The Inland Revenue Authority of Singapore (IRAS) has, on 11 July 2016, issued a guidance by way of an e-Tax Guide on the application of the Anti-Avoidance Application, section 33 of the Income Tax Act.
The Guide sets out the IRAS’s approach to the interpretation and application of the General Anti-avoidance Rules (GAAR) and provides some examples of arrangements, which in its view, have the purpose or effect of tax avoidance. The Guide also clarifies what the GAAR does not target, namely, the tax consequences of genuine commercial transactions.
To-date, there are two income tax cases dealing with the application of this section – Comptroller of Income Tax v AQQ and another appeal (AQQ) and GBF v The Comptroller of Income Tax (GBF).
The guidelines and accompanying examples in the guide are not meant to be exhaustive. The guide may be updated with new guidelines and new examples of arrangements where necessary.