Currently, Singapore's tax law allows a body of persons, deemed to be carrying on a business under section 11(1) and section 11(2), to carry forward its unutilised Capital Allowances (CAs) and trade losses to offset future incomes (i.e. loss carry-forward).
With effect from Year of Assessment (YA) 2006, losses of up to $100,000 incurred by the body of persons in the current year can be carried back for one year. The main features of this scheme are:
- Only current year unutilised CAs and trade losses will be allowed the carry-back for one YA immediately preceding the YA in which the CAs were granted or the trade losses were incurred.
- An aggregate amount of $100,000 of current year unutilised CAs and trade losses can be carried back.
- The current requirements for carry-forward of unutilised CAs and trade losses will similarly apply when these amounts are carried back - i.e. carry on the same trade or business.
- The carry-back will be given on due claim.
For more details, please refer to the e-Tax Guide on Carry-Back Relief System (263KB).
To claim the carry-back relief, please submit the Election Form ( 47 KB) as mentioned in paragraph 49(c) of the above e-Tax Guide.
Enhanced carry-back relief for YA 2009 and YA 2010
As announced in the 2009 Budget Statement, the loss carry-back relief scheme will be temporarily enhanced for YAs 2009 and 2010.
The enhancements are as follows:
- Current year qualifying deductions will be carried back up to three YAs immediately preceding that YA in which the capital allowances were granted or the trade losses were incurred;
- The order of setoff of qualifying deductions to the three immediate preceding YAs will be first to the third YA, followed by the second YA, and then the YA immediately preceding the YA in which the capital allowance were granted or the trade losses were incurred. Example: YA 2009's unutilised trade losses will be first offset against income derived in YA 2006, followed by YA 2007 and YA 2008.
- The limit on the aggregate amount of current year qualifying deductions that can be carried back will be increased from $100,000 to $200,000.
For details, please refer to e-Tax Guide, Enhanced Carry-back Relief System (263KB)
Body of persons wishing to claim the enhanced loss carry-back relief, must submit the new Election Form for Loss Carry-back (For Years of Assessment 2009 and 2010) (69KB)