Purpose and qualifying loss items
The third edition dated 30 January 2026 explains section 37B group relief, available from YA 2003. Companies remain separate taxpayers, but a qualifying Singapore-incorporated company can transfer current-year unabsorbed capital allowances, trade losses and approved donations to another qualifying group company for the same YA. A transferor gives the items; a claimant deducts them against its available assessable income after its own allowances, losses, donations and other relevant deductions. Prior-year items cannot be transferred. Keeping items for future use or eligible carry-back remains possible, subject to the separate rules, but group relief is applied before loss carry-back.
The 75% group relationship
Both transferor and claimant must be incorporated in Singapore and belong to the same qualifying group at the basis-period end. One company must beneficially hold at least 75% of the other’s issued ordinary shares, directly or indirectly, or a third Singapore-incorporated company must hold at least 75% in each. Multiply interests through a chain and add distinct qualifying paths. In the main example, 90% followed by 90% gives 81% indirect ownership, while 90% followed by 75% gives only 67.5%. Ownership through a foreign-incorporated company, an individual or another non-company entity is disregarded. Common accounting consolidation or common personal ownership alone does not establish the statutory group.
Ordinary shares and equity holders
Ordinary shares for this test exclude treasury shares and shares carrying only fixed dividends, including a fixed amount, a fixed percentage of share value or a fixed percentage of profits. Shares with a fixed dividend plus variable residual-profit rights count; fixed-dividend shares with conversion or acquisition rights but no variable participation do not. A company without share capital cannot qualify on this shareholding basis. Equity holders include ordinary shareholders and creditors with non-commercial loans that participate variably in profits. A commercial loan provides only a fixed return, including a specified floating rate, and does not make the lender an equity holder.
The separate profits-and-assets test
Passing the share-number test is not enough. Ordinary shareholders must also be beneficially entitled to at least 75% of residual distributable profits and residual assets on winding up. Residual profits are measured after fixed dividends but before variable loan returns and dividends. Residual assets are net assets after commercial creditors and non-ordinary shareholders. Positive assets use actual notional winding-up distributions; absent profits or negative assets use S$100 notional amounts and the agreed sharing ratios. Loan rights and share values can therefore make an ordinary shareholder fail despite owning 75% of ordinary shares.
Annexes 1 and 2: ownership paths and the continuous period
Annex 1 gives nine structures. A local 90%–90% chain qualifies across all three companies; a foreign parent is excluded but its two local companies in a 90% parent-subsidiary relationship can qualify with each other. A local 90%–75% chain permits the direct relationships but not the 67.5% indirect one. Two wholly owned local subsidiaries holding 25% and 50% of another local company produce 75% aggregate indirect ownership. A 90%–80% chain produces 72%, and a branch of fixed-dividend-only shares breaks eligibility. Foreign-parent siblings, personally held siblings and a chain interrupted by a foreign company do not qualify; the mixed ninth diagram retains only the eligible local relationships. Annex 2 shows that restored 79%/100% ownership from 1 November to 31 March supports relief only for that final continuous period, ignoring an earlier qualifying interval broken by 66% ownership. Ending at 72% prevents relief entirely despite earlier qualifying periods.
Annex 3: why a 75% shareholder can fail or pass
Company A owns 750 of 1,000 qualifying ordinary shares in X, passing the 75% first-level test. X has a S$400 fixed-return loan and a S$500 loan with variable profit participation. After S$24 and S$16 fixed dividends, S$60 residual profit is shared across S$1,500 of ordinary equity and non-commercial loan principal. A receives S$30, only 50%, and fails; on S$1,200 positive residual assets with the S$500 lender paid first, A receives S$525, only 43.8%. If A itself holds that non-commercial loan, it receives S$50 of the S$60 profit (83.3%) and S$1,025 of S$1,200 assets (85.4%), and passes. With no profit and negative assets, the S$100 notional test similarly gives A 50% without the loan and about 83.3% with it. The source rounds the latter profit illustration to 83.4%; the structural result remains above 75%.
Matching accounting year ends
The transferor and claimant need the same accounting year end. A holding or intermediate company not itself transferring or claiming need not share that year end, although its ownership at the relevant dates still matters. Annex 4 contrasts aligning a loss company’s April year end to a July claimant, where earlier unmatched periods do not qualify, with aligning the claimant to April, where the post-acquisition period ending in April can qualify. A third case changes two companies to March: no YA 20X3 transfer is available while ends differ. In YA 20X4, A’s 304-day basis period and B’s 90-day period use 90 common days: A’s limit is 90/304 of its loss and B’s is its full 90/90 income. A and C use 304 common days, limiting C’s income to 304/365 and subtracting A’s earlier transfer to B. The source’s table says subtract a transfer to C at that step, but the stated priority and preceding calculation identify B as the earlier recipient.
Excluded activities and investment businesses
Foreign-branch losses, wholly tax-exempt activity losses and ring-fenced trade losses such as finance-leasing and motor-car-hiring items cannot be transferred. Investment allowance is not transferable. A section 10D investment business can claim incoming group relief but generally cannot transfer expenses and specified capital allowances exceeding its income-producing investment income where those items cannot be carried forward. It can transfer current-year unabsorbed donations and, from YA 2007, qualifying current-year industrial-building allowances under sections 16, 17, 18B and 18C. Do not assume that every excess expense in an investment company is a transferable trade loss.
Set-off order and mixed tax rates
Each company first uses brought-forward capital allowances from oldest to newest, current capital allowances, brought-forward trade losses from oldest to newest, current trade losses, brought-forward donations from oldest to newest, and current donations. Only then determine transferable current-year balances or the claimant’s available income. For S$100,000 adjusted profit, S$60,000 old allowances and S$35,000 current allowances, all current allowances are absorbed; the company cannot use old trade losses first to free S$35,000 for transfer. Transfer current allowances before current losses before current donations. Within a category, higher-rate items go first, with section 37A adjustments; claim against higher-rate income before lower-rate income. The claimant’s partial or startup exemption is computed after group relief, not used to reserve an exempt portion from relief. Transferred allowances remain allowances made to the transferor for later asset balancing adjustments. The guide states maximum exempt amounts from YA 2020 of S$102,500 under partial exemption and S$125,000 for qualifying startups; earlier figures of S$152,500 and S$200,000 belong to their earlier YA regimes.
Daily limits and multiple-company priorities
Let A be the shorter final continuous qualifying period, B the claimant’s total basis-period days, C its assessable income, D the transferor’s total basis-period days and E its available loss items. The transferable amount is the lower of A/B × C and A/D × E. For later counterparties, subtract amounts already claimed from other transferors from the claimant limit and amounts already transferred to other claimants from the transferor limit. Exhaust the first listed counterparty to the extent permitted before moving to the next; neither party may freely choose a smaller transfer merely to preserve an exempt amount. Remaining items stay with the transferor under their own carry-forward/carry-back conditions; donations have a maximum five-YA carry-forward period.
Annex 5 examples one and two: relief before exemption
Example one uses 17% normal and 10% concessionary streams. A absorbs S$70,000 allowances and S$150,000 losses against concessionary income with 17/10 adjustments of S$119,000 and S$255,000. It can transfer S$30,000 current losses and S$5,000 of S$8,000 donations to B, whose own deductions leave S$35,000 income; B is reduced to nil, while A retains S$3,000 donations and its S$30,000 investment allowance. Example two transfers C’s S$30,000 losses and S$8,000 donations to D’s S$235,000 income, leaving S$197,000 before exemption. Exemption is S$7,500 on the first S$10,000 plus S$93,500 on the next S$187,000, leaving S$96,000 chargeable at 17%, or S$16,320. The 2.5-times donation amounts and rate-adjusted transfers are illustrative calculations, not freely interchangeable nominal sums.
Annex 5 examples three and four: partial years and rates
In example three, E and F join the same group on 1 July, giving 184/365 of the year. Compare that fraction of E’s S$38,000 losses/donations with the same fraction of F’s S$35,000 income. Relief is S$15,123 losses plus S$2,521 donations. E retains S$14,877 losses and S$5,479 donations; F has S$17,356 before exemption, S$6,178 after exemption and tax of S$1,050.26. The source’s S$70,000 allowance line is shown within a cross-stream offset calculation and must not be separately treated as an additional transferable balance. Example four transfers G’s allowances of S$70,000 at normal rate and S$29,750 at concessionary rate, the latter worth S$17,500 against H’s normal income. S$47,500 normal-rate losses exhaust H’s S$135,000 normal income. H’s S$390,000 concessionary income then absorbs S$12,500 normal-rate losses adjusted to S$21,250, S$20,000 same-rate losses, S$8,000 normal-rate donations adjusted to S$13,600 and S$2,000 same-rate donations, leaving S$333,150 at 10% and S$33,315 tax.
Annexes 6 and 7: coordinating opposing priorities
In Annex 6, A, B and C have losses of S$30,000, S$200,000 and S$75,000; D, E and F have income of S$80,000, S$95,000 and S$45,000. A and B list D/E/F, while C lists E/F/D. D lists B/A/C, E lists C/B/A and F lists A/C/B. The resulting transfers are B→D S$80,000; C→E S$75,000; B→E S$20,000; A→F S$30,000; and B→F S$15,000. All claimant income and A/C losses are absorbed; B retains S$85,000. Annex 7 shows a circular conflict: A prefers C then D, B prefers D then C, C wants B before A and D wants A before B. When all preferences cannot be honoured, transferor priorities prevail, so A goes to C first and B goes to D first. This is a conflict-resolution rule, not permission to ignore a workable claimant priority in every case.
Form C elections and fixed counterparty lists
Both parties must e-file Form C, not Form C-S or C-S (Lite), and complete the group-relief election by the tax filing deadline. The transferor completes GR A and the claimant GR B within Form C: enter the amount in Assessment and the details in Group Relief. Missing either required section disqualifies relief. Elections and listed priorities are final and irrevocable. Provisional lists may include additional counterparties beyond the initially expected usable amounts to accommodate later assessment changes, but priority cannot later be rearranged. ECI may include provisional group relief without GR forms at that stage. Once assessments are revised, IRAS adjusts transfer amounts using the existing lists; revised GR forms are not normally needed solely for those amount changes.
When assessment reverses profit and loss positions
If a company originally reported income but its completed assessment shows transferable loss items, it can become a new transferor. It must submit GR A and its claimants GR B within two months of that assessment notice. Existing claimants may append the new transferor only after their original listed transferors. Conversely, a loss-reporting company assessed with income can become a new claimant: its GR B and counterparties’ GR A are due within two months; its earlier GR A is set aside, and existing transferors may add it only after their original claimants. Failure by either side to meet the two-month requirement prevents the new transfer. This limited assessment-driven procedure does not permit a voluntary rearrangement where the tax position has not changed.
Long first accounts, compensatory payments and anti-avoidance
A newly incorporated company with first accounts longer than twelve months must apportion income/losses to the respective YAs before calculating relief. For accounts from 1 June 20X7 to 31 December 20X8, split YA 20X8 and YA 20X9 and submit the YA 20X9 return, full accounts, both tax computations and applicable GR forms by 30 November 20X9. A claimant need not compensate the transferor, but if it does, the payment is not deductible for the claimant and not taxable for the transferor. IRAS can reassess excessive relief, including acquisition arrangements intended to access pre-acquisition losses recognised only afterwards.
Final checks and changes in this edition
Annex 8 highlights under-transferring despite sufficient income, moving to later claimants before exhausting the first, transferring prior-year items, failing to prorate different qualifying periods, foreign/non-company interruptions in ownership, tax computations inconsistent with GR priorities, unlisted claimants and missing GR forms. Recheck both sides and use Form C. The 2026 edition updates renumbered law, removes repealed incentive references, updates exemption amounts and electronic filing, and adds long-first-account and common-error sections. The guide’s enquiry number is 1800 356 8622. Keep supporting ownership rights, group-period dates, accounting dates, tax-rate adjustments and matched GR schedules with the calculation.
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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