Do Singapore’s Group Relief Rules Breach the Non-Discrimination Article in the Singapore-United Kingdom Income Tax Treaty?

Abstract

In this article, the author examines the relationship between the group relief rules under Singapore’s domestic income tax law and the non-discrimination rules in the Singapore-United Kingdom Income Tax Treaty. He submits that the group relief rules are in breach of article 25(3) and 25(1) of the treaty – the so-called “foreign ownership” and “nationality” paragraphs, based on article 24(5) and 24(1), respectively, of the OECD Model Tax Convention, but that article 25(5) of the United Kingdom treaty absolves Singapore from the breach in both instances. The article closely examines the text of the treaty, the OECD Commentary on Article 24 of the OECD Model, the United Kingdom Court of Appeal decision in FCE Bank plc v. Revenue and Customs Commissioners, and Singapore’s position (first published in 2014) on the non-discrimination article.