Latest Updates

• Update paragraph 2.2 and FAQ 10.1 to clarify that TAM as described under paragraph 5 is the default method to be applied.
• Update paragraph 2.3 on the effective date of aligning the methodology for TAM.
• Update paragraph 3.2 to clarify that:
  • Specific interest expense includes interest expense arising from ROU assets treated as sale agreements for tax purposes (including assets under hire purchase agreements).
  • Interest expense for the purpose of TAM excludes non-deductible interest expense and interest expense on ROU asset regarded as an operating lease or a finance lease not treated as a sale agreement for tax purposes. Footnotes 1 and 2 are added.
• Update footnote 6 in paragraphs 5.1 and 5.4 to clarify the value of the cost of assets to be used for the purpose of TAM.
• Update footnote 7 in paragraphs 5.1 and 5.4 to clarify the meaning of total assets and cost of total assets.
• Update paragraph 8, add footnote 9 and update footnote 10 for consequential changes arising from the adoption of FRS 109 tax treatment.
• Add new FAQ 10.8 to clarify that interest expense includes foreign exchange differences on interest incurred for the purpose of TAM.
• Add new FAQ 10.9 to clarify the costs to be excluded from the denominator of TAM formula.
• Add new FAQ 10.10 to provide more examples of non-financial assets that are not covered under FRS 109 as mentioned in paragraph 8.1.

The e-Tax guide has been updated with the following changes:

• Renumbered section 5(2) and section 17(2) of the EEIA as section 5(3) and section 17(3) of the EEIA 1967 in paragraph 4.1; and
• Renamed “EEIA” as “EEIA 1967” to reflect the revised title of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 effective from 31 Dec 2021.

The e-Tax guide has been updated with the following changes:

• Renumbered sections 5(2), 17(2), 10(3A) and 10(3A)(b) of the EEIA as sections 5(3), 17(3), 10(4) and 10(4)(b) of the EEIA 1967 in paragraphs 1.1, 3.1 and 3.3;
• Renamed “EEIA” as “EEIA 1967” to reflect the revised title of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 effective from 31 Dec 2021; and
• Renamed ITA” as “ITA 1947” to reflect the revised title of the Income Tax Act 1947 effective from 31 Dec 2021.