Singapore legislation
Regulation 32
Regulation 32
Election to recognise gains over 5 years
Subregulation 1
The filing entity of an MNE group may make an election in a GloBE information return (whether filed in Singapore or in another jurisdiction) in accordance with the GloBE rules that the net gain (called the relevant gain) from the disposal of local tangible assets by the constituent entities of the MNE group located in a jurisdiction (jurisdiction X) in a financial year (called FY5) is to be allocated between the constituent entities located in jurisdiction X for FY5 and the previous 4 financial years (collectively called the carry‑back period) in accordance with paragraph (2).
Subregulation 2
If an election in paragraph (1) is made, the relevant gain is to be allocated between the constituent entities located in jurisdiction X in the following manner:
first, the relevant gain is allocated to the constituent entities that have a net loss from any disposal of local tangible assets in the first financial year of the carry‑back period if that financial year is a loss year, as a gain for that financial year in the following manner:
if the relevant gain is equal to or exceeds the total net losses of all constituent entities of the MNE group located in jurisdiction X that have a net loss from the disposal of local tangible assets in that financial year, an amount of the relevant gain is allocated to each of those constituent entities up to the amount of the net loss of that constituent entity;
if the relevant gain is less than the total net losses of all constituent entities of the MNE group located in jurisdiction X that have a net loss from the disposal of local tangible assets in that financial year, the relevant gain is allocated proportionately between those constituent entities according to the amount of the net loss of each of those constituent entities over the amount of all the net losses of those constituent entities;
then, any relevant gain not allocated in sub‑paragraph (a) is allocated to all constituent entities of the MNE group that have a net loss from the disposal of local tangible assets in the second financial year of the carry‑back period if that financial year is a loss year, as a gain for that financial year in the same manner as in sub‑paragraph (a);
then, any relevant gain not allocated in sub‑paragraph (a) or (b) is allocated to all constituent entities of the MNE group that have a net loss from the disposal of local tangible assets in the third financial year of the carry‑back period if that financial year is a loss year, as a gain for that financial year in the same manner as in sub‑paragraph (a);
then, any relevant gain not allocated in sub‑paragraph (a), (b) or (c) is allocated to all constituent entities of the MNE group that have a net loss from the disposal of local tangible assets in the fourth financial year of the carry‑back period if that financial year is a loss year, as a gain for that financial year in the same manner as in sub‑paragraph (a);
then, any relevant gain not allocated in sub‑paragraph (a), (b), (c) or (d) is allocated to all constituent entities of the MNE group that have a net loss from the disposal of local tangible assets in the fifth financial year of the carry‑back period if that financial year is a loss year, as a gain for that financial year in the same manner as in sub‑paragraph (a);
then, any relevant gain not allocated in sub‑paragraph (a), (b), (c), (d) or (e) is allocated to all constituent entities of the MNE group that have a net gain from the disposal of local tangible assets in the fifth financial year of the carry‑back period in the following manner:
for each financial year in the carry‑back period, 20% of that remaining relevant gain is allocated to those constituent entities that are located in the jurisdiction of the local tangible assets for that financial year;
for each financial year in the carry‑back period, that amount of the relevant gain in sub‑paragraph (i) is allocated proportionately between those constituent entities referred to in that sub‑paragraph as a gain for that financial year, according to the amount of the net gain from the disposal of local tangible assets in the fifth financial year of the carry‑back period of each of those constituent entities over the amount of all the net gains of those constituent entities;
if, in the application of sub‑paragraph (f)(i) for any financial year in the carry‑back period, there is no constituent entity that is located in the jurisdiction of the local tangible assets that has a net gain from the disposal of local tangible assets in the fifth financial year of the carry‑back period, the amount specified in sub‑paragraph (f)(i) for the firstmentioned financial year is to be allocated equally between the constituent entities located in that jurisdiction for that financial year as a gain for that financial year.
Subregulation 3
An election in paragraph (1) does not apply to any gain or loss arising from the transfer of assets between members of the same MNE group.
Subregulation 4
If an election in paragraph (1) is made, the FANIL of a constituent entity located in jurisdiction X for each financial year in the carry‑back period must be adjusted to take any gain allocated in accordance with paragraph (2) into account as income.
Subregulation 5
Where the FANIL of a constituent entity for a financial year is adjusted in paragraph (4), the following are to be recalculated for that financial year:
the effective tax rate (as determined under section 17, including that section as applied by section 22, 23 or 25, or section 24, as the case may be) for the constituent entities of the MNE group located in jurisdiction X for that financial year;
the top-up amounts (if any) for those constituent entities for that financial year,and section 21(4) (or that provision as applied by section 22, 23, 24 or 25, as the case may be) applies accordingly.
Subregulation 6
In this regulation —
Definition
“local tangible asset” means immovable property in the jurisdiction where the constituent entity disposing of it is located;
Definition
“loss year” means a financial year where both of the following apply:
at least one constituent entity located in jurisdiction X for that financial year has a net loss from the disposal of local tangible assets in that financial year;
the sum of the net losses from the disposal of local tangible assets in that financial year of all constituent entities located in jurisdiction X in that financial year exceeds the sum of the net gains from the disposal of local tangible assets in that financial year of those constituent entities;
Definition
“net gain”, in relation to a disposal of local tangible assets by a constituent entity in a financial year, means the amount of the net gains of the constituent entity as a result of such disposal, excluding any gain or loss arising from the transfer of assets between members of the same MNE group;
Definition
“net loss”, in relation to a disposal of local tangible assets by a constituent entity in a financial year, means the amount of the net losses of the constituent entity as a result of such disposal —
that excludes any gain or loss arising from the transfer of assets between members of the same MNE group; and
that is reduced by any relevant gain that was allocated to the constituent entity by a previous application of paragraph (2).