Recently, the Inland Revenue Authority of Singapore (IRAS) issued an e-Tax Guide (the Guide) on 27 October 2015, which explains how the rules stated in the case of: Comptroller of Income Tax v. BBO ([2014] SGCA 10) (BBO case) are applied to determine the tax treatment of gains derived from the disposal of investments of insurers.
The Guide, which takes effect immediately from the date of issuance, is relevant to a person, including a partnership licensed under the Insurance Act to carry on insurance business in Singapore. IRAS has taken the view that all investments of an insurer are revenue assets as investment activities are an integral part of the insurance business of an insurer. Therefore, all investment returns of the insurance business, including dividends, interest, rental and gains from the disposal of investments, are revenue in nature and thus taxable.
