News › Weekly Alert Article

Tax update: recent judgments in Singapore

Singapore

Tax is a global hot topic as of late, with many multinationals hitting the headlines. Goverments are starting to focus on getting their slice of the tax pie and providing more stringent measures for corporates in their jurisdiction. Taxand Singapore takes a look at recent judgments in national tax cases. 

AQQ v CIT [2012] SGHC 249

The High Court has handed down its decision on an appeal by AQQ, a Singapore company regarding the application of the general anti-avoidance provision. Whilst the High Court concluded that the financing arrangement fell within the anti-avoidance provision under section 33(1) of the Singapore Income Tax Act (Act), AQQ won the appeal on grounds that the Comptroller did not exercise his powers under section 33(1) fairly and reasonably. 
The parties have appealed to the Court of Appeal, Singapore's final court of appeal.

BFH v Comptroller of Income Tax (2013) MSTC 70-023 

BFH (Appellant) appealed to the High Court against the Income Tax Board of Review’s Board) decision which had characterised a lump sum payment of $100 million (3G Payment) as capital. In its decision, the Board had held that the 3G Payment made by the Appellant for a 3G Facilities-based Operator Licence (3G FBO Licence) and certain radio frequency spectrum for 3G mobile telecommunications services (3G Spectrum Rights) for a period of 20 years was capital in nature and not tax- deductible. 
On appeal, the High Court affirmed the Board’s decision and held that the 3G Payment was capital in nature.

Comptroller of Income Tax v BBO (2013) MSTC 70- 020

In this case, the Comptroller of Income Tax (Appellant) appealed to the High Court against the decision of the Income Tax Board of Review (Board). In that decision, the Board held that the gains arising from the disposal of shares that BBO (Respondent) held in 3 companies (Core Shares) were  not assessable to tax as they were capital in nature. 

On appeal, the High Court also held that the gains were capital in nature and not subject to corporate income tax.

FEOL v Comptroller of Income Tax (2013) MSTC 50- 011

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.

Discover more: Tax update - recent judgments in Singapore


Your Taxand contact for further queries is:
Kwong Wing Leon
T. +65 6238 3018
E. leonkwongwing@khattarwong.com

Also published in Thomson Reuters' Taxnet Pro, 15 November 2013

Taxand's Take

Multinationals with operations in Singapore should follow national corporate tax cases as they can be a good indicator of possible changes to tax legislation. 

Taxand's Take Author