Singapore legislation
Regulation 92
Regulation 92
Value of deferred tax asset or liability, and computation of GloBE income or loss, in case of transfer of assets between constituent entities before transition year
Subregulation 1
For the purposes of regulation 89(1), the value of the deferred tax asset or deferred tax liability arising from a transfer of assets (not being inventory) between constituent entities of an MNE group after 30 November 2021 and before the commencement of the first in‑scope year of the transferor (X), must be based on X’s carrying value of the transferred assets upon the transfer.
Subregulation 2
In paragraph (1), a reference to a transfer of assets between constituent entities of an MNE group includes —
a transaction between constituent entities of an MNE group; and
a transaction within the same constituent entity,that does not result in a change in the ownership of the assets, if it has a similar effect for accounting purposes to a change in ownership, and in the case of sub‑paragraph (b), the constituent entity is treated as both the transferor and the transferee for the purposes of this regulation.
Subregulation 3
For the purpose of paragraph (1), where either or both of the following apply:
covered tax in relation to the transfer of assets has been paid by X in any jurisdiction, or would have been taken into account in computing X’s adjusted covered taxes under paragraph 1 of the First Schedule to the Act had the transfer taken place after the commencement of X’s transition year;
any loss of X arising in or at the beginning of the financial year in which the transfer took place is offset against any taxable income, and a deferred tax asset attributable to the loss would have been taken into account for the purposes of regulation 89(1) but for the offset,then the sum of the covered tax in sub‑paragraph (a) and the value of the deferred tax asset attributable to the loss in sub‑paragraph (b), up to the amount computed by —
working out the difference between X’s carrying value of the asset upon the transfer and the value of the asset on which the transferee based its computation of the covered tax; and
multiplying the difference by 15%,is treated as the value of the deferred tax asset.
Subregulation 4
Where the transition year of the transferee begins after the date of the transfer of assets, the value of the deferred tax asset for the purpose of paragraph (1) or (3) must be adjusted to take into account —
any subsequent capitalised expenditure incurred in respect of the assets; and
amortisation and depreciation of the assets that would have been recognised by the transferor had the transfer not occurred.
Subregulation 5
Where the sum of the matters in paragraph (3)(a) and (b) equals or exceeds the amount computed by paragraph (3)(c) and (d), the transferee need not apply paragraph (1) in relation to the transfer of assets described in that paragraph.
Subregulation 6
The transferee’s GloBE income or loss arising from the transfer of assets described in paragraph (1) is also to be based on X’s carrying value of the transferred assets upon the transfer, and paragraphs (2) to (5) apply for this purpose.