Businesses before amalgamation
Singapore companies A and B both operated the anonymised X business. A held licences for types 1, 2 and 3 works; B held a licence for type 3 works. Both earned contract revenue from X. B had continued and would continue its type 3 service business until the intended amalgamation date.
The continuing company’s activities
B would merge into A under section 215 of the then Companies Act. After amalgamation A would continue all three types of X works, service contracts taken over and carry on B’s business. The question was whether A’s income arose from the same trade as B’s immediately before amalgamation, allowing B’s unabsorbed losses and investment allowances to be used.
The permitted set-off and remaining conditions
IRAS allowed those unabsorbed items against A’s income under section 34C(25) and regulation 13(5) of the Amalgamation Regulations. This remained conditional on applicable requirements in sections 34C(23) and 34C(24) and regulation 13(2). The source does not state that all those separate requirements had been unconditionally waived or that any merger automatically transfers tax losses.
Reasoning and further source sections
Immediately before amalgamation, A already carried on the same X trade as B, despite A’s wider licence range. A’s relevant income was therefore from that same trade for section 34C(25). The source refers to the corporate-amalgamations guide, paragraphs 6.12 and 6.13 and Annex A items D1 and D4, for the conditions governing use of the disappearing company’s unabsorbed items.
Historical scope
Summary 9/2021 was published on 2 August 2021 using the then Income Tax Act, Chapter 134, 2014 Revised Edition. The anonymised work types do not identify a particular commercial sector. It binds only its applicant and transaction and is not updated to incorporate subsequent legal changes.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
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