Singapore: Tax treatment of appropriation of trading stock and conversion of non-trade/capital assets

A new e-tax guide on tax treatment of appropriation of trading stock and conversion of non-trade/capital assets

A new e-tax guide

The Inland Revenue Authority of Singapore (IRAS) released a new e-tax guide—Tax Treatment on Appropriation of Trading Stock for Non-Trade or Capital Purposes and Conversion of Non-Trade or Capital Assets to Trading Stock—that provides details on the income tax treatment when trading stock held by businesses is appropriated for non-trade or capital purposes and when non-trade or capital assets are converted to trading stock.

Its release follows the insertion of section 10J of the Singapore Income Tax Act 1947 that applies to an appropriation of trading stock for non-trade or capital purposes and section 32A of the Income Tax Act that applies to a conversion of non-trade or capital asset to trading stock, both of which came into effect on 16 November 2021.

KPMG observation

Prior to the introduction of section 10J, the Comptroller of Income Tax may have in certain instances taxed the notional gains arising from the appropriation of trading stock.

Read a May 2022 report [PDF 292 KB] prepared by the KPMG member firm in Singapore 


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