Taxation
YOUR TAX Obligations
Unitholders of Prime US REIT (“Unitholders”) are subject to a maximum of 30% withholding tax on income derived from U.S. investments. Unitholders must comply with certain documentation requirements in accordance with the U.S. Internal Revenue Service (“IRS”) under the U.S. Internal Revenue Code of 1986, as amended (the “IRC”), There are, however, reduced rates and exemptions that may apply if the required documentation is provided. If documentation is not provided, US withholding tax will be applied at 30%.
Specifically, Unitholders who are not US persons must establish their status for the U.S. Foreign Account Tax Compliance Act (“FATCA”) purposes and their eligibility for exemption by providing an applicable IRS Form W-8 or such other certification or other information related to FATCA that is requested from time to time.
Unitholders must also provide updates of any changes to their status for FATCA purposes including information relating to their name, address, citizenship, personal identification number or tax identification number, tax residencies, and tax status. Such information may be disclosed or reported to the IRS, the Inland Revenue Authority of Singapore or other applicable tax or regulatory authorities for the purpose of compliance with FATCA. If Unitholders fail to provide or to update relevant information necessary for compliance with U.S. tax withholding requirements, including FATCA, or provide inaccurate, incomplete or false information, amounts payable by Prime US REIT to Unitholders may be subject to deduction or withholding in accordance with U.S. tax law and any intergovernmental agreements. Unitholders may receive reduced distributions if withholding is applied.
Boardroom Corporate & Advisory Services Pte. Ltd., the Unit Registrar of PRIME US REIT, will dispatch an Investor Pack, containing the relevant U.S. tax form, Currency Election Form and certification (if applicable), to each Unitholder that does not provide valid documentation on file prior to PRIME US REIT making any distributions to Unitholders. The relevant U.S. tax forms may also be downloaded from the sub-pages below or from the U.S. IRS website at http://www.irs.gov.
Overview of W-8BEN
- Applicable only for non-U.S. individual Unitholders. Other types of Non-US Unitholders, such as a corporation, must file the applicable Form W-8.
- Certifies the individual is the beneficial owner of the account, including the majority of individual unitholders in Singapore, who are not conducting any trade or business in the U.S..
- Remains in effect for a period starting on the date the Form W-8BEN is signed and ending on the last day of the third succeeding calendar year. For example, a Form W-8BEN signed on 31 December 2019 will remain valid through 31 December 2022.
- Unitholders must provide updates of any change to their status for FATCA purposes, including information relating to their name, address, citizenship, personal identification number or tax identification number, tax residences, and tax status.
Overview of W-9
- Applicable for U.S. Unitholders.
- U.S. Unitholders to provide Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) for reporting purposes.
- Does not expire unless individual has a change in circumstances.
- Unitholders that are the U.S. persons or that are entities disregarded as separate from a U.S. federal income tax purposes must provide a Form W-9.
- For further details on how to complete a Form W-9, please refer to the U.S. Internal Revenue Service website at https://www.irs.gov/pub/irs-pdf/iw9.pdf
Show sample of Form W-8BEN completion
CURRENCY ELECTION
Distributions will be declared in U.S. dollars. Unitholders will receive their distributions in Singapore dollars equivalent of the U.S. dollar distributions declared, unless they elect to receive the relevant distribution in U.S. dollars by submitting a “Distribution Election Notice” by the relevant cut-off date.
Save for approved depository agents (acting as nominees of their customers), Unitholders may elect to receive their entire distribution in Singapore dollars or U.S. dollars and shall not be able to elect to receive distributions in a combination of Singapore dollars and U.S. dollars.
RESTRICTION ON OWNERSHIP OF UNITS
Unitholders and all other persons are prohibited from directly or indirectly owning in excess of 9.8% of the outstanding Units (the “Unit Ownership Limit”), subject to any increase or waiver pursuant to the terms of the Trust Deed1 and on the recommendation of the Manager. This prohibition is intended to preserve the REIT status of the Parent U.S. REIT1 and facilitate the availability of the U.S. Portfolio Interest Exemption1.
The Trust Deed provides that Units held directly or indirectly by any person in excess of the Unit Ownership Limit will be automatically forfeited and held by the Trustee (“Automatic Forfeiture”). While forfeited Units are held by the Trustee, all rights attributable to those Units, such as the right to vote and the right to receive distributions, will be held by the Trustee; the Unitholder from whom the Units are forfeited shall have no right to vote or receive distributions arising from such Units.
The Trustee (on the recommendation of the Manager) will have the right and power to dispose of Units subject to Automatic Forfeiture, and upon such disposal the Unitholder from whom the Units are forfeited will receive the proceeds (net of any commissions and expenses) from the disposition, but not in excess of (a) the price paid by such Unitholder for the forfeited Units or (b) if such Unitholder did not give value for the forfeited Units in connection with the event causing the Units to be forfeited (e.g. in the case of a gift, a non-pro rata Unit buy-back, a non-pro rata Unit consolidation or other corporate action where no acquisition or transfer of Units by a Unitholder takes place but has the result of increasing a Unitholder’s proportionate unitholdings), the market price of the Units on the day of the event causing the Automatic Forfeiture, in each case less certain distributions received by the Unitholder. Any excess shall be donated by the Trustee to a charitable, philanthropic or benevolent organisation or purpose nominated by the Manager. If, prior to the discovery by the Trustee that Units are subject to Automatic Forfeiture, such Units are sold by the Unitholder, then such Units shall be deemed to have been sold on behalf of the Trustee and to the extent that such Unitholder received an amount in excess of the amount which it would otherwise have been entitled to. Any excess shall be paid to the Trustee upon demand to be donated to a charitable, philanthropic or benevolent organisation or purpose nominated by the Manager.
- As defined in the Prime US REIT Prospectus dated 8 July 2019
Upon completion of the forms, please mail to Unit Registrar at:
Unit Registrar
Boardroom Corporate & Advisory Services Pte. Ltd.
1 Harbourfront Avenue
Keppel Bay Tower #14-07
Singapore 098632
Or via email: srs.teamd@boardroomlimited.com
For more information, please refer to IRS Forms & Publications site at https://www.irs.gov/instructions/iw8bene/ or call us at +65 6951 8099 for further assistance.