Tax Deduction for Impairment and Loss Allowance
22 Feb 2018


Under Sector 14I of the Income Tax Act (ITA), banks and qualifying finance companies can claim a tax deduction for impairment losses on non-credit impaired loans and debt securities made under FRS109 and any additional loss allowances as required under MAS Notices 612, 811 and 1005, subject to a cap.

The tax deduction under Section 14I is scheduled to lapse:

  • after YA 2019 (for banks and qualifying finance companies with December financial year end); or
  • after YA 2020 (for banks and qualifying finance companies with non-December financial year end).

Proposal

To promote the overall robustness and stability of the Singapore financial system, the tax deduction under Section 14I of the ITA will be extended till YA2024 (for banks and qualifying finance companies with December financial year end) or YA2025 (for banks and qualifying finance companies with non-December financial year end).

All other conditions of the scheme remain unchanged.

Further details will be released by MAS by May 2018.


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