Tax newsbites PwC Singapore Tax Services

Tax newsbites
PwC Singapore
Tax Services
September 2014
Tax updates for the period
1 September 2014
to 30 September 2014
Tax updates

Approved research and development (R&D) cost sharing arrangements
The Economic Development Board (EDB) is giving companies which have been
awarded writing down allowances for approved R&D cost sharing
arrangements the option to continue claiming such allowances under section
19C of the Income Tax Act (ITA). The election must be made by 30 November
2014.

Transfer Pricing Documentation
The Inland Revenue Authority of Singapore (IRAS) issued proposed guidance
on transfer pricing documentation, including the requirement to maintain
contemporaneous documentation.
Details are available at:
http://www.iras.gov.sg/irashome/uploadedFiles/About_IRAS/Public_Consult
ation/pconsult_IT_Transfer%20Pricing%20Documentation_2014-09-01.pdf

Public consultation on proposed regulations relating to the US Foreign
Account Tax Compliance Act (FATCA)
The Ministry of Finance (MOF), Monetary Authority of Singapore (MAS) and
IRAS have sought feedback on the following documents which are intended to
help Singapore-based financial institutions comply with the FATCA:


Draft Income Tax (International Tax Compliance Agreements) (United
States of America) Regulations 2014, which sets out the due diligence and
reporting obligations of Singapore-based financial institutions in relation
to the FATCA IGA;
Draft FATCA e-Tax Guide, "Compliance Requirements of the Singapore-US
Intergovernmental Agreement on Foreign Account Tax Compliance Act ",
which provides further explanation of those obligations.
Details are available at:
http://www.iras.gov.sg/irasHome/page03a.aspx?id=15867

IRAS’s survey on Publishing Advance Rulings
On 8 September 2014, the IRAS published the results of the survey conducted
in February/March 2014. In order to protect the confidentiality of taxpayers’
identities and business arrangements, the IRAS will not be publishing advance
rulings, but will incorporate scenarios from certain advance rulings into the
relevant e-Tax Guides.
Details are available at:
http://www.iras.gov.sg/irasHome/page03a.aspx?id=15366#Survey_on_Publi
shing_of_Advance_Rulings

Productivity and Innovation Credit (PIC) Circular
On 19 September 2014, the IRAS issued the fourth edition of PIC circular. The
circular has been amended to reflect the extension of the scheme for another
three years, and to provide details of the PIC+ scheme meant for qualifying
small and medium sized enterprises (SMEs).
Other amendments include:
 Cash payout option - The qualifying period for determining if three local
employee condition has been met is extended from one to three months
with effect from the year of assessment (YA) 2016.
 Centralised hiring arrangements – individuals employed under this
arrangement are recognised as employees for PIC claim with effect from YA
2014.
 Introduction of measures to curb abuse of the PIC scheme.
Details are available at:
http://www.iras.gov.sg/irashome/uploadedfiles/eTax_Guide/etaxguides_CIT_PIC_2014_09_19.pdf

IT and Automation Equipment Qualifying for PIC (By Industry)
IRAS has updated its website to include new examples of IT and automation
equipment qualifying for PIC for the landscaping industry.
Details are available at:
http://www.iras.gov.sg/irasHome/page04.aspx?id=14372

Deduction for Statutory and Regulatory Expenses
IRAS issued a circular entitled “Deduction for Statutory and Regulatory
Expenses” on 12 September 2014. The circular explains the rationale and scope
of tax deduction for qualifying statutory and regulatory expenses incurred from
the basis period for YA 2014 onwards. It should be noted that the relevant
statutory has yet to be legislated.
Details are available at:
http://www.iras.gov.sg/irashome/uploadedfiles/eTax_Guide/etaxguides_CIT_deduction%20statutory%20exp_2014_09_12.pd
f
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
Tax Treatment of Directors’ Fees and Bonuses from Employment
On 12 September 2014, the IRAS issued the second edition of the circular “Tax
Treatment of Directors’ Fees and Bonus from Employment”. The circular has
been amended to clarify that a company may claim deduction for director’s fees
and employees’ bonuses only when its liability to pay such fees and bonuses
has arisen. It also provides that companies need not submit the documents/
information to IRAS until requested.
Details are available at:
http://www.iras.gov.sg/irashome/uploadedfiles/eTax_Guide/etaxguide_IIT_Tax%20Treatment_of_Director_Fees_and_Bonuses_fro
m_Employment_2014-09-12.pdf
International Agreements:

India-Singapore:
 PwC Singapore and PwC India have jointly submitted a paper to the
governments of Singapore and India to renegotiate the India-Singapore tax
treaty. The joint submission proposes including a clause to allow for
corresponding adjustment in one state should a transfer pricing adjustment
be made by its treaty partner in accordance with the arm’s length principle.
Overseas updates:

China:
 The State Administration of Taxation issued Shui Zong Han [2014] 317,
requiring the tax bureaus to examine the payments of dividends paid to
non-residents in the period between 2012 and 2013.

Hong Kong:
 On 11 September 2014, the Court of Appeal handed down its judgment in
Church Body of the Hong Kong Sheng Kung Hui & Hong Kong Sheng
Kung Hui Foundation v CIR, which dealt with whether profits derived by
the taxpayers from the sale of property are trading profits. A key issue
considered was whether there was a change of intention from holding the
land for investment purposes to trading.
Details are available at:
http://www.pwchk.com/home/eng/hktax_news_sep2014_11.html

International:
 On 16 September 2014, the OECD issued seven BEPS reports on the digital
economy, hybrid mismatches, treaty abuse, country-by-country reporting
and transfer pricing documentation, intangibles, harmful tax practices,
multi-lateral instruments.
Details are available at:
http://www.pwc.com/en_GX/gx/tax/newsletters/tax-policybulletin/assets/pwc-oecds-agreed-recommendation-beps-2014deliverables.pdf
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Contacts
If you would like to discuss any of the issues raised, please get in touch with your usual PwC
contact or any of the individuals listed here:
Name
Email
Telephone
[email protected]
+65 6236 3688
Sunil Agarwal
[email protected]
+65 6236 3798
Nicole Fung
[email protected]
+65 6236 3618
Abhijit Ghosh
[email protected]
+65 6236 3888
Mahip Gupta
[email protected]
+65 6236 3642
Lennon Lee
[email protected]
+65 6236 3728
Florence Loh
[email protected]
+65 6236 3368
Elaine Ng
[email protected]
+65 6236 3627
Shantini Ramachandra
[email protected]
+65 6236 3823
Alan Ross
[email protected]
+65 6236 7578
Ajay Sanganeria
[email protected]
+65 6236 3703
Tan Boon Foo
[email protected]
+65 6236 3632
Tan Ching Ne
[email protected]
+65 6236 3608
Tan Tay Lek
[email protected]
+65 6236 3768
Teo Wee Hwee
[email protected]
+65 6236 7618
Anuj Kagalwala
[email protected]
+65 6236 3822
Liam Collins
[email protected]
+65 6236 7248
Goh Chiew Mei
[email protected]
+65 6236 7222
Paul Lau
[email protected]
+65 6236 3733
Carrie Lim
[email protected]
+65 6236 3650
Lim Maan Huey
[email protected]
+65 6236 3702
Tan Hui Cheng
[email protected]
+65 6236 7557
Louisa Yeo
[email protected]
+65 6236 3759
Yip Yoke Har
[email protected]
+65 6236 3938
Andy Baik
[email protected]
+65 6236 7208
Chai Sui Fun
[email protected]
+65 6236 3758
Paul Cornelius
[email protected]
+65 6236 3718
Lim Hwee Seng
[email protected]
+65 6236 3118
Brad Slattery
[email protected]
+65 6236 7308
Falgun Thakkar
[email protected]
+65 6236 7254
Sarah Wong
[email protected]
+65 6236 3057
Tax Leader
Chris Woo
Corporate Tax Advisory Services
Financial Services
Global Structuring
Indirect Tax (Goods and Services Tax)
Koh Soo How
[email protected]
+65 6236 3600
James Clemence
[email protected]
+65 6236 3948
Margaret Duong
[email protected]
+65 6236 3958
Girish Vikas Naik
[email protected]
+65 6236 3915
Ooi Geok Eng
[email protected]
+65 6236 7205
International Assignment Services
Worldtrade Management Services (Customs and International Trade)
Frank Debets
[email protected]
+65 6236 7302
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