Group Relief allows companies within the same group to transfer unutilized tax losses, donations, or capital allowances to offset the taxable income of other companies within the group. At Apexia Corporate Advisory, we guide businesses through the Group Relief process to optimize tax benefits and compliance.
Group Relief is a tax scheme in Singapore that enables companies within the same group to transfer qualifying deductions to other group companies to minimize their overall tax liability. This scheme helps groups of companies maximize the use of unutilized deductions while fostering efficient tax management.
To qualify for Group Relief, companies must meet the following conditions:
The following types of deductions are eligible for transfer under the Group Relief scheme:
Loss items are to be transferred/ claimed in the following order:
Note: Income subject to tax at the higher rate is to be transferred first, followed by the amount subject to tax at a lower rate (subject to the adjustment specified under Section 37A of the Income Tax Act 1947, if applicable). A transferor company may transfer 100% of its loss items to a claimant company as long as the loss can be absorbed by the claimant company and the qualifying conditions are met.
Where the first set of financial statements is submitted for a period exceeding 12 months, the losses to be transferred or claimed under Group Relief should be ascertained after the losses or income of the new company have been apportioned to its respective Years of Assessment (YAs).
For example, if the first set of financial statements is for the period from 1 Jun 2021 to 31 Dec 2022, the losses should be apportioned to YAs 2022 (i.e. 1 Jun 2021 to 31 Dec 2021) and 2023 (i.e. 1 Jan 2022 to 31 Dec 2022).
Where there are multiple transferors/ claimants, the loss items are transferred/ claimed in accordance with the priority spelt out in the companies' respective Form GR-A and Form GR-B.
Where a transferor company wishes to transfer its loss items to more than 1 claimant company, the loss items must be fully deducted from the available assessable income of the first claimant company before any excess loss items are deducted from the available assessable income of the second claimant company, and so on.
Similarly, a claimant company may claim loss items from 1 or more transferor companies within the same group. The loss items transferred from the first transferor company must be fully deducted from the assessable income of the claimant company before loss items from a second transferor company can be deducted.
When the transferor company is unable to ascertain the exact number of claimant companies to transfer its loss items to because the tax positions of the transferor/ claimant have not been finalised yet, the company may specify a list of claimant companies even though the combined provisional assessable income of these claimant companies may exceed the provisional quantum of loss items available for set-off.
Similarly, the claimant company may specify a list of transferor companies even though the combined provisional quantum of loss items of the transferor companies available for set-off is higher than the provisional assessable income of the claimant company.
When the priority list submitted by the transferor company is inconsistent with the list submitted by the claimant company, the order of priority specified by the transferor company takes precedence.
To claim Group Relief, companies must:
To substantiate your Group Relief claim, ensure you maintain the following records:
At Apexia, we offer tailored solutions to help businesses navigate the Group Relief process. Our services include:
With Apexia's expertise, your business can efficiently manage tax liabilities while ensuring compliance with Singapore's tax regulations.
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