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Taxability of gains arising from the disposal of an asset – the presence of “an intention to trade”Featured

It is trite that income tax in Singapore is only chargeable on gains of an income nature, and not on gains of a capital nature. The question in every case is whether a gain is income or capital in nature. The paramount factor in determining whether a gain is of a capital or revenue nature is the objectively-determined intention of the taxpayer (i.e. whether he has an intention to trade) at the time of acquisition of the asset.

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Transfer Pricing Tax Avoidance
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Transfer Pricing as Tax Avoidance: Considering the interactive application of Sections 34D and 33

Transfer pricing and general anti-avoidance: two of the most feared weapons in the Revenue’s arsenal. Most scenarios on the tax planning spectrum may be addressed and countered by the Revenue’s exercise of either provision. But what of fact patterns which fall under the possible ambit of both provisions? How would the two interact? More pertinently, what are the considerations which a taxpayer should take into account when faced with the uncertain prospect of having to defend against either or both provision(s)?

This topic is a technical and narrow one on which there has been precious little guidance from either the courts or the Revenue. As such, the analysis must begin from first principles – the proper statutory interpretation of sections 34D and 33 of the Income Tax Act. A comparative analysis reveals there to be differences between the two provisions along the dimensions of intitation power, subject, trigger, analytic (i.e. the operative test), actions and exceptions (i.e. taxpayer’s defence). 

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interestdeduction
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Deduction of Interest Expenses – when is there a “direct link” between income and loan?

The issue of whether a taxpayer is entitled to tax deductions for the various expenses it incurs has long been a source of debate between taxpayers and the Comptroller of Income Tax. In particular, the deductibility of financing costs such as interest expenses has been the subject of dispute in several cases. We will explore the current position of the law in this area.

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