Shareholders of Emperador Inc. (“EMI”), whose shares are traded on the Singapore Exchange Securities Trading Limited (“SGX-ST”), must take note of critical developments regarding the collection and payment of stock transaction tax (“STT”) to the Philippines Bureau of Internal Revenue (“BIR”). A mandatory 0.6% STT on the gross selling price or gross value of EMI shares sold is now in play, and this could have important ramifications for both shareholders and trading activity.
Key Developments and What You Need to Know
- The 0.6% STT is a final tax that applies to the gross selling price or value in money of EMI shares sold. This tax is payable by the seller but is required to be withheld and remitted by the selling stockbroker to the BIR.
- Sellers must ensure compliance with this regulation, as failure to pay or remit the STT could result in legal and contractual breaches.
- Singapore brokers handling EMI trades have been tasked with collecting and remitting the STT on behalf of their clients (selling shareholders) at the time of trade settlement.
BDO Securities Corporation Appointed as Receiving Agent
BDO Securities Corporation (“BDO”) has been designated as the official receiving and remitting agent by EMI. Singapore brokers may choose to remit the collected STT to the BIR via BDO or through alternative mechanisms such as their affiliated brokers in the Philippines.
List of Onboarded Singapore Brokers
As of this announcement, the following Singapore brokers have been onboarded with BDO as the Receiving Agent:
- CGS-CIMB Securities (Singapore) Pte. Ltd.
- Citigroup Global Markets Singapore Securities Pte. Ltd.
- CLSA Singapore Pte Ltd
- Daiwa Capital Markets Singapore Limited
- DBS Vickers Securities (Singapore) Pte Ltd*
- iFAST Financial Pte Ltd
- Instinet Singapore Services Pte. Ltd.
- JP Morgan Securities Singapore Private Limited
- KGI Securities (Singapore) Pte. Ltd.
- Lim & Tan Securities Pte Ltd
- Macquarie Capital Securities (Singapore) Pte. Limited
- Maybank Securities Pte. Ltd
- OCBC Securities Pte Ltd
- Philip Securities Pte Ltd
- Tiger Brokers (Singapore) Pte Ltd
- UBS Securities Pte Ltd
- UOB Kay Hian Private Limited
*Note: DBS Vickers Securities (Singapore) Pte Ltd is currently not offering trading in EMI shares to retail clients.
Potential Trading Disruptions
In case a Singapore broker terminates its arrangement with BDO or if BDO ceases to act as the receiving agent, the broker must provide alternative methods for STT payment to comply with regulations. Failure to establish alternative mechanisms may result in the inability of shareholders to trade EMI shares through those brokers. This could affect trading volumes and potentially the share price of EMI on the SGX-ST.
Investor Advisory
Prospective and current shareholders of EMI are strongly advised to consult their financial and legal advisors regarding the tax and legal implications of holding or trading EMI shares. Additionally, shareholders should communicate with their respective Singapore brokers to understand the procedures and any associated fees related to STT collection and payment. For further details, refer to this link and EMI’s introductory document dated 20 June 2022.
