Singapore: Taxation of gain on disposals of investments by insurers

Singapore: Taxation of gain, investments of insurers

The Inland Revenue Authority of Singapore issued guidance addressing the income tax treatment of gains derived from the disposal of investments of insurers.

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The guidance reflects the tax authority’s position concerning the tax treatment of investments held by insurers, reflecting a 2014 decision of the Singapore Court of Appeal. The guidance states that the tax authority will continue to treat the investments of insurers as their “revenue assets” and accordingly tax the gains realized on disposal of these investments as “trade income” (on the basis that the investment activities are an integral part of the insurance business of the insurer). Any investment income derived from the investments prior to disposal, such as dividends, interest, or rental, also would be taxable as “trade income.” 

The guidance states that the tax authority expects the bulk of insurers’ investments to be revenue in nature.

 

Read a November 2015 report [PDF 461 KB] prepared by the KPMG member firm in Singapore: Income Tax Treatment of Gains Derived from the Disposal of Investments of Insurers

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