Singapore Release General Anti-Avoidance Rule Guide

The Inland Revenue Authority of Singapore has issued an e-Tax Guide on the territory’s general anti-avoidance rule in Section 33 of the Income Tax Act.

The guide, issued on July 11, 2016, explains the three tests to determine whether the GAAR should apply. It includes examples on actionable avoidance arrangements, namely: the circular flow or round-tripping of funds; the creation of more than one entity for the sole purpose of obtaining a tax advantage; changes to the form of business entity for the sole purpose of obtaining a tax advantage; and the attribution of income that is not aligned with economic reality.

The IRAS clarified that the guidelines and accompanying examples in the guide are not meant to be exhaustive and that arrangements not described in the guide should not be taken as falling outside the ambit of Section 33 of the ITA, or as acceptable to the tax authority.