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The
carry-back relief system
With
effect from YA 2006, new Carry-back Relief System allows:
- Only unabsorbed
capital allowances and losses for the current year can be carried back
to the immediate preceding Year of Assessment (YA), subject to a maximum
cap at S$100,000.
- The carry-back
of unabsorbed losses and capital allowances must meet the continuity
of ownership test. Where there is a substantial change in the shareholders
and the change is not to derive any tax advantage, an application can
be made to the Comptroller of Income Tax to waive the requirement.
- The order
for unabsorbed capital allowances and losses to be utilised is: firstly,
current year unabsorbed capital allowances; and secondly, current year
unabsorbed trade losses.
- Investment
income under section 10E of the Income Tax Act, losses incurred in approved
start-up companies under the Enterprise Investment Incentive scheme,
and losses from a trade or activity that are wholly exempted from tax
are excluded from the carry-back relief system.
For detailed
carry-back relief system, Please click here.
Click here
for IRAS seminar on tax changes in Budget 2005
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