Singapore legislation
Regulation 61
Regulation 61
Transfer of assets or liabilities
Subregulation 1
Where a constituent entity of an MNE group transfers an asset or liability to another entity or person in a financial year, any gain or loss arising on the transfer must be included in its GloBE income or loss for that financial year.
Subregulation 2
Where a constituent entity of an MNE group acquires an asset or liability from another entity or person in a financial year, then, in computing its GloBE income or loss, any gain or loss arising from that asset or liability must be determined on the basis of —
where regulation 60 applies in respect of the acquisition of that asset or liability and the transferor had determined its gain or loss on the basis of the fair value of that asset or liability at the time of the transfer — the fair value of that asset or liability at that time; or
in any other case — the carrying value of that asset or liability as determined under the financial accounting standard used in preparing the consolidated financial statements of the ultimate parent entity of the MNE group.
Subregulation 3
Despite paragraphs (1) and (2), where a constituent entity of an MNE group transfers any asset or liability to another constituent entity of that MNE group in the course of a reorganisation —
any gain or loss on the transfer must be excluded from the FANIL of the transferor, except to the extent it is a non-qualifying gain or loss of the transferor; and
any gain or loss on a subsequent transfer of the asset or liability by the transferee must be determined on the basis of the carrying value of the asset or liability recognised by the transferor immediately before the firstmentioned transfer, adjusted for any non‑qualifying gain or loss of the transferor.
Subregulation 4
In paragraph (3), a transfer of an asset or liability is made in the course of a reorganisation if the transfer takes place as a result of a merger, demerger, liquidation, change in form of an entity, or a similar event, and conditions A, B and C are met.
Subregulation 5
Condition A is that —
if consideration is provided for the transfer, the consideration consists of, in whole or in significant part —
in the case of a liquidation — the cancellation of equity interests in the entity being liquidated; or
in any other case — equity interests issued by the transferee or a person connected with the transferee; and
if no consideration is provided for the transfer — the issue of equity interests as consideration for the transfer would have no economic significance because the event does not result in a change in the beneficial ownership of any entity.
Subregulation 6
Condition B is that any gain or loss of the transferor that arises from the transfer is not, in whole or in part, subject to tax.
Subregulation 7
Condition C is that under the law of the jurisdiction where the transferee is located, the value of the asset or liability for the purpose of determining the transferee’s taxable income is the tax basis value of the asset or liability in the hands of the transferor, adjusted for any non-qualifying gain or loss of the transferor.
Subregulation 8
Where a transfer of any asset or liability between constituent entities of an MNE group is not made under arm’s length conditions (as defined in regulation 21(7)), then any gain or loss arising on the transfer that is to be included in the transferor’s GloBE income or loss, must be adjusted to secure that the transfer is reflected as made under arm’s length conditions.
Subregulation 9
In this regulation, “non-qualifying gain or loss” means an amount of gain or loss on the transfer of any asset or liability that —
in the case of a gain, is not greater than —
the amount of gain on that transfer that is subject to tax in the jurisdiction where the transferor is located; or
the amount of gain on that transfer that is reflected in the FANIL of the transferor; or
in the case of a loss, is not greater than —
the amount of loss on that transfer that is taken into account for tax purposes in the jurisdiction where the transferor is located; or
the amount of loss on that transfer that is reflected in the FANIL of the transferor.