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February 2024

“Wait… What?” Is Singapore Taxing Capital Gains?

By Sanjay V Iyer, CA (Scotland), Adv LLM, TEP, BSc (Hons)
Reading Time 8 mins

A. INTRODUCTION

A.1. To align the tax treatment of gains from the sale of foreign assets to the EU Code of Conduct Group guidance, which aims to address international tax avoidance risks, Singapore has enacted the new Section 10L of the Singapore Income Tax Act (“SITA”), in which gains from the sale of foreign assets that are received in Singapore by businesses without economic substance may be taxable in Singapore.

A.2. The change is in line with the global focus of anchoring substantive economic activities in the relevant jurisdiction.

B. SECTION 10L LAW — GENERAL RULE

B.1. From 1st January, 2024, based on the new Section 10L of the SITA, gains from the sale or disposal by an entity of a relevant group (“Relevant Entity”) of any movable or immovable property situated outside Singapore at the time of such sale or disposal or any rights or interest thereof (“Foreign Assets”) that are received in Singapore from outside Singapore are treated as income chargeable to tax under Section 10(1)(g) if:

a) the gains are not chargeable to tax under Section 10(1)1; or

b) the gains are exempt from tax.

Such gains are refer

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