Income Tax (Adjustment for Change of Basis of Computing Profit, Loss or Expense of Financial Instruments resulting from FRS 109 or SFRS(I) 9) (Amendment) Regulations 2023

The Income Tax (Adjustment for Change of Basis of Computing Profit, Loss or Expense of Financial Instruments resulting from FRS 109 or SFRS(I) 9) (Amendment) Regulations 2023 were published on Singapore Statutes Online, the website of the Singapore government for publicizing legal documents. The regulations modify the corresponding 2020 regulations, namely the Income Tax (Adjustment for Change of Basis of Computing Profit, Loss or Expense of Financial Instruments resulting from FRS 109 or SFRS(I) 9) Regulations 2020 which set out the computation methodology for determining profits and losses of financial instruments for purposes of reporting such (at fair market value or at amortized cost) under Singapore’s Financial Reporting Standard 109 which is the equivalent of the International Financial Reporting Standard (IFRS) 9.
The modifications are minor in nature and concern regulation 2 and regulation 3 of the 2020 regulation. Specifically, the modifications entail
– the replacement of “Accounting Standards Council” with “Accounting Standards Committee” in the definition under regulation 2, paragraph 1;
– the replacement of various references to „Part III of the Accounting Standards Act” with “Part 3 of the Accounting Standards Act 2007” also in regulation 2;
– the replacement of various references to the Accounting Standards Act in connection with the „Tax treatment for reversal of impairment loss“ (regulation 3, paragraph 4) and the „Tax treatment for provision by bank and qualifying finance company for expected credit loss and allowance for non‑credit‑impaired loans and investments in securities that are not credit‑impaired“ (regulation 3, paragraph 7); and
– the replacement of regulation 3, paragraph 8 with the following:
>In this regulation, “bank”, “loan”, “MAS notice”, “prescribed value of loans and investments in securities”, “qualifying finance company” and “securities” have the meanings given by section 14G(7) of the Act.”
In this context, it may be valuable to review the guidance issued by the *Inland Revenue Authority of Singapore (IRAS) on March 27, 2023, which seeks to provide assistance to firms in the application of FRS 109.