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Articles 1 - 30 of 39
Full-Text Articles in Law
Tax Events In The Life Cycle Of Digital Tokens, Vincent Ooi
Tax Events In The Life Cycle Of Digital Tokens, Vincent Ooi
Research Collection Yong Pung How School Of Law
Digital tokens, or crypto assets, are digital financial assets based on distributed ledger technology. They come in a considerable variety of forms and have been used in a large number of different ways. Yet, relatively few tax laws of any jurisdiction mention digital tokens specifically. It is therefore necessary to consider how orthodox tax rules can be applied to transactions involving digital tokens. Given the broad range of forms which digital tokens and transactions involving them can take, this may appear to be a daunting task. A framework providing a rough guide on how to navigate this somewhat new area …
Report On The Challenges Which Digital Assets Pose For Tax Systems With A Special Focus On Developing Countries, Vincent Ooi
Report On The Challenges Which Digital Assets Pose For Tax Systems With A Special Focus On Developing Countries, Vincent Ooi
Research Collection Yong Pung How School Of Law
The paper highlights the need for governments to carefully consider the implications which the rise of crypto assets can have on tax systems, noting that the absence of a deliberate policy position would be a policy decision in itself, with consequences for the tax base. It discusses four main classes of tax risks which crypto assets pose.Firstly, crypto assets and crypto transactions can act as ‘functional substitutes’ for traditional assets and transactions. As existing tax laws are drafted without crypto assets in mind, this can produce a host of unintended tax consequences and produce opportunities for tax arbitrage.Secondly, the values …
Virtual Worlds, Real Money: Tax Issues In The Metaverse, Vincent Ooi, Daryl Loy
Virtual Worlds, Real Money: Tax Issues In The Metaverse, Vincent Ooi, Daryl Loy
Research Collection Yong Pung How School Of Law
When it comes to the tax world, the starting point is that international tax law does not currently give any special status to a meta realm as a distinct jurisdiction. The metaverse is not a term of art recognised by tax law. However, what we are likely to see is a change in business models and behavioural patterns, leading to different kinds of taxable events becoming either more or less prominent. Tax law may not inevitably change but the tax issues of the day will.In this article, we highlight three broad business models that are likely to feature prominently in …
Personal Service Companies And The Tax Avoidance Surcharge In Singapore, Vincent Ooi, Ben Chester Cheong
Personal Service Companies And The Tax Avoidance Surcharge In Singapore, Vincent Ooi, Ben Chester Cheong
Research Collection Yong Pung How School Of Law
Incorporation of personal service companies provide tax and non-tax advantages. With the introduction of a tax avoidance surcharge in Singapore, incorporation for non-tax advantages risks additional “tax costs” if challenged by the revenue authorities, introducing uncertainty and litigation costs. Instead of relying on a GAAR, targeted measures should restrict tax advantages to the first company incorporated by each individual taxpayer.
The Curious Case Of The 0.1 Per Cent Service Charge, Vincent Ooi
The Curious Case Of The 0.1 Per Cent Service Charge, Vincent Ooi
Research Collection Yong Pung How School Of Law
Just before 1 August 2022, a coffeeshop zi char chain announced that it would impose a 0.1% service charge. This decision was reversed within two weeks due to "customers' reactions".While the rate might appear to be absurdly low and not worth the trouble of imposing, this article suggests that there was more to the situation than first meets the eye. GST regulations require merchants to list GST inclusive prices unless the goods and services are provided by hotels and F&B outlets that are subject to a service charge. The 0.1% rate is thus explicable as a likely attempt to get …
Holding Residential Property On Inter Vivos Trusts In Singapore: Transfers Of Equity Interests, Vincent Ooi
Holding Residential Property On Inter Vivos Trusts In Singapore: Transfers Of Equity Interests, Vincent Ooi
Research Collection Yong Pung How School Of Law
Following amendments to the ACD regime in Singapore, transferring equity interests to and from a trust with no beneficial owners will attract ACD, as will the exercise of a power of appointment by a trustee to grant equity interests to a beneficiary. Renunciation of interests in a bare trust will also attract ACD. Together with the introduction of ABSD (Trust), it is now impractical to use trusts to hold residential properties for succession planning purposes. Remaining options are to gift the properties without any strings attached or bequeath the properties in a will and risk subsequent changes to death taxation.
Making Singapore A Regional Centre For Philanthropy, Kim Kit Ow, Vincent Ooi
Making Singapore A Regional Centre For Philanthropy, Kim Kit Ow, Vincent Ooi
Research Collection Yong Pung How School Of Law
The article highlights the strong ecosystem in Singapore where charitable initiatives are supported and encouraged, and builds on DPM Lawrence Wong's recent comments that the Government is reviewing its tax incentive schemes to encourage increased philanthropic giving.As a starting point, we suggest three simple ways in which tax incentives could be enhanced:1) increasing the enhanced tax deduction for donations from the current 2.5 times the amount of qualifying donations to 3 times for certain causes where there is a significant amount of public spending;2) extending the period for which tax deductions for donations can be carried forward for from the …
Holding Residential Property On Inter Vivos Trusts In Singapore: Transfers Of Interests, Vincent Ooi
Holding Residential Property On Inter Vivos Trusts In Singapore: Transfers Of Interests, Vincent Ooi
Research Collection Yong Pung How School Of Law
As a response to the “missing beneficial owner” problem highlighted by the Zhao Hui Fang case, amendments have been made to Singapore’s stamp duty regime. ABSD will now be levied at 35% on transfers of residential property to trustees, with a remission available if certain conditions are met. These conditions effectively mean that residential property held on inter vivos trusts in Singapore must be given to beneficiaries without conditions or powers of revocation or variation. This has major ramifications for succession planning, since such restrictions largely defeat the purpose of using a trust to hold property in the first place.
Tax Challenges In Debt Financing Involving Digital Tokens, Vincent Ooi
Tax Challenges In Debt Financing Involving Digital Tokens, Vincent Ooi
Research Collection Yong Pung How School Of Law
When digital tokens are used in debt finance, one cannot assume that the same orthodox tax treatment will apply. The highly specific nature of tax provisions means that they may apply very differently once digital tokens rather than fiat currency are involved. Through a case study of Singapore law, this article shows that if debt finance transactions involving digital tokens are not carefully structured, there may be severe tax consequences, including the inability to deduct borrowing costs or benefit from common tax incentives, and the possible incurrence of additional tax liabilities. This article submits that, under Singapore tax law, it …
Made Crypto Losses? Don't Assume The Taxman Will Subsidise You, Vincent Ooi, Vincent Ooi
Made Crypto Losses? Don't Assume The Taxman Will Subsidise You, Vincent Ooi, Vincent Ooi
Research Collection Yong Pung How School Of Law
The key points we made in the article are as follows:1) One might think that because income from transactions involving cryptocurrencies is taxable, the losses from such transactions would also be deductible. Unfortunately, the situation is not quite so straightforward.2) The key question is whether it is possible to establish that there was a trade or business (in trading cryptocurrencies). If so, then the deduction rules are a lot more generous. Otherwise, there will be quite a few restrictions:a) Losses from cryptocurrency transactions are unlikely to be useable to be set off against income from other sources.b) The losses will …
An Automation Tax- Adopt With Caution, Vincent Ooi
An Automation Tax- Adopt With Caution, Vincent Ooi
Research Collection Yong Pung How School Of Law
The post highlights three main issues that may result from the rapid and widespread automation of jobs: 1) declining tax revenues; 2) inequitable distribution of gains and losses from automation; and 3) social costs of job displacement, such as social support and retraining programmes for displaced workers.An automation tax may be imposed on a temporary basis to manage (slow) the rate of displacement of workers due to the adoption of automation technologies, but should not be a permanent feature. Otherwise, there will be a risk of loss of competitiveness in the long-term, possibly resulting in even greater economic harm.One main …
New Assets, (Largely) Same Old Rules: The Taxation Of Digital Tokens, Vincent Ooi
New Assets, (Largely) Same Old Rules: The Taxation Of Digital Tokens, Vincent Ooi
Research Collection Yong Pung How School Of Law
In this blog post, I highlight the fact that across jurisdictions, tax provisions specifically drafted to address the taxation of digital tokens are still quite rare, meaning that existing orthodox tax rules will have to be applied. However, care must be taken when applying tax provisions and one must be aware of the limits of "reasoning by analogy".Some tax provisions make reference to specific assets or asset classes and it cannot be assumed that digital tokens which look very similar to these assets will inevitably fall under those provisions. For example, no matter how much a digital payment token looks …
The Taxation Of Cryptocurrency Gains, Vincent Ooi
The Taxation Of Cryptocurrency Gains, Vincent Ooi
Research Collection Yong Pung How School Of Law
Taking Singapore as an example, this article lays out a series of tests for determining whether gains arising from the disposal of cryptocurrencies are trade or business income, “all other income” or capital gains. It also considers the possibility of a presumption that individuals engaging in such transactions are gambling.
Tax Avoidance By Professionals: Where Are We With Wee Teng Yau?, Vincent Ooi
Tax Avoidance By Professionals: Where Are We With Wee Teng Yau?, Vincent Ooi
Research Collection Yong Pung How School Of Law
Wee Teng Yau represents the first case on tax avoidance by professionals to come before the Supreme Court. This note attempts to reconcile the judgments of the High Court and the Income Tax Board of Review, which both made findings that the taxpayer had engaged in tax avoidance, but which approached the case rather differently on some points. Apart from a clear rejection of the “personal exertion” principle as having no legal basis under Singapore law, it appears that the common conclusion is that professionals incorporating a company would not constitute tax avoidance in itself, but if this was coupled …
Artificially Low Salaries And Tax Dodging, Hern Kuan Liu, Vincent Ooi
Artificially Low Salaries And Tax Dodging, Hern Kuan Liu, Vincent Ooi
Research Collection Yong Pung How School Of Law
In the recent case of Wee Teng Yau v Comptroller of Income Tax, the Singapore Supreme Court considered the issue of tax avoidance by professionals for the first time. The case involved a dentist, Dr Wee, who was initially employed by Alfred Cheng Orthodontic Clinic Pte Ltd (ACOC). Subsequently, he incorporated Straighten Pte Ltd (SPL), of which he was the sole director and shareholder. Dr Wee continued to provide the same dental services to ACOC's patients as he had done before. However, instead of paying Dr Wee directly for his services, ACOC paid for his services to SPL, which in …
Tax Considerations For Funds Structuring In Asia, Vincent Ooi
Tax Considerations For Funds Structuring In Asia, Vincent Ooi
Research Collection Yong Pung How School Of Law
Tax considerations play a major role in the decisions of fund managers of where to base their funds. The highly mobile nature of capital has resulted in tax competition, leading to several host jurisdictions for funds in Asia (Hong Kong, Singapore, Labuan, and the BVI) having very similar tax characteristics in terms of low effective corporate income tax rates; no capital gains taxes; no exit taxes; a single tier of taxation; and generally no withholding taxes. Other ways in which jurisdictions have attempted to distinguish themselves include a strong Double Tax Agreement network, certainty on the taxation of the carried …
Tax Implications Of Covid-19 In Singapore, Vincent Ooi
Tax Implications Of Covid-19 In Singapore, Vincent Ooi
Research Collection Yong Pung How School Of Law
As taxpayers in Singapore deal with a radically changed business environment due to COVID-19, there is a need to make non-routine decisions quickly. These decisions can have significant tax implications, which will likely manifest themselves later as the economy recovers. It is critical for taxpayers to understand the tax consequences of their decisions, even as they focus on issues of immediate survival. While the majority of the relevant tax principles are not new, the COVID-19 pandemic has resulted in the need to apply these existing principles to new situations and increased the frequency of certain activities that may have been …
Singapore’S Proposed Approach To Tackling Missing Trader Fraud, Vincent Ooi
Singapore’S Proposed Approach To Tackling Missing Trader Fraud, Vincent Ooi
Research Collection Yong Pung How School Of Law
In the Draft Goods and Services Tax (Amendment) Bill 2020 (the “Draft Bill”), Singapore proposes a new framework to deal with the problem of MTF. The approach is neatly summarised by a document released by the Singapore Ministry of Finance: “Annex: Proposed Changes to the Goods and Services Tax Act”, of which one point is of particular interest. The document states that the proposed legislative amendments will “allow the Comptroller of GST to deny a GST-registered business’ input GST claim, if the business knew or should have known that his purchase was part of or connected with a fraudulent arrangement. …
Fighting 'Missing Trader' Gst Fraud In Singapore, Hern Kuan Liu, Vincent Ooi
Fighting 'Missing Trader' Gst Fraud In Singapore, Hern Kuan Liu, Vincent Ooi
Research Collection Yong Pung How School Of Law
Missing Trader Fraud (MTF) is a problem that has plagued tax authorities around the world. It is a form of fraud by which syndicates make use of the Goods and Services Tax (GST) regime to defraud tax authorities. The recent Draft Goods and Services Tax (Amendment) Bill 2020 proposes a new framework to deal with the problem of MTF. It is expected to come into effect on Jan 1, 2021. Under the proposed framework, a taxpayer's input tax claims will be denied in cases where it knew or "should have known" that the supply made to the taxpayer was part …
Singapore Property Tax Law As It Stands: The Rebus Sic Stantibus Principle And The Statutory Formula, Vincent Ooi
Singapore Property Tax Law As It Stands: The Rebus Sic Stantibus Principle And The Statutory Formula, Vincent Ooi
Research Collection Yong Pung How School Of Law
The Singapore jurisprudence appears to have adopted the proposition that the rebus sic stantibus principle is to be disapplied where section 2(3) of the Singapore Property Tax Act (“PTA”) (the “Statutory Formula”) is applied. This article argues that this proposition perhaps ought to be stated more precisely. The principle is only disapplied where section 2(3)(b) is applied because it would run contrary to the statutory fiction imposed by section 2(3)(b) that the land is to be valued as if it were vacant land. There should be no disapplication of the principle where section 2(3)(a) is applied due to the absence …
Revisiting The Automation Tax Debate In Light Of Covid-19 And Resulting Structural Unemployment, Vincent Ooi
Revisiting The Automation Tax Debate In Light Of Covid-19 And Resulting Structural Unemployment, Vincent Ooi
Research Collection Yong Pung How School Of Law
As lockdowns ease around the globe and businesses reopen, the threat of jobs being automated by machines and workers being displaced as a result has significantly increased. Businesses must keep the number of workers on site to a minimum to comply with safe distancing measures. Under these constraints while social distancing remains the norm, automation might be the way forward for companies that still want to continue production while minimising human contact. The threat of a workforce being replaced by robots and automation, a threat that has already alarmed the labour movement, is heightened with Covid-19. There will be considerable …
The Tax Treatment Of Haircuts In Financial Reorganizations, Aurelio Gurrea-Martinez, Vincent Ooi
The Tax Treatment Of Haircuts In Financial Reorganizations, Aurelio Gurrea-Martinez, Vincent Ooi
Research Collection Yong Pung How School Of Law
Over the past few years, Singapore has implemented various ambitious insolvency reforms aimed at making the country an international hub for debt restructuring. This article argues that while Singapore has put in place one of the most sophisticated restructuring frameworks in the world, some tax reforms might be useful to maximise the potential of this new restructuring framework. Namely, it will be pointed out that the tax treatment of debt forgiveness granted by creditors in corporate reorganisation (‘haircuts’) should be reviewed. Under the current legislation, these haircuts may be treated as taxable income. As a result, financially distressed debtors may …
Genuine Incorporation Or Tax Avoidance?, Liu Hern Kuan, Vincent Ooi
Genuine Incorporation Or Tax Avoidance?, Liu Hern Kuan, Vincent Ooi
Research Collection Yong Pung How School Of Law
In 2018, two articles in The Straits Times described how some professionals were incorporating one or more companies in an attempt to gain tax advantages. The issue was the difference between the highest personal income tax rate of 22 per cent and the corporate tax rate of 17 per cent, which provided an opportunity for tax arbitrage. The Start-Up Tax Exemption Scheme and Partial Tax Exemption and the availability of corporate tax rebates (typically announced during the Budget) also contributed to making incorporating one or more companies more attractive. Since the articles were published, many professionals have attempted to justify …
Taxing "All Other Income" In Singapore And Malaysia, Vincent Ooi
Taxing "All Other Income" In Singapore And Malaysia, Vincent Ooi
Research Collection Yong Pung How School Of Law
Section 10(1)(g) of the Singapore Income Tax Act is a ‘sweeping-up’ provision which catches all income not falling under sections 10(1)(a)–(f). More than 50 years after its introduction, the application of section 10(1)(g) is still unclear despite the test laid out in IB v CIT. This article notes that the current jurisprudence is limited to cases involving gains or profits from the disposal of assets. It argues that the reliance on the Australian Myer Emporium test in IB v CIT was misplaced and that the section 10(1)(g) test should not have a sole focus on intention. Rather, it proposes a …
Automation Tax Vs Robot-Tax, Vincent Ooi
Automation Tax Vs Robot-Tax, Vincent Ooi
Research Collection Yong Pung How School Of Law
The positive impact of developments in technology on the economy has historically outweighed the disruptive impact on employment. Society has benefited from the efficiency gains derived from the application of technology in production, while workers displaced by these technologies have largely been successfully retrained and employed in other jobs. However, the pace of development of the “Fourth Industrial Revolution” now presents a risk of mass displacement of human labour, particularly in tasks that are repetitive and menial. The “Fourth Industrial Revolution” is characterised by significant progress in a closely-linked cluster of areas such as robot dexterity, machine learning, processing power, …
The Case For Redistributive Taxation In Singapore, Vincent Ooi
The Case For Redistributive Taxation In Singapore, Vincent Ooi
Research Collection Yong Pung How School Of Law
In light of the recent debate on whether Singapore should consider imposing wealth and inheritance taxes on ultra-high net worth individuals, this article seeks to address two key questions: 1) whether wealth should be taxed; and 2) how wealth should be taxed. The first question is one of moral philosophy while the second is one of tax policy.
Taxation Of Automation And Artificial Intelligence As A Tool Of Labour Policy, Vincent Ooi, Glendon Goh
Taxation Of Automation And Artificial Intelligence As A Tool Of Labour Policy, Vincent Ooi, Glendon Goh
Centre for AI & Data Governance
Rapid developments in automation technology pose a risk of massdisplacement of human labour, resulting in the need to support and retraindisplaced workers (a negative externality). We propose an “automation tax”that would slow the adoption of automation technology in appropriatecircumstances, giving workers and social support systems time to adapt. Thiscould be easily implemented through changes to the existing schedular systemof depreciation/ capital allowances, reducing the uncertainty of its applicationand implementation costs. Such a system would be flexible enough to keepup with rapid technological developments. Two main dimensions may beadjusted to produce intended distortionary effects: 1) accelerated depreciation,and 2) bonus depreciation. While …
Proposed Reforms To Singapore Goods And Services Taxation In The Digital Economy, Hern Kuan Liu, Vincent Ooi
Proposed Reforms To Singapore Goods And Services Taxation In The Digital Economy, Hern Kuan Liu, Vincent Ooi
Research Collection Yong Pung How School Of Law
With the rapid development of the digital economy and the increasing importance of GST as a source of tax revenue, the Singapore Government has proposed several reforms to tighten the collection of tax revenue and tap its tax base more efficiently. The reforms focus on activating the currently dormant “reverse charge” mechanism to collect GST on supplies of services “imported” by businesses; creating an “overseas vendor registration regime” to catch digital products “imported” by individuals; and clarifying the “place of supply” requirement for supplies of digital products. This article considers the reforms from the perspective of a foreign business that …
Gst Contract Review, Vincent Ooi
Gst Contract Review, Vincent Ooi
Research Collection Yong Pung How School Of Law
GST contract review—overviewTax lawyers are often asked to review a commercial contracts from a Goods Services Tax (“GST”) perspec-tive. This note focuses on contracts for the supply of services or goods, and not a contract for the sale and purchase of a business.Understanding the GST consequences of the contractThe contract that you are asked to review will usually contain a GST clause, but it is insufficient to look only at that clause. As further explained in Practice Note: How to review a commercial contract for GST purposes, you should also review the whole contract so that you can establish:• What …
Singapore Income Taxation, Vincent Ooi, Irving Aw, Joanna Yap
Singapore Income Taxation, Vincent Ooi, Irving Aw, Joanna Yap
Research Collection Yong Pung How School Of Law
28.1.1 Section 10(1) of the Income Tax Act (Cap. 134, 2014 Rev. Ed.) (“ITA”) is the charging provision which provides for income tax to be payable for each year of assessment (“YA”) upon the income of any person. Income is taxable if it falls within one of the enumerated heads of charge under sections 10(1)(a) to (g).Income is taxable only if it is sourced in Singapore, i.e. accruing in or derived from Singapore, or received in Singapore from outside Singapore, subject to variations.Only revenue (and not capital) receipts are taxable, and only revenue (and not capital) expenses are deductible for …