Tuesday, October 16, 2012

201 individuals, 39 companies subject to income tax on property disposal gains in last two years


SINGAPORE: Only 201 individuals and 39 companies in Singapore have been subject to income tax on their property disposal gains in the last two years.

Deputy Prime Minister and Minister for Finance, Tharman Shanmugaratnam said this in a written response to questions in Parliament from MP Lim Biow Chuan.

Mr Tharman also provided clarification on when gains from the sale of a property are taxed and when they are not.

Singapore imposes taxes on income but not on capital gains. In determining whether gains derived from the sale of a property are considered capital or income, the Inland Revenue Authority of Singapore (IRAS) considers "the actual facts and circumstances surrounding the sale."

This means that IRAS will assess the situation leading to the sale, including the holding period of the property and the frequency of such sales. IRAS will subsequently inform the taxpayers accordingly if it assesses, after its review, that the property gains are income in nature and are therefore taxable.

Before selling their properties, taxpayers can apply to IRAS for an advance ruling to ascertain whether the gains from their intended property disposal are taxable.

Meanwhile, property trading companies are taxed on their property disposal gains as trade income.

The tax treatment for property trading companies is similar to income tax on any other type of trade income. The IRAS does not track trade income by how the trade income is generated.


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Sherry Tang | 9844 4400 | R020241C
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