Distributions made by Real Estate Investment Trusts ("REITs") listed on the Singapore Exchange to individuals, whether foreign or local, are tax exempt except where such distribution is derived by the individuals through a partnership in Singapore or from the carrying on of a trade, business or profession.
In this respect, the Inland Revenue Authority of Singapore ("IRAS") has allowed Keppel REIT to make taxable income distributions to all individuals (excluding partnerships) at gross (i.e. without tax being deducted at source). Individuals who derive distributions through a partnership in Singapore or from the carrying on of a trade, business or profession are not eligible for this tax exemption, and are required to declare the distributions in their income tax returns, notwithstanding that gross distributions are made to them.
In addition, REITs' distributions to qualifying foreign non-individual Unitholders are entitled to a reduced rate of withholding tax deduction of 10% for distributions made during the period from 18 February 2005 to 31 March 20201 (both dates inclusive).
In instances where excess withholding tax2 has been deducted from Keppel REIT's distributions, eligible Unitholders may claim a refund of the tax over-deducted by IRAS through the Trustee and Manager of Keppel REIT. The procedures for this tax refund claim are set out below.
Which Unitholders are eligible for this tax refund?
Eligible Unitholders are:
Individuals holding Keppel REIT Units through a Depository Agent and have received distributions after withholding tax deduction at prevailing corporate tax rate instead of at gross;
Foreign non-individuals3 whose Keppel REIT Units are held through a Depository Agent or in their own name and have received distributions after withholding tax deduction at prevailing corporate tax rate instead of 10%. The 10% withholding tax rate is applicable only in respect of distributions made during the period from 28 August 2006 to 31 March 2020;
Exempt non-corporate Unitholders4 holding Keppel REIT Units in their own names or through Depository Agents.
For other categories of Unitholders, they will need to claim a refund of the withholding tax over-deducted, if any, when filing their tax return.
Please note that Keppel REIT's first distribution after listing was made on 28 August 2006.
How to make a claim?
(A) If you are a foreign non-individual or an exempt non-corporate Unitholder holding Keppel REIT Units in your own name,
- download and complete Form R1. Use a separate Form R1 for each income distribution period.
- submit the duly completed Form R1, accompanied by the Subsidiary Income Tax Certificate ("SITC") or the Account Statement/ Annual Dividend Statement ("ADS") issued by The Central Depository (Pte) Limited ("CDP") which reflects the distribution in respect of the claim for tax refund being made, to Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, Singapore Land Tower, #32-01, Singapore 048623.
(B) If you are an individual, a foreign non-individual or an exempt non-corporate Unitholder and you hold Keppel REIT Units through Depository Agents, please liaise with your Depository Agent on your claim for tax refund. The claim will be made on your behalf by your Depository Agent.
(C) If you are a Depository Agent and wish to make a claim on behalf of beneficial owners who are individuals, foreign non-individuals or exempt non-corporates,
- download and complete Form R2, including Annexes 1 to 3. Use a separate Form R2 for each income distribution period.
- submit the duly completed Form R2, accompanied by the Subsidiary Income Tax Certificate ("SITC") issued for the distribution in respect of the claim for tax refund being made, to Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, Singapore Land Tower, #32-01, Singapore 048623.
- Email a soft copy of the completed Annexes to Boardroom Corporate & Advisory Services Pte. Ltd. at the following email address: SRS.TeamE@boardroomlimited.com.
When do we submit Form R1 or R2?
You may submit the Forms and the accompanying SITCs or CDP Account Statement/ ADS to Boardroom Corporate & Advisory Services Pte. Ltd. at any time.
The Trustee of Keppel REIT will collate the claims for tax refund submitted by Unitholders and the Depository Agents, and upon receipt of the complete set of documents, make a claim for tax refund to the IRAS on a half-yearly basis (in June and December). For example, all Forms received during the period ending 31 December 2018 are expected to be submitted to the IRAS in January/ February 2019. Please use a separate form for each income distribution period.
However, the Trustee reserves the right to end the half yearly tax refund process if it is deemed to be no longer necessary (e.g. change in legislation) with advance notice.
Is there a time limit for the tax refund?
Every claim for tax refund must be made to the IRAS within 4 years from the end of the year of assessment to which the claim relates. For example, for the claim of tax refund in respect of distribution made by Keppel REIT for the period from 1 January 2016 to 31 March 2016 (which relates to the Year of Assessment 2017), the claim must be submitted to the IRAS on or before 31 December 2021. Unitholders and the Depository Agents must ensure that the relevant Forms are submitted on time to allow the Trustee of Keppel REIT to make the claim for tax refund within the prescribed time limit. For refund which will be time-barred during the year, please ensure the Forms R1 and R2 are received by the Trustee by June of that same year. The IRAS will not process any claim that has exceeded the 4 years time frame.
When will we receive the tax refund?
The tax refund will be paid out to eligible Unitholders/ Depository Agents, subject to approval by IRAS and upon receipt of the tax refund from IRAS by the Trustee of Keppel REIT. For Depository Agents, you can then proceed to make tax refunds to your respective beneficial owners.
The unit registrar will issue a letter for the refund, which will serve as evidence that the tax refund has been made.
1 Or which other date as may be applicable should the duration of the tax concession mentioned herein (i.e. the reduced rate of tax deduction) be subsequently extended.
2 For reference, the prevailing corporate tax rate is currently 17%.
3 A foreign non-individual is one who is not a resident in Singapore for income tax purposes and:
(i) who does not have any permanent establishment in Singapore; or
(ii) who carries on any operation in Singapore through a permanent establishment in Singapore, where the funds used to acquire the units in the REIT are not obtained from that operation.
4 An exempt non-corporate unitholder includes:
(i) a charity registered under the Charities Act (Cap. 37) or established by any written law;
(ii) a town council;
(iii) a statutory board;
(iv) a co-operative society registered under the Co-operative Societies Act (Cap. 62);
(v) a trade union registered under the Trade Unions Act (Cap. 333);
(vi) an International Organisation that is exempt from tax on such distributions by reason of an order made under the International Organisations (Immunities and Privileges) Act (Cap. 145); or
(vii) a real estate investment trust exchange-traded fund which has been accorded the tax transparency treatment.