Tax Bulletin

Deciphering deductions for borrowing costs

The Income Tax Board of Review held that facility fees paid by the taxpayer in GBG v The Comptroller of Income Tax [2016] SGITBR 2 were not deductible on the grounds that they were capital in nature. The taxpayer did not seek a deduction under section 14(1)(a)(ii) of the Income Tax Act as there was no drawdown on the facilities and hence, no monies borrowed.

Roundup of Singapore’s 2016 BEPS Developments and what these mean for enforcement efforts beyond?

2016 marked several major developments in the Singapore’s tax landscape arising from the Organisation for Economic Co-operation and Development’s (“OECD”) Base Erosion and Profit Shifting (“BEPS”) Project. Aligning with international tax practices aside, these developments also show Singapore’s resolve in protecting its tax base in the face of an increasingly volatile international tax environment. These developments will have a significant impact on your business operations if you are an MNE Group which engages in cross-border transactions.

We recapitulate below the key developments in Singapore for the past year. This should give a flavor of the Inland Revenue Authority of Singapore’s (“IRAS”) enforcement efforts moving forward.