• Service: Tax, International Tax
  • Type: Regulatory update
  • Date: 7/23/2014

Singapore - Special levy assessment is capital, not revenue 

July 23: Singapore’s High Court held that amounts assessed by a management corporation from its members, for the purpose of retro-fitting and upgrading common property, is “capital” in nature, and not “revenue.” BLP v. Comptroller of Income Tax [2014] SGHC 127

The High Court examined the purpose for which the funds were used.

In this case, a “special levy” assessment was collected for the sole purpose of financing a loan to finance the improvement project. The taxpayer treated the funds as capital, and not revenue. The tax authority, however, asserted that the special levy gave rise to revenue.

The High Court found that this special levy assessment was actually an advance of capital made by the members to the management corporation for the common purpose of carrying out the capital works project, and was therefore a capital receipt.

Read a July 2014 report(PDF 288KB) prepared by the KPMG member firm in Singapore: Tax Alert

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