NikkoAM-StraitsTrading
Asia ex Japan REIT ETF

The Manager has established an arrangement with the Inland Revenue Authority of Singapore ("IRAS") to allow eligible NikkoAM-StraitsTrading Asia ex Japan REIT ETF (“AXJREIT ETF”) unitholders to use the back-end tax refund procedures to claim for over-deducted tax on income distributions from the AXJREIT ETF.

Background

Individuals, whether foreign or local, are exempt from tax for distributions made by REITs listed on the Singapore Exchange (“S-REITs”). As such, the portion of distributions made by the AXJREIT ETF that is derived from distributions from S-REITs to the AXJREIT ETF will be tax exempt for individuals holding units of the AXJREIT ETF. Note that individuals who derived the distributions from the carrying on of a trade, business or profession or from a partnership in Singapore are not eligible for this tax exemption and are required to declare the distributions in their income tax returns.

Similarly, qualifying foreign non-individual investors and qualifying foreign funds holding units of the AXJREIT ETF are subject to a reduced rate of tax of 10% for the portion of distributions made by the AXJREIT ETF that is derived from distributions from S-REITs to the AXJREIT ETF.

Accordingly, the Manager of the AXJREIT ETF will determine the income distribution amount to each category of unitholders taking into account the aforementioned tax exemption or reduction.

The aforementioned tax exemption or reduction will take effect from 1 July 2018 to 31 December 2025 (both dates inclusive) (for foreign non-individual investors) and 1 July 2019 to 31 December 2025 (both dates inclusive) (for foreign funds).

In the event where tax has been over-deducted for distributions made to Eligible Unitholders through the AXJREIT ETF, Eligible Unitholders may claim a back-end tax refund.

Unitholders eligible for Tax Refund

Eligible Unitholders are:

1. Foreign Non-individuals holding units in their own name or through Depository Agents; or

2. Foreign funds holding units in their own name or through Depository Agents;

3. Individuals holding units through Depository Agents; or

4. Exempt Non-Corporate Unitholder:
a) A charity registered under the Charities Act (Cap. 37) or established by any written law; or
b) A town council; or
c) A statutory board; or
d) A co-operative society registered under the Co-operative Societies Act (Cap. 62); or
e) A trade union registered under the Trade Unions Act (Cap. 333); or
f) 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)

Definition of Foreign Non-individual

A foreign non-individual investor is a person (other than an individual) who is not a resident of Singapore* for income tax purposes and:
• who does not have a permanent establishment** in Singapore; or
• who carries on any operation in Singapore through a permanent establishment** in Singapore, where the funds used to acquire AXJREIT ETF units are not obtained from that operation.

Definition of Foreign Fund

A foreign fund^# is one who qualifies for tax exemption under section 13CA, 13X or 13Y of the Income Tax Act, who is not a resident of Singapore* for income tax purposes and;
• who does not have a permanent establishment** in Singapore (other than a fund manager in Singapore); or
• who carries on any operation in Singapore through a permanent establishment** in Singapore (other than a fund manager in Singapore), where the funds used to acquire the units in AXJREIT are not obtained from that operation.

*A company is not a tax resident in Singapore if the management and control of its business is exercised outside Singapore during the respective calendar year in which the distribution was made and there is no intention to change the management and control of its business to Singapore.
**A permanent establishment is defined under the Singapore Income Tax Act as a fixed place where a business is wholly or partly carried on including a place of management, a branch, an office, a factory, a warehouse, a workshop, a farm or plantation, a mine, oil well, quarry or other place of extraction of natural resources, a building or work site or a construction, installation or assembly project. A unitholder shall be deemed to have a permanent establishment in Singapore if it:
• carries on supervisory activities in connection with a building or work site or a construction, installation or assembly project; or
• has another person acting on the unitholder's behalf in Singapore who:
 - has and habitually exercises an authority to conclude contracts;
 - maintains stock of goods or merchandise for the purpose of delivery on its behalf; or
 - habitually secures orders wholly and almost wholly for the unitholder or for such enterprises as are controlled by the unitholder.
#A foreign fund refers to a fund being a non-resident company, a partnership where all partners are non-residents, a trust administered by a non-resident trustee, or a non-resident entity.

How to make a claim
To make a claim for refund, download the following documents and submit to Tricor Barbinder Share Registration Services at 80 Robinson Road #11-02, Singapore 068898:
1. Form R1(click to download)

For Foreign Non-individuals or Exempt Non-Corporate Unitholders holding units in own name. Complete and submit Form R1, together with Subsidiary Income Tax Certificate ("SITC") or the Annual Dividend Statement ("ADS") issued by the Central Depository (Pte) Ltd (“CDP”) for the distribution in respect of which the refund is claimed. Please use a separate Form R1 for each income distribution period.

2. Form R2(click to download)

For Depository Agents for the benefit of Individuals, Foreign Non-individuals and Exempt Non-Corporate Unitholders holding units through Depository Agent. Particulars of beneficiaries on whose behalf the claim is made must be furnished in the appropriate annexes 1, 2 or 3 to Form R2 and accompanied with Subsidiary Income Tax Certificate ("SITC") issued for the distribution in respect of which the refund is claimed. Please use a separate Form R2 for each income distribution period.

3. For Individuals, Foreign Non-individuals or an Exempt Non-Corporate Unitholders holding Units through Depository Agents, please liaise with your respective Depository Agent on your claim for the tax refund. The claim will be made on your behalf by your Depository Agent.

When to submit claim

Form R1 and/or Form R2 and accompanying SITC or ADS may be submitted any time to Tricor Barbinder Share Registration Services.

The Trustee and the Manager will collate and file a claim for refund to the IRAS on a half-yearly basis (Submission deadline is 30 June and 31 December). For example, all Forms received during the period ending 30 June 2019 will be submitted to IRAS sometime in July/August 2019.

The tax refund will be paid out to eligible investors upon receipt of the tax refund from the IRAS by the Trustee.

Time limit for claim of refund

Every claim of 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 claim of refund in respect of distributions made for the period from 1 August 2018 to 31 October 2018, for which distribution payment is some time in February 2019 (which relates to the year of assessment 2020), the claim must be submitted to the IRAS on or before 31 December 2024.