SINGAPORE Law and Practice Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore
While a tax ruling is not mandatory, parties may apply to the Comptroller of Income Tax (or GST) for an advance ruling in order to ascertain how a proposed arrangement will be treated for tax purposes. An advance ruling only applies to the applicant and the particular arrangement that is the subject of the ruling. The Comptroller is legally bound to apply the tax treatment detailed in the advance ruling to the person and the arrangement stated in the ruling for the duration of the period in which the ruling is valid. Generally, depending on the complexity of the matter, the Comptroller aims to provide a ruling within eight weeks. Where the ruling request is a complex one, the Comptroller will inform the applicant that additional time is required and provide a general timeframe within which the rul- ing will be issued. In exceptional circumstances, where the Comptroller agrees to the request for an express ruling, the ruling can be issued within six weeks. 6. Acquisitions of Public (Exchange-Listed) Technology Companies 6.1 Stakebuilding The Singapore Code on Takeovers and Merg- ers (the “Takeover Code”) is issued by the Mon- etary Authority of Singapore (MAS) and applies to takeovers of: • corporations and business trusts with a pri- mary listing in Singapore; • Singapore-incorporated companies or Singa- pore-registered business trusts with a primary listing overseas; • real estate investment trusts; and • unlisted public companies and unlisted reg- istered business trusts with (i) more than 50
shareholders or unit-holders and (ii) net tangi- ble assets (NTAs) of SGD5 million or more. In the context of an acquisition of a public com- pany to which the Takeover Code applies, a buy- er is not prohibited from building a stake in the target company prior to making an offer. How- ever, the buyer would generally be subject to substantial shareholder disclosure obligations, which require the substantial shareholder to disclose to the target company (in a prescribed form) when the following occur: • the shareholder becomes or ceases to be a substantial shareholder of the company (a “substantial shareholder” is a person who has an interest of at least 5% in the total voting shares in a target company); and • there is a change in the percentage level of interests in the voting shares of the target company. The substantial shareholder has to inform the target company within two business days of becoming aware of the change, and the target company will then disseminate the information through an announcement on the SGX. In terms of stakebuilding, the buyer need not state the purpose of the acquisition of its stake. However, where there are reasonable grounds to suspect that the buyer’s actions have contrib- uted in some way (whether through purchase of the target company’s shares or otherwise), the responsibility for making an announcement will normally rest with the buyer if, before the target company’s board is approached: • the target company is the subject of rumour or speculation about a possible offer; or
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