Your Tax Obligations as a Unitholder of Keppel Pacific Oak US REIT
As a unitholder of Keppel Pacific Oak US REIT ("Unitholder"), you are required to provide certain documentation to the United States Internal Revenue Service ("IRS"). This is to allow the IRS to establish if you are eligible for exemption from US withholding tax under the United States Internal Revenue Code of 1986 as amended (the "IRC"), which includes the United States Foreign Account Tax Compliance Act ("FATCA"), on certain income derived by Keppel Pacific Oak US REIT from the United States ("US"), in which you are entitled to as a Unitholder.
While distributions to Unitholders are expected to be suspended through the 2H 2025 distribution that would otherwise be paid in 1H 2026, pursuant to the Recapitalisation Plan. Distributions may re-commence at an earlier date than planned if market conditions allow. During this period, Keppel Pacific Oak US REIT will still receive taxable interest income from its US subsidiaries. As such, Keppel Pacific Oak US REIT would have to bear the withholding tax based on the proportion of non-compliant Unitholders who fail to submit the US withholding forms and certificates. This would reduce the income retained and negatively affect KORE and its Unitholders. Accordingly, we strongly encourage all Unitholders to submit the relevant tax forms to reduce the withholding tax burden on Keppel Pacific Oak US REIT. Lastly, when the distributions re-commence, Unitholders with valid US tax forms will continue to be exempted from US withholding tax deduction.
If you do not provide the required documentation, the US withholding tax that will be applied to such income would be at the maximum tax rate, currently 30%, and the amount of distributions that you will receive from Keppel Pacific Oak US REIT may be reduced by the applicable amount of US withholding tax attributable to the income you are entitled to.
Specifically, Unitholders that are not US persons must establish their status for FATCA purposes and their eligibility for an exemption from US withholding tax on distributions from Keppel Pacific Oak US REIT attributable to certain interest receipts from the US by providing an applicable US IRS Form W-8 (or "US Tax Form") and other documentation or information that may be requested from time to time. For non-US Unitholders who are individuals and whose investment in units of Keppel Pacific Oak US REIT are not effectively connected with their conduct of a trade or business in the US, the applicable Form W-8 is an IRS Form W-8BEN. The IRS Form W-8BEN is only for individuals and will not be accepted if submitted by a non-individual, for example, from a corporation or any other type of entity.
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.
A Form W-8 will generally remain valid from the date signed until the last day of the third succeeding calendar year. For example, a form signed on 31 December 2017 will remain valid through 31 December 2020. All US Tax Forms cease to be valid upon any change in circumstance that renders a previously submitted US Tax Form inaccurate (in which case, a new US Tax Form will have to be submitted within 30 days).
If a Unitholder fails to provide or update relevant information necessary for compliance with US tax withholding requirements, including FATCA, or provide inaccurate, incomplete or false information or where a US Tax Form previously returned by that Unitholder ceases to remain valid, amounts payable by Keppel Pacific Oak US REIT to such Unitholder may be subject to deduction or withholding in accordance with US tax law and any intergovernmental agreements. Accordingly, the distributions receivable by such Unitholder may be reduced in these circumstances.
Boardroom Corporate & Advisory Services Pte. Ltd, the Unit Registrar of Keppel Pacific Oak US REIT, will dispatch US Tax Forms to each non-US Unitholder that does not have valid documentation on file prior to Keppel Pacific Oak US REIT making any distributions to Unitholders.
The relevant U.S. tax forms for Unitholders who are US persons/entities may be downloaded from the US Internal Revenue Service website at http://www.irs.gov
Unitholders who do not submit the required US IRS tax forms will be subject to US withholding tax on distributions payment when due to them and may not receive the full amount of their entitlement to distributions.
How to file for tax exemption:
Non-US Unitholders
Step 1: Fill up forms
For Individual Unitholder
A natural person whose investment in Units is not effectively connected with its conduct of a trade or business in the US.
For Entities Unitholders (Corporate)
An entity that is disregarded as separate from an entity that is not a foreign intermediary for US federal income tax purposes and for which its investment in the Units is not effectively connected with its conduct of a trade or business in the US.
For Depository Agents and Nominees
Acting as a foreign intermediary (that is, acting not for its own account, but for the account of others as an agent, nominee, or custodian).
Step 2
For assistance, please refer to sample form or contact us via email: enquiries@koreusreit.com or tel: +65 6803 1838 from 9.00am to 6.00pm, Monday to Friday, excluding public holidays.
Step 3
Submit forms to Unit Registrar before the time stipulated either by mailing it to the address below, or in soft copy to srs.teamE@boardroomlimited.com.
Unit Registrar
Boardroom Corporate & Advisory Services Pte. Ltd.
1 HabourFront Avenue
#14-07 Keppel Bay Tower
Singapore 098632
Restriction on Ownership of Units
The Trust Deed prohibits any Unitholder or other person from directly or indirectly owning in excess of the Unit Ownership Limit, being 9.8% of the outstanding Units, subject to any increase or waiver pursuant to the terms of the Trust Deed and on the recommendation of the Manager. The Trust Deed provides that Units held directly or indirectly by any person in excess of the Unit Ownership Limit will be subject to 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.
For the avoidance of doubt, the Automatic Forfeiture is effective automatically, whether or not the Trustee or the Manager is aware of the change in ownership or aware of the fact that the Unit Ownership Limit has been breached and without any requirement for notice by the Trustee or the Manager. Unitholders are advised to manage their interests in the Units so as not to breach the Unit Ownership Limit and trigger the Automatic Forfeiture.
Qualified Notice On Non-Applicability of US Withholding Tax Under Section 1446(f) and Section 1446(a) of United States Internal Revenue Code to Non-US Unitholders of KORE
Keppel Pacific Oak US REIT ("KORE") satisfied the requirements of the withholding tax exception because it was not engaged in a trade or business within the United States (US) at any time.
In relation to the final regulations released by the US Internal Revenue Service ("IRS") under Internal Revenue Code (the "Code") Section 1446(f) in 2020, no tax is required to be withheld from unitholders of KORE.
Section 1446(f) of the Code provides that if a non-US person transfers an interest in a partnership and if any portion of the gain on such transfer is effectively connected with the conduct of a U.S. trade or business, the transferee must withhold 10% of the amount realised upon the transfer or sale. Under the final regulations of Section 1446(f), brokers that effect a transfer of an interest in publicly traded partnership (“PTP”) on behalf of a non-US person and pay the amount realised to a non-US transferor that is their customer must generally withhold a tax equal to 10% of the amount realised. The applicability date of the new withholding tax is 1 January 2023.
KORE has issued a Qualified Notice to certify that KORE was not engaged in a trade or business within the US at any time during its taxable year through the “PTP designated date” within the meaning of the US withholding tax under the final regulations of Section 1446(f) of the US Internal Revenue Code of 1986, as amended.
Accordingly, and to reiterate, the Section 1446(f) Withholding Tax is not applicable to transfers by Unitholders. Additionally, brokers that effect a transfer of units in KORE are also not required to withhold the Section 1446(f) Withholding Tax. Unitholders should not be required to file a US federal income tax return or apply for a US tax identification number solely as a result of the Section 1446(f) Withholding Tax.
Additionally, Section 1446(a) of the Code provides that a non-US partner in a partnership, including a PTP, is subject to Section 1446 withholding tax on allocations of income effectively connected with a US trade or business. Further, the regulations of Section 1446(a) stipulate that a PTP that has effectively connected income gross income, gain or loss must pay withholding tax by withholding from distributions to a non-US partner. Additionally, nominees who hold an interest in a PTP must withhold, as appropriate, on distributions paid to any non-US persons (or to the accounts of any non-US persons) of which the nominee is treated as the withholding agent. A nominee that receives a qualified notice that meets the requirements of Treas. Reg. 1.1446-4(b)(4) must withhold on the amounts specified on the qualified notice.
KORE has issued qualified notices detailing the information necessary to appropriately withhold. As supported by the information detailed on the qualified notice, nominees should not be required to withhold under 1446(a) on distributions received from KORE, as no portion of the distributions payable are attributable to income that is effectively connected with a US trade or business.
In this regard, KORE will provide the qualified notices on its website indicating it is not engaged in a US trade or business.
  View Qualified Notices on Section 1446(a) |
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| Notice - September 2023 |
+ Download |
| Notice - March 2023 |
+ Download |
Distribution Currency
Distributions will be declared in US dollars. Each Unitholder will receive his distribution in Singapore dollars equivalent of the US dollar distribution declared unless they elect to receive the relevant distribution in US dollars by
- submitting a completed “Distribution Election Notice” to KORE’s Unit Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. (as indicated on the Distribution Election Notice) by the relevant cut-off date, AND
- opting out of CCY at least 3 business days before the payment date
Save for approved depository agents (acting as nominees of their customers), each Unitholder may elect to receive his entire distribution in Singapore dollars or US dollars and shall not be able to elect to receive distributions in a combination of Singapore dollars and US dollars.
CDP, the Manager, the Trustee or Keppel Pacific Oak US REIT shall not be liable for any loss arising from the conversion of distributions payable to Unitholders from US dollars into Singapore dollars.
Changes Previously Introduced by CDP
- CDP implements Currency Conversion Service (“CCY”)
Since 15 June 2020, CDP has implemented a CCY, which is a conversion and payment service that converts foreign currency cash distributions to Singapore Dollar (“SGD”) and credits them directly into the CDP Direct Unitholder’s active Direct Crediting Service (“DCS”) bank account. This service is automatically provided with no sign-up required and transaction fees waived. You also have the option to opt-out and opt-in any time via CDP Internet.
- CDP Goes Cheque-free
Since September 2020, CDP has stopped issuing USD cheques to CDP Direct Unitholders, unless on an exceptional basis. As such, CDP Direct Unitholders will only be able to receive distributions in USD via Telegraphic Transfer (“TT”) at a fee of S$35 (chargeable by CDP and subject to prevailing GST) on top of applicable bank charges for every TT transaction on a per request basis. Unitholders are encouraged to accumulate their USD cash distributions and request for a one-time TT to any designated bank account.
ACTIONS (IF ANY) REQUIRED BY UNITHOLDERS
- Unitholders who elect distributions in SGD
No action is required for CDP Direct Unitholder with an existing DCS. The CCY is automatically provided and you will receive your cash distributions directly into your designated SGD bank account by the third business day after the distribution payment date. The exchange rate and converted amount for each cash distribution can be viewed online via CDP Internet and Unitholders’ monthly CDP Account Statements.
- Actions required from CDP Direct Unitholders who elect distributions in USD
Unitholders who have elected to receive their distribution in USD are to:
- submit a completed “Distribution Election Notice” to KORE’s Unit Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. (as indicated on the Distribution Election Notice) by the relevant cut-off date, AND
- opt out of CCY at least 3 business days before the payment date if they have not done so before.
Please refer to https://www.sgx.com/securities/retail-investor/cdp-faqs or contact CDP for further information on how to opt out of the CCY to receive distributions in USD.
Neither CDP nor the Manager will be liable for any damages or losses suffered by Unitholders howsoever arising from the conversion of the Distribution payable to each CDP Direct Unitholder from USD into SGD.
For more information, please contact our unit registrar, Boardroom Corporate & Advisory Services Pte. Ltd. at 6536 5355 (Mondays to Fridays, except Public Holiday, 9am to 5pm) or email to srs.teamE@boardroomlimited.com
Contact Information
Unitholders who require assistance in completing the required forms can refer to the sample form or contact us via email: enquiries@koreusreit.com or tel: +65 6803 1838 from 9.00am to 6.00pm, Monday to Friday, excluding public holidays.
