat the notice as an instrument for the purposes of subsection (2)(b);
provide that any contravention of a requirement under paragraph (a) shall be an offence punishable with a fine of up to 4 times the amount of ad valorem duty that is chargeable on the instrument; and
exempt specified arrangements from this section.