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<p> Tax Newsbites PwC Singapore l Tax Services Singapore updates Singapore and India signed a new protocol to update tax treaty Singapore and India have concluded a protocol on 30 December 2016 to amend certain terms of the Singapore-India double tax agreement (DTA). Very broadly, the key changes from the perspective of a Singapore resident investor are: 1. Grandfathering of capital gains tax exemption in India for disposal of shares in Indian resident companies acquired before 1 April 2017. 2. Introduction of a two-year transition period for shares acquired on or after 1 April 2017, where any gains on disposal of shares in an Indian resident company derived between 1 April 2017 and 31 March 2019 may be taxed in India but at no more than half of the applicable rate. 3. Inclusion of Article 9(2), which provides for the basis of making a corresponding adjustment in one state when a transfer pricing adjustment is made by another state to reflect adherence to the arm's length principle in related party transactions. 4. It is also provided that the DTA will not prevent each state from applying its domestic law and measures to curb tax avoidance or evasion. Further, it was announced that the two governments have agreed on steps towards a set of new initiatives for joint promotion of bilateral investments with a view to concluding an agreement in the second half of 2017. Details are available at: https://www.iras.gov.sg/irashome/News-and-Events/Newsroom/Media-Releases-and- Speeches/Media-Releases/2016/Singapore-and-India-Sign-New-Protocol-to-Update- Bilateral-Avoidance-of-Double-Taxation-Agreement--DTA-/ Income Tax (Amendment No. 3) Act 2016 The Income Tax (Amendment No. 3) Act 2016 was published on 29 December 2016. There are no changes to the Bill. Tax updates for the period 1 December 2016 to 13 January 2017 Common Reporting Standard (CRS) The Income Tax (International Tax Compliance Agreements) (Common Reporting Standard) Regulations 2016 (“CRS Regulations”) incorporate the requirements of the CRS into Singapore’s domestic legislative framework. The CRS Regulations will enter into force on 1 January 2017. Details are available at: https://www.iras.gov.sg/irashome/CRS/ Transfer Pricing The Inland Revenue Authority of Singapore (IRAS) issued a revised circular entitled "Transfer Pricing Guidelines (Fourth edition)" on 12 January 2017. Amongst the changes, IRAS added a safe harbour margin which taxpayers can apply to each related party loan not exceeding S$15 million. Our commentary is available in the attached link. Details are available at: http://www.pwc.com/sg/en/tax-bulletin/assets/taxbulletin201701.pdf Mutual Agreement Procedure The IRAS updated its website on 12 January 2017 to provide guidance on the Mutual Agreement Procedure under our Avoidance of Double Taxation Agreements. Details are available at: https://www.iras.gov.sg/irashome/Quick-Links/International-Tax/Mutual- Agreement-Procedure/ Total Asset Method for Interest Adjustment The IRAS issued a new circular setting out the application of the total asset method of attributing common interest expense to income producing and non-income producing assets. This circular applies to any taxpayer who claims deduction of interest expense and borrowing costs akin to interest, incurred on loans or borrowings, under section 14(1)(a) of the Income Tax Act. Details are available at: https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/e- Tax_Guides/etaxguides_CIT_Total%20Asset%20Method%20for%20Interest%20Adju stment_2016-12-16.pdf Real Estate Investment Trusts (REITs) The IRAS issued a circular on 6 January 2017 to explain the income tax treatment for a real estate investment trust ("REIT") and an approved sub-trust of a REIT. Details are available at: https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/e- Tax_Guides/etaxguide_Income%20Tax%20Treatment%20of%20Real%20Estate%20I nvestment%20Trusts%20and%20Approved%20Sub-Trusts.pdf YA 2018 Estimated Chargeable Income (ECI) Forms The new YA 2018 ECI forms (for company and tax agent) are available for download from the IRAS website. The revenue field in the ECI form will be made a compulsory field with effect from January 2017. Details are available at: https://www.iras.gov.sg/IRASHome/Quick-Links/Forms/Businesses/Corporate-Tax- forms/Estimated-Chargeable-Income--ECI--Forms/ Overseas updates Australia The Administrative Appeals Tribunal of Australia in Beng Tan v. Commissioner of Taxation [2016] AATA 1062 found that an individual with residence in Australia and Malaysia was an Australian resident for tax purposes under the residence "tiebreaker" test in article 4(2) of the Australia-Malaysia tax treaty. Hong Kong The Hong Kong Financial Services and the Treasury Bureau has launched a public consultation on the development of a legislative proposal to increase transparency of corporate beneficial ownership. Korea PwC Korea has issued the latest Financial Services Tax Newsletter which covers various tax issues impacting companies in the financial services industry including: the introduction of country-by-country reporting, extension of deadline for submitting documentation potential tax implications of non-beneficial service charges potential tax refund opportunities for Luxembourg SICAVs updates on relevant rulings and court cases. PwC Korea's newsletter is available at: http://www.pwc.com/kr/ko/publications/fs/samilpwc_fs-tax-hot- topics_201701_en.pdf Indonesia The Minister of Finance (MoF) has issued Regulation No. 213/PMK.03/2016 (PMK - 213) that regulates new Transfer Pricing Documentation (TPD) requirements dated and effective since 30 December 2016. As such, the requirements under this regulation are applicable for the tax year ending on 30 December 2016 and onwards. PMK-213 prevails over the existing regulations to the extent that there are any inconsistencies. PwC Indonesia's commentary is available at: http://www.pwc.com/id/en/taxflash/assets/english/2017/taxflash-2017-1.pdf Malaysia Malaysia's Income Tax Act has been amended to add country-by-country reporting rules, effective from 1 January 2017. International Tax News Among the key topics featured in December 2016 are: The Italian government approves the draft 2017 budget New rules regarding supporting documentation for the taxation of Brazilian non- resident capital gains Cyprus amends IP box The US Treasury and IRS issue final section 385 regulations. Details are available at: https://www.pwc.com/gx/en/tax/newsletters/international-tax-services/assets/pwc- international-tax-news-december-2016.pdf Among the key topics featured in January 2017 are: Brazilian tax policy adopts international transparency standards Canada expands back-to-back rules The UK Autumn Statement 2016 and Finance Bill 2017 US IRS releases final and temporary regulations under Section 987. Details are available at: https://www.pwc.com/gx/en/tax/newsletters/international-tax-services/assets/pwc- international-tax-news-january-2017.pdf Contacts If you would like to discuss any of the issues raised, please get in touch with your usual PwC contact or any of the individuals listed below: This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers Singapore Pte Ltd, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2017 PricewaterhouseCoopers Singapore Pte Ltd. All rights reserved.“PricewaterhouseCoopers” and "PwC" refer to PricewaterhouseCoopers Singapore Pte Ltd or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate legal entity. Corporate Tax Sunil Agarwal Technology, Media & Telecommunication sunil.agarwal@sg.pwc.com +65 6236 3798 Chai Sui Fun Transfer Pricing sui.fun.chai@sg.pwc.com +65 6236 3758 Paul Cornelius Energy, Utilities & Mining paul.cornelius@sg.pwc.com +65 6236 3718 Brendan Egan Insurance brendan.m.egan@sg.pwc.com +65 6236 3928 Andrew Fairfoull Value Chain Transformation andrew.fairfoull@sg.pwc.com +65 6236 4878 Nicole Fung Transfer Pricing nicole.fung@sg.pwc.com +65 6236 3618 Abhijit Ghosh Healthcare & Pharmaceutical, India Desk abhijit.ghosh@sg.pwc.com +65 6236 3888 Anuj Kagalwala Financial Services, Asset & Wealth Management anuj.kagalwala@sg.pwc.com +65 6236 3822 Paul Lau Financial Services paul.st.lau@sg.pwc.com +65 6236 3733 Peter Le Huray International Tax Services peter.g.le.huray@sg.pwc.com +65 6236 7278 Lennon Lee Treasury, Consumer & Retail, China Desk lennon.kl.lee@sg.pwc.com +65 6236 3728 Lim Hwee Seng Mergers & Acquisitions hwee.seng.lim@sg.pwc.com +65 6236 3118 Lim Maan Huey Financial Services, Treasury maan.huey.lim@sg.pwc.com +65 6236 3702 Florence Loh Consumer & Retail florence.ch.loh@sg.pwc.com +65 6236 3368 Elaine Ng Transport & Logistics elaine.ng@sg.pwc.com +65 6236 3627 Rose Sim Financial Services rose.sim@sg.pwc.com +65 6236 7118 Tan Ching Ne Technology, Media & Telecommunication, Research & Development ching.ne.tan@sg.pwc.com +65 6236 3608 Tan Hui Cheng Financial Services hui.cheng.tan@sg.pwc.com +65 6236 7557 Tan Tay Lek Conglomerates & Industrial Products tay.lek.tan@sg.pwc.com +65 6236 3768 Teo Wee Hwee Real Estate & Hospitality wee.hwee.teo@sg.pwc.com +65 6236 7618 Falgun Thakkar Transfer Pricing falgun.d.thakkar@sg.pwc.com +65 6236 7254 Sarah Wong Mergers & Acquisitions sarah.wc.wong@sg.pwc.com +65 6236 3838 Tax Leader Chris Woo chris.woo@sg.pwc.com +65 6236 3688 Indirect Tax (Goods and Services Tax) Koh Soo How soo.how.koh@sg.pwc.com +65 6236 3600 International Assignment Services Sakaya Johns Rani sakaya.johns.rani@sg.pwc.com +65 6236 3648 Margaret Duong margaret.duong@sg.pwc.com +65 6236 3958 Worldtrade Management Services (Customs and International Trade) Frank Debets frank.debets@sg.pwc.com +65 6236 7302 Legal Services Legal services are provided by Camford Law Corporation. Camford Law Corporation is part of the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. Natarajan natarajan.s@camfordlaw.com +65 6597 3339 </p>
