ITA1947 § 34CA — Transfer of businesses by insurer

資料由法律人 LawPlayer整理提供·Singapore statutory provision · curated by LawPlayer

§ 34CA — Transfer of businesses by insurer

34CA.—(1) This section applies to a case where —(a)

a licensed insurer that is a company incorporated in Singapore (called in this section the transferor) transfers the whole of its insurance business along with all businesses ancillary to it if any (collectively called in this section the insurance business), to another company incorporated in Singapore (called in this section the transferee) under Division 1 of Part 3AA of the Insurance Act 1966, and the scheme for the transfer under section 117 of that Act takes effect on a single date (called in this section date A) that is on or after 1 November 2021;

(b)

the conditions for the application of this section to the transfer in paragraph (a) as set out in subsection (3) are satisfied;

(c)

the transferor also transfers all of its other trades and businesses (each called in this section a non‑insurance business), if any, to the transferee, and the transfer of every non‑insurance business takes effect on a single date (called in this section date B) that is no earlier than 12 months before date A (or such other period as may be allowed under subsection (1A)) and no later than 12 months after date A;[Act 25 of 2025 wef 08/12/2025]

(d)

the transferee has obtained approval under subsection (4) to the application of this section to the transfer of every non‑insurance business in paragraph (c);

(e)

the conditions of the approval in subsection (5) are satisfied; and

(f)

the transferee makes an election under subsection (6) for the application of this section to the transfer of those businesses.

(1A) The Minister or Comptroller may, in a particular case, extend the period of 12 months before or after date A that date B must fall.[Act 25 of 2025 wef 08/12/2025]

Interpretation

(2) In this section —“effective date”, in relation to a transferred business, means —(a)

where the transferred business is the insurance business — date A; and

(b)

where the transferred business is any non-insurance business — date B;

“first 2 years of assessment”, in relation to a transferor, means the year of assessment relating to the basis period during which the transferor is incorporated and the year of assessment immediately following that year of assessment;

“FRS 38”, “FRS 103”, “SFRS(I) 1-38” and “SFRS(I) 3” mean the financial reporting standards known respectively as —(a)

Financial Reporting Standard 38 (Intangible Assets);

(b)

Financial Reporting Standard 103 (Business Combinations);

(c)

Singapore Financial Reporting Standard (International) 1-38 (Intangible Assets); and

(d)

Singapore Financial Reporting Standard (International) 3 (Business Combinations),

that are made by the Accounting Standards Committee under Part 3 of the Accounting Standards Act 2007, as amended from time to time;

[Act 36 of 2022 wef 01/04/2023]

“licensed insurer” has the meaning given by section 2 of the Insurance Act 1966;

“transferred business” means the insurance business or any of the non‑insurance businesses, as the case may be.

Conditions for transfer of insurance business

(3) In subsection (1)(b), the conditions are —(a)

all the properties, rights and privileges of the insurance business are transferred to and vest in the transferee on date A;

(b)

all the liabilities and obligations of the insurance business are transferred to and become the liabilities and obligations of the transferee on date A;

(c)

the transferor permanently ceases to carry on the insurance business on date A;

(d)

the transferor is wound up or dissolved before the prescribed date or such later date as the Minister or Comptroller may allow in a particular case; and[Act 25 of 2025 wef 08/12/2025]

(e)

such other conditions as may be prescribed by regulations under subsection (31).

Approval for transfer of non-insurance business

(4) The transferee must, within 90 days from date A or date B (whichever is earlier) or such further period as the Minister or such person as the Minister may appoint may allow, apply to the Minister or person for approval for this section to apply to the transfer of the non‑insurance business or businesses in subsection (1)(c).

(5) The Minister or appointed person may give his or her approval subject to such conditions (including conditions subsequent) as he or she considers appropriate.

Election

(6) The transferee must, within 90 days from date A or date B (whichever is later) or such further period as the Comptroller may allow, elect for this section to apply to the transfers of businesses in subsection (1).

(7) An election under subsection (6) must be made by the transferee by written notice to the Comptroller and is irrevocable.

(8) From (and including) the effective date, the transferred business is treated as carried on in Singapore by the transferee and —(a)

subject to subsection (14), any property on revenue account of the transferor relating to the transferred business is treated as property on revenue account of the transferee; and

(b)

subject to subsection (16), any property on capital account of the transferor relating to the transferred business is treated as property on capital account of the transferee,

and the transferee is treated as having acquired the property on the date on which the transferor acquired it for the amount that was incurred by the transferor in respect of that property.

Transfer of property

(9) Where there is a transfer of property in respect of the transferred business from the transferor to the transferee on the effective date in respect of which allowances or writing-down allowances have been made to the transferor under sections 18C to 21 (other than section 19D), the transferor and the transferee are, subject to section 24(4), considered as having made an election under section 24(3), and section 24(3)(a) to (e) applies with the necessary modifications, whether or not —(a)

the transferee is a company over which the transferor has control;

(b)

the transferor is a company over which the transferee has control; or

(c)

both the transferor and transferee are companies under the control of a common person.

(10) In the application of section 24(3)(a) to (e) under subsection (9) —(a)

a reference in that provision to a buyer is to the transferee; and

(b)

a reference in that provision to a seller is to the transferor.

(11) Where there is a transfer of a building or structure in respect of the transferred business from the transferor to the transferee on the effective date for which an allowance has been made to the transferor under section 18C, the annual allowances provided under that section continue to be available to the transferee as if the transferee had incurred the qualifying capital expenditure that was incurred in carrying out the approved construction or approved renovation (as the case may be) mentioned in that section.

(12) Subsection (11) does not apply unless the building or structure is used before the transfer by the transferor and after the transfer by the transferee, in the production of income chargeable under the provisions of this Act.

(13) Where —(a)

there is a transfer of property in respect of the transferred business (being intellectual property rights in respect of which writing-down allowances have been made to the transferor under section 19B) from that transferor to the transferee on the effective date; and

(b)

before the transfer in the case of that transferor and from any time on or after the transfer in the case of that transferee, the property is used in the production of income chargeable under the provisions of this Act,

the following provisions apply but subject to subsection (18):

(c)

section 19B(4) and (5) does not apply to the transferor;

(d)

the writing-down allowances under section 19B continue to be available to the transferee as if no transfer had taken place;

(e)

the charge under section 19B(4) and (5) is to be made on the transferee on any event occurring on or after the effective date as would have fallen to be made on the transferor if the transferor had continued to own the intellectual property rights and had done all such things and been allowed all such allowances as were done by or allowed to the transferee.

(14) Where there is a transfer of property in respect of the transferred business from the transferor to the transferee, being property on revenue account of the transferor but not on revenue account of the transferee, the consideration for the transfer of the property by the transferor is taken as the amount which it would have realised if the property had been sold in the open market on the effective date.

(15) The amount of consideration mentioned in subsection (14) is to be used to compute the gains or profits of the transferred business of the transferor and such gains or profits are chargeable to tax for the year of assessment which relates to the basis period in which the effective date falls.

(16) Where there is a transfer of property in respect of the transferred business from the transferor to the transferee, being property not on revenue account of the transferor but on revenue account of the transferee, the consideration for the acquisition of the property by the transferee is taken as the amount which it would have incurred if the property had been purchased in the open market on the effective date or the actual amount paid, whichever is lower.

(17) The amount of consideration mentioned in subsection (16) is to be deducted as an expense in computing the gains or profits of the transferred business of the transferee.

(18) Where the transferee ceases to carry on the transferred business in Singapore after the effective date but instead carries on that business outside Singapore, then in the case of intellectual property rights transferred pursuant to the transfer of that business and in respect of which subsection (13) applies, the charge under section 19B(4) or (5) (as the case may be) is to be made on the transferee as if the property has been sold on the date of cessation of the transferred business in Singapore; and for the purpose of computing the charge under section 19B(5), the value thereof is the amount which it would have realised if the property had been sold in the open market on the date of cessation of the transferred business in Singapore.

(19) Any question arising under subsections (14), (16) and (18) regarding the open market value attributable to property is to be determined by the Comptroller.

(20) No deduction under section 19B is allowed to the transferee for any intellectual property rights in respect of the transferred business that are recognised in accordance with FRS 38 and FRS 103, or with SFRS(I) 1‑38 and SFRS(I) 3, as a result of the transfer of the business but which were not in existence prior to the transfer of the business.

(21) Where the transferee continues to carry on the transferred business and at any time —(a)

writes off as bad the amount of a debt in respect of the transferred business, or provides impairment loss in respect of such debt, that the transferee acquires from the transferor on the effective date;

(b)

incurs an expenditure in respect of the transferred business, other than the expenditure to which prescribed sections of this Act apply; or

(c)

incurs a loss in respect of the transferred business,

the transferee —

(d)

is allowed a deduction for the amount of the debt, expenditure or loss (as the case may be) if —(i)

the transferor would have been allowed the deduction but for the transfer of the business; and

(ii)

the transferee is not otherwise allowed the deduction; and

(e)

is chargeable to tax on the amount of the debt recovered or impairment loss that is reversed if —(i)

the transferor would have been chargeable to tax on such amount but for the transfer of the business; and

(ii)

the transferee is not otherwise chargeable to tax on such amount.

(22) Where —(a)

the transferor has been allowed a deduction in respect of any debt written off as bad, or any impairment loss, in respect of the transferred business; and

(b)

the transferee continues to carry on the transferred business,

the transferee is chargeable to tax on the amount of the debt recovered or impairment loss that is reversed if —

(c)

the transferor would have been chargeable to tax on such amount but for the transfer of the business; and

(d)

the transferee is not otherwise chargeable to tax on such amount.

(23) Where the transferor has any capital allowance, donation or loss attributable or apportioned to the transferred business remaining unabsorbed on the effective date, then sections 23 and 37 apply, with the necessary modifications, as if the transferee is the transferor for the purposes of deducting the unabsorbed capital allowance, donation or loss against the income or the statutory income (as the case may be) of the transferee, subject to the conditions in subsection (24).

(24) The conditions in subsection (23) are —(a)

the transferor was carrying on the transferred business until the effective date; and

(b)

the transferee continues to carry on the transferred business on the effective date.

(25) Any deduction mentioned in subsection (23) may only be made against the income of the transferee from the transferred business.

(26) For the purpose of bringing into account the profit, loss or expense for the basis period for a year of assessment beginning before 1 January 2023 in respect of any financial instrument that has been transferred by the transferor to the transferee as part of the transfer of a business —(a)

where the transferor was a qualifying person to which section 34AA applies (called in this subsection a section 34AA qualifying person) for the year of assessment of the basis period in which the effective date falls — the transferee is (unless the transferee was already one) deemed to be a section 34AA qualifying person for that year of assessment, and section 34AA has effect on the transferee from (and including) the effective date;

(b)

where the transferor was not a section 34AA qualifying person for the year of assessment of the basis period in which the effective date falls, but the transferee was a section 34AA qualifying person for that year of assessment — the regulations under section 34AA that provide for the transition of a person to the tax treatment under section 34AA have effect on the transferor for that year of assessment as if the transferor and transferee were a single section 34AA qualifying person, and any positive or negative adjustment which is not of a capital nature as a result of the application of such regulations is to be assessed on or allowed to the transferee;

(c)

where the transferor was a qualifying person to which section 34A applies (called in this subsection a section 34A qualifying person) for the year of assessment of the basis period in which the effective date falls — the transferee is (unless the transferee was already a section 34A qualifying person, or a section 34AA qualifying person, for that year of assessment) deemed to be a section 34A qualifying person for that year of assessment, and section 34A has effect on the transferee from (and including) the effective date; or

(d)

where the transferor was neither a section 34A qualifying person, nor a section 34AA qualifying person, for the year of assessment of the basis period in which the effective date falls, but the transferee was a section 34A qualifying person for that year of assessment — the regulations under section 34A that provide for the transition of a person to the tax treatment under section 34A have effect on the transferor for that year of assessment as if the transferor and the transferee were a single section 34A qualifying person, and any positive or negative adjustment which is not of a capital nature as a result of the application of such regulations is to be assessed on or allowed to the transferee.

Transferee as qualifying company under section 43(6C)

(27) Where the transferee is a qualifying company for the purpose of section 43(6C) in any year of assessment, then, for that year of assessment —(a)

in a case where the earlier of date A and date B does not fall within either of the basis periods of the first 2 years of assessment of the transferor, section 43(6) rather than section 43(6C) applies to the transferee; and

(b)

in a case where the earlier of date A and date B falls within either of the basis periods of the first 2 years of assessment of the transferor, section 43(6C) applies to the transferee if, and only if, the firstmentioned year of assessment falls within such period as may be prescribed by the Minister, and if it does not, then section 43(6) applies to the transferee.

(28) The Minister may, for different descriptions of transfers of businesses or companies, prescribe different periods for the purposes of subsection (27)(b).

(29) Starting on the effective date for the transferred business, the transferee must comply with all obligations, meet all liabilities, and is entitled to all rights, powers and privileges, of the transferor under this Act in respect of the business with respect to the year of assessment relating to the basis period in which the effective date falls, and all preceding years of assessment as if the transferee is the transferor.

Application of section 26(5) and (13)

(30) To avoid doubt, section 26(5) and (13) (if applicable) applies in relation to the transfer of the insurance business in subsection (1)(a).

Regulations

(31) The Minister may make regulations to —(a)

provide for the deduction of expenses, allowances, losses, donations and any other deductions otherwise than in accordance with this Act;

(b)

provide for the manner and extent to which expenses, allowances, losses, donations and any other deductions may be allowed under this Act;

(c)

provide for the manner and extent to which any qualifying deduction may be allowed under section 37B or 37D;

(d)

provide for the rate of exchange to be used for the purpose of section 62B;

(e)

provide for the modification and exception to any prescribed section of this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967 as it applies to a transferee and a transferor;

(f)

provide, in a case where a requirement in subsection (1) is yet to be satisfied, for this section (or any part of it) to nevertheless apply to that case (with or without modification), and for the reversal of any such application, and the amendment of any assessments previously made, if that requirement is not met; and[Act 30 of 2023 wef 30/10/2023]

(g)

prescribe any matter required or permitted to be prescribed under this section.

(32) Regulations made under subsection (31) may be made to take effect from (and including) a date no earlier than 1 November 2021.[Act 33 of 2022 wef 01/11/2021]

—(1) This section applies to a case where —(a)