Il court, il court

Il est passé par ici, il repassera par là

Quick summary of taxes issues for ETFs when being based in Singapore January 15, 2010

Filed under: Invest — ilcourtilcourt @ 18:24

If you are worried about taxes when investing in ETFs you should read the whole thread in sgfund. I found this summary post

via sgfunds.com :: View topic – How will the taxes, fees and expenses affect the ETF return?.

Withholding tax issues of broad base US equity ETF listed in US stock exchange
For board base US equity ETF listed in US stock exchange (such as VTI), the taxation is exactly the same as any US unit trust in Singapore. We do not pay a single cent more.
For ETF, the impact of withholding tax appear on your monthly statement. For DBS Vickers Online, dividend per share is 30% lower than the declared value. The difference is the withholding tax.
For unit trust, we also pay the same withholding tax. The fund automatically use our money to pay it. It is reflected in the annual report. Unfortunately, most people do not read annual report.
Conclusion: Invest

Withholding tax issues of Narrow base US equity ETF listed in US stock exchange
Narrow base US equity ETF include
1) All sector funds
2) Small Cap, Mid cap fund
3) Value fund
Possible extra taxation if there is a net capital gain due to high portfolio turnover.
Conclusion: Do not Invest

Withholding tax issues of non-US equity ETF listed in US stock exchange
For non-US equity ETF listed in US stock exchange (such as European VIPERs and EM VIPERs), there is a double taxation. For example, for European VIPERs, we pay tax to both US government and European government. For European unit trust in Singapore, we only pay tax to European governments.
Conclusion: Do not invest

Withholding tax issues of Bond ETF listed in US stock exchange
Bond ETF listed in US stock exchange ………………..30% tax on dividends payment
Non US investors holding individual US bond………..No tax
Bond unit trust in Singapore holding US bond……….No tax
Conclusion: Do not invest

Withholding tax issues of ETF listed in London Stock Exchange
The taxation is based on tax treaties signed by Ireland. Note it is Ireland not UK. Ireland government setup a very good system to ensure tax efficient of funds registered in Ireland. No tax issue here. We do not pay more tax but also do not pay less.
Conclusion: invest
Note: The commission fee for London Stock Exchange is rather high.

Withholding tax issues of iShare Singapore ETF listed on SGX
This is the most stupid ETF I ever seemed.
iShare Singapore ETF
Singapore tax…………….Yes, cannot remember the rate
US tax………………………Yes, 30%
[But] Singapore unit trust in Singapore, STI ETF and ABF Singapore Bond Index Fund ETF
Singapore tax…………….No
US tax………………………No
Conclusion: Do not invest in iShare Singapore ETF listed on SGX [buy STI ETF or ABF Bond Index Fund ETF]

via sgfunds.com :: View topic – How will the taxes, fees and expenses affect the ETF return?.

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