Singapore legislation
Regulation 41
Regulation 41
Non-marketable transferable tax credits
Subregulation 1
The adjusted covered taxes for a financial year of a constituent entity of an MNE group that is an originator of a non‑marketable transferable tax credit that transfers the same in the financial year, must be adjusted by treating the consideration for the transfer as a negative amount of tax expense and treating the non‑marketable transferable tax credit as having been used by that constituent entity.
Subregulation 2
The adjusted covered taxes for a financial year of a constituent entity of an MNE group that is a purchaser of a non‑marketable transferable tax credit must be adjusted as follows:
any amount of the tax credit used to satisfy its liability for covered taxes for the financial year is multiplied by —where —
A is the full value of the tax credit; and
B is the price paid by the constituent entity for the tax credit,and treated as a negative amount of tax expense;
if the tax credit is transferred by the constituent entity in the financial year, any positive amount computed by the following formula is treated as a negative amount of tax expense:where —
C is the consideration received by the entity for the transfer;
D is the amount of the tax credit that has been used by the entity for that financial year and all previous financial years;
E is the consideration paid by the entity to acquire the tax credit; and
F is the total negative amount of tax expense recognised by the entity under sub‑paragraph (a) in respect of the tax credit for that financial year and all previous financial years;
any other amount of the tax credit that is excluded from the adjusted covered taxes is treated as a positive amount of tax expense.