Singapore legislation
Clause 3
Clause 3
“Flow‑through entity”, “reverse hybrid entity” and meaning of fiscal transparency
(1)
In this Act, an entity is a “flow‑through entity” to the extent it is fiscally transparent with respect to any of its income, expenditure, profit or loss —
if it is established, formed, incorporated or registered under the laws of Singapore — under the ITA; or
if it is established, formed, incorporated or registered under the laws of a jurisdiction other than Singapore — under the law of that jurisdiction governing income tax or tax of a similar nature, but not if it is a tax resident of, and its income or profit is subject to a covered tax under the law of, another jurisdiction.
(2)
In this Act, a flow‑through entity is a “reverse hybrid entity” with respect to any of its income, expenditure, profit or loss attributable to its direct owner, if it is not fiscally transparent with respect to that income, expenditure, profit or loss under the law of the jurisdiction in which the owner is located.
(3)
In this Act, an entity is “fiscally transparent” under the law of a jurisdiction if that law treats the income, expenditure, profit or loss of that entity as if it were derived or incurred by the direct owner of that entity in proportion to that owner’s interest in that entity.
(4)
Any obligation, debt or liability in this Act of a flow‑through entity is that of —
in the case of a partnership or limited partnership —
for an obligation other than a debt or liability — the precedent partner (as defined in section 71(1) of the ITA);
for a debt or liability — the partners or limited partners (as the case may be) on a joint and several basis;
in the case of a limited liability partnership — the limited liability partnership; or
in the case of a trust — the trustee.