Singapore legislation
Regulation 29
Regulation 29
Election for company in distress
Subregulation 1
This regulation applies to a constituent entity of an MNE group for a financial year where —
it is released from an obligation to pay a debt;
an amount of income is reflected in the FANIL of the constituent entity for that financial year in respect of the release;
the release —
is made pursuant to insolvency, bankruptcy or similar proceedings in the jurisdiction where it is located;
is made pursuant to an arrangement with a creditor who is not connected with the constituent entity, and the constituent entity has obtained an independent expert opinion that it will not be able to meet payments due within the next 12 months to persons who are not connected with it; or
is made in a case where sub‑paragraphs (i) and (ii) do not apply and by a creditor who is not connected with the constituent entity, and, at the time of the release, the liabilities of the constituent entity exceed the fair market value of the assets of the constituent entity; and
the filing entity of the MNE group makes an election in a GloBE information return (whether filed in Singapore or in another jurisdiction) in accordance with the GloBE rules that this regulation is to apply to the constituent entity for that financial year.
Subregulation 2
Where this regulation applies to a constituent entity, and paragraph (1)(c)(i) or (ii) applies, its FANIL must be adjusted to exclude —
any income recognised in respect of the release from an obligation to pay a debt made pursuant to an arrangement with a creditor who is not connected with the constituent entity; and
any income recognised in respect of the release from an obligation to pay a debt due to a creditor who is connected with the constituent entity, but only if the release is undertaken as part of the same arrangement as that in sub-paragraph (a).
Subregulation 3
Where this regulation applies to a constituent entity, and paragraph (1)(c)(iii) applies, its FANIL must be adjusted by deducting the lowest of —
the amount of income recognised in respect of the release;
the amount by which its liabilities exceed the fair market value of its assets before the release; and
the amount of any tax attributes of the constituent entity reduced as a result of the release.
Subregulation 4
In paragraph (3)(c), “tax attributes” means any loss, deduction, allowance, credit or similar attribute for the reduction of tax recognised under the law of the jurisdiction in which the constituent entity is located.