On 19/06/2013,
you requested for the version in force on 19/06/2013
incorporating all amendments published on or before 19/06/2013.
The closest version currently available is that of 18/04/2013.
10J.
—(1) Where a company resident in Singapore purchases or otherwise acquires shares issued by it from any shareholder of the company (referred to in this section as a buyback), and such shares are deemed cancelled under section 76B of the Companies Act (Cap. 50), for the purposes of this section —
(a)
the buyback constitutes a market purchase if the purchase of the shares is made on a stock exchange; and
(b)
the buyback constitutes an off-market purchase if the purchase of the shares is made otherwise than on a stock exchange.
[32/99; 34/2005; 7/2007]
(2) Where a company undertakes a buyback described in subsection (1), any payment made by the company to any shareholder for the buyback shall, to the extent that the payment is made out of contributed capital of the company, not be regarded as a payment of dividend by the company to the shareholder, and an amount equal to the payment shall be debited to the contributed capital account kept by the company under section 10I(5)(c)(i).
[32/99]
(3) Where a company undertakes a buyback described in subsection (1), any payment made by the company to any shareholder for the buyback shall, to the extent that the payment is not made out of the contributed capital of the company, be deemed to be —
(a)
a dividend paid by the company on the date of the payment, and the provisions relating to payment of dividends under this Act and the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) shall apply, with the necessary modifications, to the dividend deemed to be paid;
(b)
a dividend received by the shareholder (not being a transferee to whom section 10N applies) where the buyback is an off-market purchase made in accordance with an equal access scheme authorised in advance by the company at a general meeting of the company.
[32/99; 37/2002]
(4) Notwithstanding subsection (3), where a company undertakes a buyback described in subsection (1)(a) through a special trading counter established on the Singapore Exchange, any payment made by the company to any shareholder for the buyback shall, to the extent that the payment is not made out of the contributed capital of the company, be deemed to be —
(a)
a dividend paid by the company on the date of the payment, and section 44 shall apply, with the necessary modifications, to such dividend; and
(b)
a dividend received by the shareholder if the conditions in subsection (5) are satisfied.
[24/2000]
(5) The conditions referred to in subsection (4)(b) are —
(a)
the shares sold through the special trading counter are not acquired by the shareholder through any securities lending or repurchase arrangement;
(b)
the shareholder has beneficially owned the shares for a continuous period of at least 183 days ending immediately before the day of the sale of the share through the special trading counter;
(c)
the shareholder has furnished to the Comptroller, or such other person as the Comptroller may direct, a declaration relating to the ownership and other particulars of the shares sold in such form and manner as may be approved by the Comptroller; and
(d)
the company has complied with such requirements as may be imposed by the Comptroller.
[24/2000]
(6) Where the dividend deemed to be paid by a company under subsection (3)(a) is a dividend to which section 44 applies, the amount of dividend so paid by the company and the amount of dividend deemed to be received by the shareholder under subsection (3)(b) shall be deemed to be of such a gross amount as after deduction of tax at the rate deductible at the date of payment would be equal to the amount of payment made by the company to the shareholder.
[32/99]
(7) The amount of any dividend deemed to be paid by a company under subsection (4)(a) shall be deemed to be of such a gross amount as after deduction of tax under section 44 at the rate deductible at the date of payment would be equal to the amount of payment made by the company.
[24/2000]
(8) The amount of any dividend deemed to be received by a shareholder under subsection (4)(b) shall be deemed to be of such a gross amount as after deduction of tax under section 44 at the rate deductible at the date of payment by the company would be equal to the amount of payment received by the shareholder.
[24/2000]
(9) Where any payment made by a company to any shareholder for a buyback is not deemed to be a dividend received by the shareholder under subsection (3)(b) or (4)(b), no set-off under section 46 shall be allowed to the shareholder in respect of the payment.
[32/99; 24/2000]
(10) Where a shareholder sells his shares to the company in an off-market purchase referred to in subsection (3)(b) —
(a)
no deduction shall be allowed to him in respect of the costs he incurred to acquire the shares he sold to the company; and
(b)
the cost of any remaining share in the company held by the shareholder immediately after the sale shall be ascertained by the formula
where A is the aggregate cost of all shares in the company held by the shareholder immediately preceding the buyback of his shares; and |
N is the number of remaining shares in the company held by the shareholder after the buyback of his shares. |
[32/99]
(11) Notwithstanding any other provisions of this Act, where a shareholder sells his shares through a special trading counter referred to in subsection (4) and any payment received by the shareholder for the buyback of such shares is deemed to be a dividend received by him under that subsection —
(a)
no deduction shall be allowed to him in respect of the costs incurred to acquire the shares sold; and
(b)
where any provision for the diminution in the value of such shares has been allowed as a deduction previously, the total amount of all such deductions not written back shall be deemed to be a trading receipt of the shareholder for the basis period in which the shares are sold.
[24/2000]
(12) For the purposes of this section —
(a)
the contributed capital of a company has the same meaning as in section 10I(5)(b);
(b)
where a company undertakes a buyback to which subsection (2) applies and the buyback is effected before any reduction of its share capital to which section 10I applies or any redemption of shares to which section 10K applies or any purchase or acquisition of shares or stocks of a preferential nature to which section 10M applies, section 10I(5)(c), (d) and (e) shall apply, with the necessary modifications, for the purpose of the buyback and any reference in that section to the first reduction shall be read as a reference to the buyback;
(c)
“equal access scheme” means a scheme which satisfies all the following conditions:
(i)
the offers under the scheme are to be made to every person who holds shares to purchase or acquire the same percentage of their shares;
(ii)
all the persons mentioned in sub-paragraph (i) have a reasonable opportunity to accept the offers made to them; and
(iii)
the terms of all the offers are the same except that there shall be disregarded —
(A)
differences in consideration attributable to the fact that the offers relate to shares with different accrued dividend entitlements;
(B)
differences in consideration attributable to the fact that the offers relate to shares with different amounts remaining unpaid; and
(C)
differences in the offers introduced solely to ensure that each shareholder is left with a whole number of shares;
(d)
in determining the duration of beneficial ownership of shares for the purposes of subsection (5)(b) —
(i)
the day of acquisition of the shares shall be counted as one day, but the day of sale of the shares shall be excluded;
(ii)
any bonus shares or shares arising from a consolidation or sub-division of shares shall be deemed to have been acquired on the date of acquisition of the original shares in respect of which the bonus shares were issued, or from which the consolidated or sub-divided shares were derived;
(iii)
the duration shall not be regarded as discontinued by the lending or sale of the shares under any securities lending or repurchase arrangement; and
(iv)
regard shall be had to such other matters as may be prescribed;
(e)
“shares” includes stocks but does not include shares or stocks of a preferential nature.
[32/99; 24/2000; 24/2001]