Corporate Tax Guide: Claiming Group Relief in Singapore

Staff Writer

January 25, 2022

What’s in the article?

Among the numerous benefits you get in Singapore as a group of companies is what the IRAS calls “group relief”. This scheme allows you to take advantage of various tax benefits along with other companies in your group. 

It’s worth noting, however, that it comes with specific conditions. 

And to find out more about them, you might want to read this through to the end. This guide provides all the basic details regarding Singapore’s group relief scheme - from its definition to IRAS’s qualification conditions, as well as the procedure for applying for group relief in Singapore. 

What is Group Relief?

Group relief, for starters, is a scheme that allows registered groups of companies to knock off a specific company’s donations, trade losses, and capital allowances from the assessable income of another company in the same group. In simple terms, group members get the privilege of transferring such losses between their taxable incomes. 

And why is that? 

Well, the thing is, Group Relief consolidates all the entities that belong to the same group, and subsequently, treats them as one single company. As such, the member companies can freely share “loss items” between themselves. 

According to Group Relief IRAS, transferable group relief “loss items” include; 

  • Current year unutilized donations.
  • Current year unutilized trade losses.
  • Current year unutilized capital allowances

Basically, the company that offsets its loss items is known as the “transferor”, while the company that subsequently takes up the loss items is known as the “claimant”. 

As long as the transferor and claimant belong to the same group of companies, the transferor can go ahead and shift its loss items to the claimant, which then proceeds to deduct the transferred items from its assessable income. 

Qualifying for Group Relief

As it turns out, though, the group relief privilege isn’t for everyone. The transferor and claimant must meet the following conditions to be approved by the IRAS: 

  • Both companies should have the same financial year-end. 
  • Both entities should be in the same group of companies, within which they are required to keep a shareholding threshold of 75%. 
  • Both companies should have been fully registered and incorporated in Singapore. 

How to Apply for Group Relief

The procedure for applying for Singapore’s group relief is pretty straightforward. 

Here’s the step-by-step breakdown:

  • The transferor company is required to fill in GR Form A (Form GR-A) and then submit it to the IRAS, along with their income tax returns for that particular year of assessment.
  • The claimant company, on the other hand, should fill in GR Form B (Form GR-B), and then submit it along with income tax returns for the same year of assessment as the transferor company. 
  • Both Group Relief forms should be carefully checked before you proceed with your income tax filing. That’s because you won’t be able to change the details after submission. 
  • The IRAS only allows you to submit a revised Group Relief form after it issues a special Notice of Assessment (NOA) that expresses a shift in your company’s overall tax position - from a loss to a taxable position or vice versa. 

How to Get Started

If this sounds like something you’d want to take advantage of, you can get started by talking to us. Our Singapore tax experts will help you plan and minimize your corporate income taxes by capitalizing on not just the Group Relief, but also many other tax relief schemes in the city-state.

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