Recent Clarifications from the Income Tax Board of Review: Incorporation of Companies by Professionals and its Tax Implications


Recently, there have been professionals 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.

The line between permissible tax planning and tax avoidance was arguably unclear; and in many cases, it was no easy task to determine whether there had in fact been tax avoidance.

In the recent case of GCL v Comptroller of Income Tax [2020] SGITBR 1, the Income Tax Board of Review (ITBR) laid down several principles that may help clarify the legal position here. The case is a very significant one as it addresses head-on several important questions about professionals incorporating companies and tax avoidance.

In this webinar, expert speaker Liu Hern Kuan, who represents several professionals who have set up companies for their practice, will discuss the background of IRAS’ initiatives and the holding of the GCL case.

Programme Outline

Tax Avoidance

  • What is tax avoidance under the Income Tax Act?
  • How is tax avoidance different from tax planning or tax evasion?
  • What are the implications of tax avoidance being found?

Tax Benefits

  • What are the tax benefits in providing services through companies rather than as a sole proprietor or through an unincorporated partnership?

IRAS’ Perspectives

  • What are IRAS’ views with regards to professionals providing services through their companies?
  • What will typically take place in such an audit?

The ITBR decision of GCL v Comptroller of Income Tax [2020] SGITBR 1

  • What were the facts of the case and what did the Income Tax Board of Review hold?
  • What is the relevance and significance of the case?

Recent Clarifications & Guidance from Income Tax Board of Review

  • What planning ideas and guidance can we get from the GCL case?
  • What structures are permissible and what structures may be subject to IRAS’ adjustments for tax avoidance?

What you will learn

  • Be updated on IRAS’s latest initiatives on incorporation of companies

Target Audience

  • Tax Lawyers
  • Corporate Transactional Lawyers
  • Tax practitioners
  • Finance practitioners
  • Accountants
  • Commercial Directors

Expert Speaker

Liu Hern Kuan
Head of Tax, Tan Peng Chin LLC

Hern Kuan has wide experience in Revenue Law, having lectured in it at the Law Faculty in NUS, practiced as a tax manager in Big-4 accounting firms and as head of tax in a major law firm. He was also the Chief Legal Officer of the Inland Revenue Authority of Singapore (IRAS) for 10 years. While at IRAS he represented the Comptroller of Income Tax in the leading case on tax avoidance, AQQ v CIT.

Hern Kuan’s tax practice is largely focused on civil and criminal disputes with IRAS and tax planning and structuring, both domestic and international tax.

He has presented many seminars on tax law and was an associate staff lecturer on tax planning and international tax at SIM university.

The webinar was recorded on 14 August 2020

  • Elearning
    • PD hours: 2
    Complete online at your own pace (Self-paced)
    • $192.60 incl. GST (7%)

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