Focus on Singapore
Access our research and insights specific to Singaporean Businesses.
KPMG's Tax Alert examines and discusses the recent tax developments in Singapore and the implications thereof.
This is an appeal by the Chief Assessor to the Court of Appeal against the decision of the High Court. In that decision, the High Court had held that when assessing the annual value of a property under development, the Chief Assessor should take into consideration pre-sold units that were being developed on the land.
The Inland Revenue Authority of Singapore (IRAS) conducted a public consultation in April 2012 to seek feedback on the adoption of the rights-based approach to characterise payments for software and the use of or right to use information and digitised goods for taxation purposes.
During the Budget 2013 speech, the Deputy Prime Minister and Finance Minister announced changes to the PIC Scheme, primarily focusing on the productivity portion of the PIC value chain. There are a total of three enhancements, and in this Tax Alert we provide an overview of the changes, and the enhanced potential for businesses to claim the PIC Scheme Tax Incentive.
In this case before the Income Tax Board of Review (Board), the issue was whether a lump sum payment made by the taxpayer for the grant of a 3G Facilities Based Operator Licence and certain radio frequency spectrum for 3G mobile telecommunication services for a period of 20 years was tax deductible.
In an increasingly challenging economic environment, improvements in operational and tax efficiency and effectiveness can be an important driver of business value that companies need to focus on.
As the Government prepares its upcoming Budget, we hope it can consider broadening the scope of activities it considers “innovative” so as to put businesses on the path to greater innovation in products, services and processes.
As the Singapore Government prepares its annual budget, we hope it will consider new measures to support local enterprises' brand-building efforts.
In this case before the Income Tax Board of Review (Board), the taxpayer (Taxpayer) appealed against the disallowance by the Comptroller of Income Tax (CIT) of its claim for a deduction of the discount and redemption premium amounts in relation to its issuance of bonds. The Board considered the matter and agreed with the CIT.
The National Population and Talent Division of the Prime Minister's Office projects that the pool of working-age Singapore citizens will start shrinking by 2020. This means that the number of Singaporeans exiting the workforce will outnumber those entering it. Such a shrinking workforce translates into several potential problems for Singapore.
In this case, the taxpayer (AQQ) appealed against the judgment of the Income Tax Board of Review (Board).
In the upcoming Budget, we hope to see the introduction of measures that would kick-start a promising but sputtering sector: Islamic finance. The Budget 2013 presents an opportunity for Singapore to breathe life into this sector and remove impediments to progress for the local Islamic financing industry.
The Inland Revenue Authority of Singapore (IRAS) has recently issued further guidance on the tax treatment of insurance policies purchased by employers for their employees. The new rules may change the way employers treat insurance premiums and payouts when preparing the Form IR8A reporting of taxable remuneration.
As we approach the end of 2012, it is a good time to have a refresher of the tax reliefs available and consider some planning tips to reduce your personal tax for the Year of Assessment 2013 (i.e covering income earned in 2012)
In this case relating to property tax, the Singapore High Court held that in assessing the annual value of land under development, committed sales of units to be constructed on such land should be taken into consideration.
In this issue, we provide an update on the simplification of the deeming rule on gifts with effect from 1 October 2012.
With the recent initiatives by the Monetary Authority of Singapore, the Singapore Exchange and the Corporate Governance Council to update Singapore’s corporate governance code and the listing rules, it is timely to also focus on the importance of tax governance. In this Alert, we share with you basic considerations of tax governance and the recent focus by the IRAS on tax risk management framework.
On 3 of July 2012, the Inland Revenue Authority of Singapore released details on its website to clarify what is not considered eligible software Research and Development (R&D), and removed the previous exclusions that related to software development. In this Tax Alert we provide an overview of the changes, and the opportunities for businesses that are developing software to claim the R&D Tax Incentive.
In this recent case, the Income Tax Board of Review dismissed the argument put forward by the Comptroller of Income Tax that the Income Tax Act sets out a ‘mini-regime’ for insurance companies such that the sale of investments by an insurance company would automatically be liable to income tax.
In Budget 2012, the Minister for Finance announced that Singapore companies that meet certain conditions will be given tax certainty on gains derived from equity investments disposed of on or after 1 June 2012. The Inland Revenue Authority of Singapore issued a Tax Guide on 30 May 2012 to provide further details on this new tax measure.
In this Alert, we examine the impact this measure would have in providing tax certainty to corporate investors.
On 2 April 2012, the Inland Revenue Authority of Singapore (IRAS) announced the launch of the simplified form for small companies (Form C-S). Since then, the IRAS have disseminated information on Form C-S via seminars and its website. In this issue of Tax Alert, we give an overview of the filing requirements of Form C-S.
In this article, we discuss the issue whether additional buyer’s stamp duty (ABSD) should apply to differential premium and non-residential unit under construction in a mixed-use development (comprising both residential and non-residential units).
This alert is an expanded version of a contribution first published in the Business Times on 26 April 2012, “Clearing the ABSD confusion”.
In this case, the Income Tax Board of Review (the “Board”) ruled in favour of the Appellant (the “Appellant”). The Board held the view that the unabsorbed losses incurred by a previous branch office of the Appellant were those of the Appellant, and available for set-off against the Appellant’s future profits. This is provided there is no substantial change in the shareholders and their shareholdings in the Appellant.
In the recent Budget 2012, the Singapore Government has put forth changes to the existing research and development tax regime aimed at expanding the scope of the claims and facilitating the access to the benefits. In this issue of Tax alert, we give an overview of the changes and the possible impact to businesses in Singapore.
The Monetary Authority of Singapore (MAS) has recently released further details on the tax enhancements announced in Budget 2012 (MAS circulars numbered FDD Cir 01/2012 and FDD Cir 02/2012 both dated 21 February 2012). This issue of Tax Alert, we highlight the new information unveiled.
In the recent Budget 2012, the Minister for Finance announced an increase in the cash payout amount from $30,000 to $60,000. In the past, companies may have found the cash conversion option unattractive, but it may be high time to give it a serious thought with this generous increase. In this issue of Tax Alert, we examine a few scenarios where it may be more beneficial to cash out.
There have been a number of positive developments for the Singapore Aviation Leasing sector in the last 12 months, including the ratification of the Irish DTA and a number of refinements of the Singapore Aviation Leasing Scheme (ALS) both of which have attracted significant interest from the sector.
In our latest issue of Tax Alert, we discuss the enhancements to the ALS announced in Budget 2012 and other tax developments concerning the aviation sector.
In the recent Income Tax Board of Review (the “Board”) case of AVD v Comptroller of Income Tax, the taxpayer appealed against the decision of the Comptroller of Income Tax (the “Comptroller”) in refusing to grant a waiver from the “Shareholders’ Test” and to allow it to carry forward and utilise unabsorbed losses. The Board overruled the Comptroller’s decision. In this issue of Tax Alert, we discuss the Board’s decision and the possible implications on future applications for waiver from the “Shareholders’ Test” under Section 37(16) of the Income Tax Act.
In the recent case of AQP v Comptroller of Income Tax, the Singapore High Court dismissed an appeal made by AQP, a Singapore-incorporated company listed on the SGX Main Board, and held that the loss that AQP had sustained as a result of the acts of a fraudulent director with overriding powers in the company was not deductible under Section 14(1) of the Act. This Tax Alert analyses the decision and the impact that it has on the checks and balances that companies should have over the powers of management and senior level employees.
On 20 January 2012, the Indian Supreme Court overturned the Bombay High Court ruling in the Vodafone case covered in our Tax Alert issued in October 2010 (PDF, 1.8MB). In this landmark decision, the Supreme Court held that the Indian tax authorities did not have territorial jurisdiction to tax the gain arising from an offshore transaction that involved an indirect sale of shares in an Indian company.
In addition to the synopsis prepared by KPMG's member firm in India, a Vodcast discussing the judgement is also available.
The Inland Revenue Authority of Singapore recently issued guidance on the implementation of the additional buyer's stamp duty. This is payable on the purchase or acquisition of private residential properties. In this issue of Tax Alert, we give an overview of the new rules and the impact on property developers in Singapore.
As announced in Budget 2011, with effect from Year of Assessment 2012, tax deduction is now available to a company where a Special Purpose Vehicle uses the company's shares or its holding company's shares to fulfill its obligations under an EEBR. In this issue, we examine both the current and expanded scope of tax deduction available to companies that adopt EEBR schemes.
In a recent ruling applied for by a Singapore tax resident company, Tiong Woon Project & Construction Pte Ltd, the Indian Authority for Advance Rulings (AAR) held that the time period of independent installation and assembly projects in India cannot be aggregated in determining the constitution of a Permanent Establishment in India under Article 5(3) of India-Singapore tax treaty (tax treaty). In this Tax Alert, we examine the AAR’s decision and discuss the impact the ruling may have on the interpretation of the tax treaty from the Singapore perspective.
Recently, the Inland Revenue Authority of Singapore published a Tax Guide on the qualifying conditions for pension or provident funds to be approved under Section 5 of the SITA. In this issue of Tax Alert, we summarize the qualifying conditions and the compliance requirements for an approved pension or provident fund.
The Inland Revenue Authority of Singapore recently issued an e-Tax Guide setting out details of the Mergers and Acquisitions (M&A) scheme introduced in Budget 2010. The M&A scheme comprises the M&A allowance and stamp duty relief. In this issue of Tax Alert, we examine how the scheme works and the benefits that companies in Singapore can reap from the scheme.
This article explains how Asian countries, especially Singapore, are using their tax systems to encourage research and development (R&D) and pinpoints five steps taxpayers can take to benefit from the new regimes.
In the recent Income Tax Board of Review (Board) case of ATG v CIT, the taxpayer, ATG, appealed against the disallowance by the Comptroller of Income Tax of its claim for capital allowances on capital expenditure incurred for plant and machinery used by its sub-contractors in the manufacture of certain products that were sold to ATG. The Board was satisfied that there was sufficient connection between the capital expenditure incurred on the provision of the plant and machinery and ATG's trade and decided in favor of ATG. In this issue of Tax Alert, we examine the decision of the Board and the implications the case has on sub-contract arrangements.
In Budget 2011, the Minister for Finance announced the introduction of the foreign tax credit (FTC) pooling system, and the enhancement of the concession for enterprise development. The Inland Revenue Authority of Singapore recently issued guidance on how the new FTC pooling system and the enhanced concession for deduction of certain pre-commencement expenses work. In this issue of Tax Alert, we examine the mechanics of this new system and the enhanced concession.
The Singapore Government has in recent years expended much effort and attention towards the development and promotion of the Islamic financing industry in Singapore. In support of its strategy to broaden and deepen the local Islamic financing market, the Singapore Government has long recognized the importance of introducing appropriate tax incentives to support this growing pillar of the Singapore financial hub.
The Inland Revenue Authority of Singapore recently announced the alignment of tax treatment on rental income under an operating lease to the requirements of FRS 17 Leases. In this issue of Tax Alert, we examine this new FRS 17 tax treatment for operating lease income.
In the recent case of AQQ v CIT  SGITBR 1, the Comptroller of Income Tax invoked the general anti-avoidance provision, Section 33 of the Singapore Income Tax Act, on the financing arrangement entered into by the taxpayer, AQQ. The CIT was of the view that the financing arrangement was an artificial and contrived financing scheme structured to reduce or avoid tax liability. The Income Tax Board of Review (the Board) decided in favor of the CIT. In this issue of Tax Alert, we review the decision of the Board and the implications that the decision would have on the application of Section 33.
A new tax framework for qualifying corporate amalgamations, aimed at minimising the tax consequences arising from amalgamations, was announced in Budget 2009. Section 34C of the Income Tax Act was enacted in December 2009 to give legislative effect to this framework. The Income Tax (Amalgamation of Companies) Regulations 2011, which provides further rules relating to matters such as deductions, set-offs and incentives was gazetted on 23 March 2011. In this issue, we give an overview of the provisions of section 34C and some of the legislative changes in the Regulations.
The Monetary Authority of Singapore recently released further details surrounding the changes concerning tax incentives for project and infrastructure finance previously announced in Budget 2011. In this issue of Tax Alert, we examine these changes in greater detail.
The Exposure Draft ED/2010/9 Leases that was published by IASB and FASB has proposed a new standard on accounting for leases. The release of the exposure draft has since sparked extensive debates. Until the outcome of the impending meeting of the Boards to be held in May this year is known, the fate of the proposed accounting standard is yet to be sealed. In this issue of Tax Alert, we examine the possible tax impact of the proposed changes on the Maritime industry, being one of the affected major sectors.
The MAS, EDB, IE Singapore and DesignSingapore Council recently released further details on some of the tax changes and enhancements that were announced in Budget 2011. In this issue of Tax Alert, we examine the changes and enhancements in the light of this new information.
The Inland Revenue Authority of Singapore (IRAS) recently announced a voluntary compliance initiative, ACAP to encourage GST registered companies to deploy more robust GST accounting and reporting processes. In this issue of Tax Alert, we review the salient features of the programme and how a participating company may enjoy lower compliance costs and fewer tax audits.
In the recent Budget 2011, the Minister for Finance announced some significant enhancements to the Productivity and Innovation Credit (PIC) Scheme. In this issue of Tax Alert, we examine these enhancements to the original PIC scheme.
India's Minister for Finance, Mr Pranab Mukherjee presented the 2011 Union Budget amidst uncertainty around the Indian Government's ability to control the higher inflation and growing concerns about governance within the Government itself. In this issue of Tax Alert, we highlight the commitments made by the Indian Government to implementing tax reform initiatives as well as financial reforms.
The comprehensive avoidance of double taxation agreement (DTA) between Singapore and Ireland entered into force on 8 April 2011. From a Singapore tax perspective, the DTA became effective from 1 January 2011. In this issue of Tax Alert, we review the salient features of the DTA and provide our comments on the application of the DTA.
In this issue of Tax Alert, we highlight the clarification and revision to the withholding tax rates recently announced by the Inland Revenue Authority of Singapore (IRAS) for payments made to non-residents in relation to the charter of ships or aircraft.
In this Tax Alert, we highlight the key features of the Land Intensification Allowance incentive based on the guidelines released by the Inland Revenue Authority of Singapore and the Singapore Economic Development on 1 December 2010.
In this issue, we examine the case ZF v CIT  SGCA 48, where the Court of Appeal reversed the decision of the Income Tax Review Board and the High Court and held in favor of the appellant (ZF/taxpayer) that portable and demountable pre-fabricated dormitories are "plant" for the purpose of section 19 and 19A of the Income Tax Act.
Singapore has ratified the new Avoidance of Double Taxation Agreements with Georgia, Libya, Slovenia and the revised DTA with New Zealand. In this issue of Tax Alert, we bring you the highlights of the new and revised DTAs which came into effect on 1 January 2011.
KPMG believes that Budget 2011 will seek to position Singapore as the gateway to Asia in the new decade. In this issue of Tax Alert, we bring you KPMG's wishlist for Budget 2011.
The Thai government launched the Regional Operating Headquarters (ROH) Scheme in 2002 to attract multinational companies (MNCs) into setting up their regional operating headquarters in Thailand. To increase its competitive advantage, it has more recently introduced an enhanced ROH scheme. In this issue of Tax Alert, we highlight the new ROH scheme offered by Thailand and consider similar schemes in Singapore and Malaysia.
In this issue, we examine the case of ACC v CIT  SGHC 316, where the High Court granted a taxpayer a quashing order in relation to the decision of the Comptroller of Income Tax. The CIT has held the position that payments on interest rate swaps made by the taxpayer to its overseas subsidiaries should be subject to Singapore withholding tax.
In this issue, we provide update on recent changes to the Goods and Services Tax legislation which includes the issuance of Sukuk, Islamic debt securities, as exempt supplies. Some of these amendments arose from the changes in the GST treatment announced in the Singapore Budget 2010. They are expected to have a broad-reaching impact on Singapore businesses.
In this issue of Tax Alert, we review the scope of the new withholding tax exemption introduced by the Minister for Finance. The exemption was announced in a circular issued by the Monetary Authority of Singapore (MAS) and covers payments falling within the ambit of section 12(6) of the Income Tax Act that are made by relevant funds managed in Singapore by prescribed fund managers.
In this issue of Tax Alert, we examine the development of an Indian High Court ruling on the taxation of a cross-border merger and acquisition transaction involving an indirect sale of shares in an Indian company.
In this Tax Alert, KPMGTax Services reviews the development of withholding tax requirements for the payment of management fees to non-residents. This is in the light of the recent amendments to the Singapore Income Tax Act which took effect on 29 December 2009 and the new administrative concession announced by the Inland Revenue Authority of Singapore (IRAS) on 6 August 2010.
In this issue, we examine the implications of a recent case where a taxpayer successfully applied for leave to quash the decision of the Comptroller of Income Tax. CIT had held the position that under interest rate swap agreements, withholding tax should be applied to payments made to its overseas subsidiaries. In the second part of this Alert, we highlight the recent announcement by the CIT on the withholding tax waiver for partnerships with non-resident partners.
Area of Interest
This section is dedicated to special topics and interests.