Tax Newsbites - Archive

A monthly publication which shares bite-sized information and updates from Singapore and around the region

Previous issues

1 December 2016 to 13 January 2017

Some of the updates in this issue include:

  • Singapore and India have concluded a protocol to amend the tax treaty.
  • The Income Tax (Amendment No. 3) Act 2016 was published on 29 December 2016.
  • The Inland Revenue Authority of Singapore (IRAS) issued a revised circular on "Transfer Pricing Guidelines (Fourth edition)", which included a safe harbour margin which taxpayers can apply to each related party loan not exceeding S$15 million.
  • The Indonesian Minister of Finance issued regulations on new Transfer Pricing Documentation requirements effective since 30 December 2016.
  • Malaysia's Income Tax Act has been amended to add country-by-country reporting rules, effective from 1 January 2017.

1 September 2016 to 30 November 2016

Some of the updates in this issue include:

  • The Income Tax (Amendment No. 3) Bill 2016 was published on 10 October 2016.
  • The Inland Revenue Authority of Singapore (IRAS) has entered into agreements on the automatic exchange of information with various countries including Australia, Italy, Japan and Norway.
  • The IRAS issued implementation guidance on Country-by-Country Reporting (CbCR).
  • A new requirement for companies to report their related party transactions with effect from Year of Assessment 2018 will be introduced.
  • The Income Tax Board of Review dismissed a claim for deduction of standby credit and facility fees on the basis that they were capital expenditure.
  • Australia's High Court held that four offshore companies were actually controlled by the Australian resident accountant and therefore are subject to Australian income tax.
  • The results of the US 2016 elections for control of the White House and Congress may provide opportunities for major tax law changes in 2017.

16 July 2016 to 31 August 2016

Some of the updates in this issue include:

  • The Inland Revenue Authority of Singapore (IRAS) provided a list of documents that may be submitted to substantiate that the underlying tax has been paid on the income out of which foreign sourced dividend is paid.
  • Australia: The Australian Tax Office has proposed a rating assessment scale for marketing and procurement hub arrangements.
  • India: The protocol to the India-Mauritius tax treaty entered into force on 19 July 2016.
  • Indonesia: The Indonesian Ministry of Finance issued regulations regarding the Tax Amnesty for taxpayers that indirectly hold assets through a Special Purpose Vehicle which is effective from 23 August 2016. The Indonesian Director General of Tax issued the implementing regulation of the Tax Amnesty Law on 29 August 2016.

1 June 2016 to 15 July 2016

Some of the updates in this issue include:

  • The Income Tax (Amendment No. 2) Act 2016 was gazetted on 4 July 2016.
  • Ministry of Finance (MOF) issued draft Income Tax (Amendment No. 3) Bill 2016 which contains the 2016 Budget proposals for consultation.
  • The IRAS issued a draft circular "Proposed Income Tax Treatment Arising from the Adoption of FRS 109 - Financial Instruments" for public consultation.
  • MOF announced that Singapore will commit to implement Country-by-Country Reporting for financial years beginning on or after 1 January 2017 for multinational enterprises whose ultimate parent entities are based in Singapore and whose group turnover exceed S$1,125 million.
  • MOF released guidelines on the new Business and IPC partnership scheme.
  • The revised France - Singapore tax treaty was gazetted and entered into force on 1 June 2016.
  • India: The Indian Central Board of Direct Taxes (CBDT) has established a working group to examine consequences arising from amendments to the Indian-Mauritius tax treaty.
  • Indonesia: The Tax Amnesty Law was passed by the Indonesian Parliament on 28 June 2016.
  • Philippines: The Philippine Bureau of Internal Revenue has issued a revenue memorandum order that sets out new procedures in claiming preferential tax treaty benefits.

15 April 2016 to 31 May 2016

Some of the updates in this issue include:

  • The Monetary Authority of Singapore announced concession on tax deduction of up to 200% for issuance costs attributable to retail bonds.
  • The Protocol to India's tax treaty with Mauritius has been signed, phasing out the exemption of Indian tax on gains on disposal of shares in Indian companies for Mauritius residents. As a result, a similar exemption in the Singapore-Indian Protocol will need to be renegotiated given this exemption is linked to the availability of exemption for Mauritius residents.
  • India: The Central Board of Direct Taxes issued an instruction providing that income from transfer of unlisted shares would be treated as ‘capital gains’ irrespective of period of holding.
  • India: The Pune bench of the Income-tax Appellate Tribunal held on facts that treaty benefits could not be denied to a Singapore tax resident company in respect of royalty and interest income if it was the beneficial owner, and the income had been remitted to Singapore.
  • Malaysia: The Inland Revenue Board of Malaysia released a public ruling explaining the rules for tax incentives for the venture capital industry.
  • UK: The UK Supreme Court ruled in favour of the HMRC in a tax avoidance case.

16 February 2016 to 15 April 2016

Some of the updates in this issue include:

  • The 2016 Budget Statement was delivered on 24 March 2016.
  • The Income Tax (Amendment) Act 2016 was published on 11 April 2016.
  • The Income Tax (Amendment No. 2) Bill 2016 was published on 14 April 2016.
  • Australia: Australia has introduced a new 10% final withholding tax on the disposal of certain taxable Australian property by foreign residents.
  • China: The final stage of the B2V Reform will be rolled out from 1 May 2016.
  • India and UK: Country-by-country reporting regulations were introduced in the UK Budget 2016 and the India Union Budget 2016.
  • US: The Internal Revenue Service and US Treasury proposed regulations that would treat debt instruments issued to related persons as equity in certain circumstances.

1 December 2015 to 15 February 2016

Some of the updates in this issue include:

  • The Income Tax (Amendment) Bill 2016, Income Tax (Exchange of Information Arrangement) Order 2016 and the Goods and Services Tax (Amendment) Bill 2016 were published in the Government Gazette website on 25 January 2016.
  • The Income Tax (Exchange of Information Arrangement) Order 2016 was issued on 21 January 2016 and comes into operation on 1 May 2016, giving effect to the Convention on Mutual Administrative Assistance in Tax Matters by declaring it to be an exchange of information arrangement under the Income Tax Act (along with reservations made by Singapore).
  • The Inland Revenue Authority of Singapore (IRAS) added a new FAQ to clarify that India's dividend distribution tax does not qualify for foreign tax credit.
  • Singapore's respective tax treaties with Luxembourg, Ecuador, San Marino and Seychelles were ratified and entered into force.
  • Australia: The Australian Taxation Office (ATO) issued guidelines that implement OECD standards for transfer pricing documentation and country-by-country reporting.
  • India: The Indian Authority for Advance Rulings (IAAR) in a ruling dated 11 January 2016, upheld application of the capital gains exemption under the India-Mauritius tax treaty to a transfer of shares of an Indian company from Mauritius to Singapore.
  • Malaysia: The Malaysian Inland Revenue Board (IRB) released two Public Rulings to clarify the tax rules for loan transactions between related persons, and to explain the tax treatment of a Malaysian-resident investment (real estate) holding company respectively.

November/December 2015

Some of the updates in this issue include:

  • PwC Singapore launched a paper that makes recommendations to reform Singapore's tax system.
  • The Ministry of Finance has accepted 31 of 70 consultation suggestions on the draft Income Tax (Amendment) Bill 2016.
  • The IRAS updated its website content to clarify that the Temporary Employment Credit is taxable.
  • Singapore-Russia DTA: Singapore and Russia signed a Protocol to amend the existing tax treaty.
  • Australia: The Australian Parliament approved the multinational tax anti-avoidance bill on 3 December 2015.
  • Taiwan: The legislature repealed a controversial capital gains tax on share trades by active investors before the tax ever entered into force.

September/October 2015

Some of the updates in this issue include:

  • IRAS issued a consultation paper on the income tax implications arising from the adoption of FRS 115. IRAS updated several webpages on Productivity and Innovation Credit (PIC).
  • IE Singapore has released circulars on its website on the International Growth Scheme (IGS) and Double Tax Deduction for Internationalisation (DTDi).
  • Australia: Multinational anti-avoidance legislation was introduced and would be effective on 1 January 2016 to tax certain non-residents as if they have a permanent establishment in Australia where certain conditions are satisfied.
  • China: The State Administration of Taxation (SAT) released a draft circular that covers transfer pricing and anti-avoidance measures as well as country-by-country reporting (CbCR) requirements.
  • Indonesia: The Minister of Finance introduced Debt to Equity Ratio for tax calculations purposes, applicable from fiscal year 2016.
  • Malaysia: Budget 2016 was announced on 23 October 2015.
  • International: The OECD released its final recommendations on the Base Erosion and Profit Shifting (BEPS) Action Plan.


August 2015

Some of the updates in this issue include:

  • The IRAS revised its website content to provide areas of focus for compliance and examples of specific compliance related mistakes and issues identified in its Compliance Focus Programmes.
  • The Australian Treasury released exposure draft legislation to implement new OECD standards on transfer pricing documentation.
  • China's State Administration of Taxation announced new tax measures to support the One Belt, One Road initiative.
  • The Indian government has enacted rules for FATCA reporting and notified that the due date for 2014 reporting is 31 August 2015.



July 2015

Some of the updates in this issue include:

  • The IRAS revised its circulars on "Income Tax & Stamp Duty: Mergers and Acquisitions Scheme".
  • The Hong Kong government extended profits tax exemption for offshore funds to private equity funds, with retrospective effect.
  • China's State Administration of Taxation issued a public notice (SAT Gong Gao [2015] No. 47) clarifying that with effect from 19 July 2015, the interest derived by an overseas branch of a Chinese bank from Chinese entities is not subject to withholding tax.
  • The New Zealand government released an issues paper seeking feedback on the new bright-line test on the sale of residential property.
  • The UK Budget, released on 8 July 2015, announced a tax rate cut and focused on tackling tax avoidance and aggressive tax planning.

May/June 2015

Some of the updates in this issue include:

  • Draft Income Tax (Amendment) Bill 2015 issued for public consultation.
  • IRAS updates on the deductibility of reinstatement costs, tax concessions for listed real estate investment trusts, simplification of deduction claims for rental expenses for individuals and tax rates for payments to non-resident individuals (including non-resident professionals).
  • GST Board of Review case of GAQ v Comptroller of Goods and Services Tax
  • Singapore and Thailand signed a new tax treaty (to be ratified).
  • Australia: The Australian Federal Budget for 2015/2016 was announced on 12 May 2015.
  • China: The State Administration of Taxation announced administrative rules on cost sharing agreements, and on capital gains tax deferral and special tax treatment on certain transfers of shares or other assets.
  • India: The Indian Central Board of Direct Taxes announced that it would stop issuing new minimum alternative tax (MAT) demands to foreign institutional investors.
  • Malaysia: The Malaysia tax authorities announced a tax amnesty programme.
  • Thailand: The Thai Cabinet approved the draft Transfer Pricing Act.
  • Switzerland: Swiss Supreme Court case concerning the application of the tax treaty concept of beneficial ownership to total return swaps.
  • US: US Treasury releases proposed revision to the US model income tax convention.
  • WTO: The World Customs Organisation issued a guide on the interaction between customs valuation and transfer pricing..

April/May 2015

Some of the updates in this issue include:

  • YA 2015 corporate tax filing forms are now available from the IRAS website.
  • The IRAS has extended the FATCA reporting data to 31 July 2015 for Reporting Year 2014 only.
  • China and Indonesia signed a memorandum of understanding regarding the interpretation of the interest article in the China-Indonesia tax treaty.
  • The Indian government sent tax notices to foreign institutional investors demanding Minimum Alternative Tax of 18.5% of book profits until financial year 2014/2015.
  • Malaysian Ministry of International Trade and Industry issued principal hub guidelines.



February/March 2015

Some of the updates in this issue include:

  • Singapore's Budget 2015 was announced on 23 February 2015.
  • The IRAS has updated its website to include new content on examples of abusive PIC schemes, as well as PIC claims for automation equipment.
  • China issued two public notices on overseas indirect equity transfers, and transfer pricing rules on services and royalty payments to overseas related parties.
  • Hong Kong's Budget 2015/2016 was announced on 25 February 2015.
  • India's Budget 2015 was announced on 28 February 2015.
  • The United Kingdom announced its 2015 Budget on 17 March 2015.



January 2015

Some updates in this issue include:

  • IRAS released the second edition of its transfer pricing guidelines, spelling out, among others, the need for preparation of contemporaneous documentation (and when exceptions may apply).
  • IRAS released the fourth edition of its circular on research and development tax measures, incorporating a new annex for the food and beverage industry.
  • Overseas tax updates and news