Gear up for the new section 10L of the Singapore Income Tax Act 1947

SINGAPORE has taken the bold step to enact section 10L in the Singapore Income Tax Act 1947, treating gains received in Singapore from the sale of foreign assets as income chargeable to tax. This will apply to gains from such sale that occurs on or after Jan 1, 2024 by entities that do not have adequate economic substance in Singapore. If foreign taxes are suffered on such gains, Singapore will grant a foreign tax credit claim to alleviate such foreign taxes suffered.

A foreign entity (that is, not incorporated, registered or established in Singapore) that is not operating in or from Singapore is not within the scope of section 10L.

Gains derived by individuals and gains derived from the sale of foreign assets (not being an intellectual property right) under the following circumstances are not subject to the provisions of section 10L: