Taxable income distributions made by Real Estate Investment Trusts listed on the Singapore Exchange (“REITs”) to individuals, whether foreign or local, are tax exempt except where such distribution is derived by the individual 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”) allows REITs to make distributions on a gross basis (i.e. without tax deducted at source) to all individuals (excluding individuals who hold their units in the REITs through partnerships). Individuals who derived their distributions from the carrying on of a trade, business or profession are therefore not eligible for the aforesaid tax exemption and are required to declare the distributions in their income tax returns, notwithstanding that gross distributions are made to them.
In addition, taxable income distributions to certain qualifying unitholders (i.e. non-individuals) can also be made at gross (i.e. without tax deducted at source) and to qualifying foreign non-individual investors and qualifying non-resident funds are subject to a reduced rate of tax of 10% for distributions made on or before 31 December 2025.
In the event that tax has been wrongly deducted and accounted to the Comptroller of Income Tax (“CIT”), the CIT allows eligible unitholders to claim a refund of the tax over-deducted through the trustee of the REIT.
Eligible holders of stapled securities in CapitaLand Ascott Trust (“CLAS”) can therefore claim a tax refund from the CIT for tax that has been wrongly deducted from taxable income distributions of CapitaLand Ascott Real Estate Investment Trust (“CapitaLand Ascott REIT”) through the trustee of CapitaLand Ascott REIT. The procedures for this back-end tax refund claim are set out below.
Eligible stapled securityholders are: