Exposure Draft on Deferred Tax

Current practice
Companies must state if they intend to rent out or sell the property in future. Appropriate taxes are then applied ie. 17% deferred tax on rental income or 0% on capital gains from disposal of properties.

Proposed change
The respective country’s capital gains tax would be applied to all properties.

Assessed impacts

  • Since Singapore has no capital gains tax, past and future deferred tax provision would not be necessary before the end of 2010. 
  • Net asset values of property firms could go up by 5 to 8% as per Mr Choo Eng Beng, PwC. Share price of property firms could subsequently go up too due to higher valuation.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s