Singapore legislation
Regulation 56
Regulation 56
Inclusion of certain properties as eligible tangible assets
Subregulation 1
In paragraph (e) of the definition of “eligible tangible asset” in section 18(4), a property held by a constituent entity of an MNE group as a lessor under a lease is an eligible tangible asset of the lessor (but not the lessee) where the lessee of the property is another constituent entity of the MNE group located in the same jurisdiction as the lessor.
Subregulation 2
In a case mentioned in paragraph (1), the lessor’s carrying value of the property for the financial year must be adjusted to take into account any elimination adjustments attributable to inter‑company leases in respect of the property.
Subregulation 3
Subject to paragraph (1), in paragraph (e) of the definition of “eligible tangible asset” in section 18(4), a property held by a constituent entity of an MNE group as a lessor under an operating lease is an eligible tangible asset of the lessor if the property is located in the same jurisdiction as the lessor.
Subregulation 4
In a case mentioned in paragraph (3), the lessor’s carrying value of the property for the financial year is —
if the property is not a short-term rental property and the lessee is another constituent entity of the MNE group — the excess (if any) of the lessor’s carrying value of the property for the financial year over the lessee’s carrying value of the property for that financial year;
if the property is not a short-term rental property and the lessee is not a constituent entity of the MNE group — the excess (if any) of the lessor’s carrying value of the property for the financial year over the average amount for the financial year of the undiscounted remaining amount of payments due under the lease, including any renewal or extension that would be taken into account in determining the value of the right to use the property under the financial accounting standard used to determine the FANIL of the lessor; or
if the property is a short-term rental property — the lessor’s carrying value of the property for the financial year.
Subregulation 5
In paragraph (4)(b), the average amount for a financial year of the undiscounted remaining amount of payment due under a lease is the average of —
the undiscounted remaining amount of payments due under the lease at the start of the financial year; and
the undiscounted remaining amount of payments due under the lease at the end of the financial year.
Subregulation 6
If a part of an asset comprising property is held by a constituent entity of an MNE group for lease, and another part of that property is retained for use by the constituent entity —
the different parts of the property are treated as separate assets for the purposes of this regulation; and
the carrying value of the asset is to be allocated between the separate parts on a just and reasonable basis.
Subregulation 7
In this regulation —
Definition
“operating lease” means a lease of a property that does not transfer substantially the obsolescence, risks and rewards incidental to ownership of the property to the lessee;
Definition
“short-term rental property” means a property that is leased regularly to different lessees during a financial year and the average lease period, including any renewals and extensions, with respect to each lessee is 30 days or less.