§ 3 — “Flow‑through entity”, “reverse hybrid entity” and meaning of fiscal transparency

3.—(1) In this Act, an entity is a “flow‑through entity” to the extent it is fiscally transparent with respect to any of its income, expenditure, profit or loss —(a)

if it is established, formed, incorporated or registered under the laws of Singapore — under the ITA; or

(b)

if it is established, formed, incorporated or registered under the laws of a jurisdiction other than Singapore — under the law of that jurisdiction governing income tax or tax of a similar nature,

but not if it is a tax resident of, and its income or profit is subject to a covered tax under the law of, another jurisdiction.

(1A) In this Act, an entity that is not a tax resident of any jurisdiction, and is not subject to DTT (if it is established, formed, incorporated or registered under the laws of Singapore), or any covered tax or qualified domestic minimum top-up tax in the jurisdiction under whose laws it is established, formed, incorporated or registered, is also a “flow-through entity” to the extent that —(a)

it is fiscally transparent with respect to any of its income, expenditure, profit or loss that is attributable to any holder of ownership interests in it, under the laws of the jurisdiction where that holder is located;

(b)

it does not have a place of business in the jurisdiction under the laws of which it is established, formed, incorporated or registered; and

(c)

its income, expenditure, profit or loss is not attributable to a permanent establishment.[Act 25 of 2025 wef 01/01/2025]

(2) In this Act, a flow-through entity (A) is a “reverse hybrid entity” with respect to any of its income, expenditure, profit or loss that is attributable to its reference entity (B), if A, or any flow-through entity through which B holds its ownership interest in A, is not fiscally transparent with respect to that income, expenditure, profit or loss under the law of the jurisdiction where B is located.[Act 25 of 2025 wef 01/01/2025]

(3) In this Act, an entity (X) is “fiscally transparent” with respect to any of its income, expenditure, profit or loss, or that of another entity in which X holds ownership interest, under the law of a jurisdiction if that law treats the income, expenditure, profit or loss as if it were derived or incurred by a direct owner of X in proportion to that owner’s interest in X.[Act 25 of 2025 wef 01/01/2025]

(4) Any obligation, debt or liability in this Act of a flow‑through entity is that of —(a)

in the case of a partnership or limited partnership —(i)

for an obligation other than a debt or liability — the precedent partner (as defined in section 71(1) of the ITA);

(ii)

for a debt or liability — the partners or limited partners (as the case may be) on a joint and several basis;

(b)

in the case of a limited liability partnership — the limited liability partnership; or

(c)

in the case of a trust — the trustee.

—(1) In this Act, an entity is a “flow‑through entity” to the extent it is fiscally transparent with respect to any of its income, expenditure, profit or loss —(a)

if it is established, formed, incorporated or registered under the laws of Singapore — under the ITA; or

(b)

if it is established, formed, incorporated or registered under the laws of a jurisdiction other than Singapore — under the law of that jurisdiction governing income tax or tax of a similar nature,

but not if it is a tax resident of, and its income or profit is subject to a covered tax under the law of, another jurisdiction.

(1A) In this Act, an entity that is not a tax resident of any jurisdiction, and is not subject to DTT (if it is established, formed, incorporated or registered under the laws of Singapore), or any covered tax or qualified domestic minimum top-up tax in the jurisdiction under whose laws it is established, formed, incorporated or registered, is also a “flow-through entity” to the extent that —(a)

it is fiscally transparent with respect to any of its income, expenditure, profit or loss that is attributable to any holder of ownership interests in it, under the laws of the jurisdiction where that holder is located;

(b)

it does not have a place of business in the jurisdiction under the laws of which it is established, formed, incorporated or registered; and

(c)

its income, expenditure, profit or loss is not attributable to a permanent establishment.[Act 25 of 2025 wef 01/01/2025]

(2) In this Act, a flow-through entity (A) is a “reverse hybrid entity” with respect to any of its income, expenditure, profit or loss that is attributable to its reference entity (B), if A, or any flow-through entity through which B holds its ownership interest in A, is not fiscally transparent with respect to that income, expenditure, profit or loss under the law of the jurisdiction where B is located.[Act 25 of 2025 wef 01/01/2025]

(3) In this Act, an entity (X) is “fiscally transparent” with respect to any of its income, expenditure, profit or loss, or that of another entity in which X holds ownership interest, under the law of a jurisdiction if that law treats the income, expenditure, profit or loss as if it were derived or incurred by a direct owner of X in proportion to that owner’s interest in X.[Act 25 of 2025 wef 01/01/2025]

(4) Any obligation, debt or liability in this Act of a flow‑through entity is that of —(a)

in the case of a partnership or limited partnership —(i)

for an obligation other than a debt or liability — the precedent partner (as defined in section 71(1) of the ITA);

(ii)

for a debt or liability — the partners or limited partners (as the case may be) on a joint and several basis;

(b)

in the case of a limited liability partnership — the limited liability partnership; or

(c)

in the case of a trust — the trustee.