When an independent report is required
The guide requires an appropriate independent valuation where qualifying acquisition expenditure is at least S$10 million for a related-party transaction or S$40 million for an unrelated-party transaction. The report and prescribed declaration accompany the return for the first YA qualifying for writing-down allowances. A business acquisition or bundled-intangible purchase needs an allocation between qualifying rights and other assets. The eligible amount cannot simply exceed open-market value because the parties agreed a higher price.
What the report should demonstrate
The report documents the valuation purpose, date, methods, assumptions, risks, inputs and conclusion, as well as the valuer’s credentials and potential conflicts. Forecasts and economic life should relate to rights actually acquired, not new rights expected from future research. Customer lists and relationships in a bundled valuation require separate treatment. Disposal below open-market value can also lead to a substituted value and a taxable recovery capped by allowances previously granted. A reproducible valuation trail is therefore needed beyond the original acquisition.
Official source
A concise, independent Apex Gateway guide based on the official English source, not a reproduction of the complete document. Consult the original for full conditions, exceptions and subsequent updates.
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