Book Review

• Date: 01 December 2012
• Published date: 01 December 2012
• Author: Andrew HALKYARD LLB (Hons) (Australian National University), LLM (University of Virginia); Barrister at Law (Supreme Court of New South Wales); Adjunct Professor, Faculty of Law, University of Hong Kong; Visiting Professor, ATax, UNSW; Senior Research Fellow, Taxation Law and Policy Research Institute, Monash University.

Pok Soy Yoong, Ng Keat Seng & Steven Timms eds

1 This is a vast book, both physically and in scope, on the technical aspects of income tax in Singapore. It starts conventionally with “Framework of Interpretation in Tax”1 and ends, again conventionally, with “Income Tax Objections and Appeals”.2 Nearly one-third of the book, however, is devoted to less well-trodden topics – but which relate to crucial aspects of Singapore's income tax system and economic policy – including “Corporate Restructuring, Mergers and Acquisitions”, “Capital Market Transactions”, “Taxation of Hedge Funds and Private Equity Firms”, “Unit Trusts”, “Banking Operations”, Financial Derivatives” and “Wealth Management for Individuals”.3 In short, it is the breadth of coverage, together with the wealth of experience brought by the editors (each having decades of high level and high exposure practice in a “big 4 accounting firm” (Pok and Timms) and tax administration (Ng, a former Deputy Commissioner and current Senior Consultant with the Inland Revenue Authority of Singapore) (“IRAS”)), their team of expert authors (from the public sector, private practice and the Singapore Academy of Law), and the clear enthusiasm of the IRAS for the publication,4 that makes The Law and Practice of Singapore Income Tax such a valuable resource for anyone interested in Singapore's income tax law, practice and policy.

2 Given the number of authors (30) and chapter headings (24), it may be trite to initially observe that the length and coverage of individual chapters give the impression that the book aims to be more encyclopaedic in nature, rather than a concise practical guide to the law and practice of Singapore income tax. For instance, in “Framework of

Interpretation in Tax”,5 does the reader need to know how to parse a statute? If so, then one can be fairly confident that this person will not be studying the chapters on taxation of derivatives and other financial instruments. This presents a paradox, since an encyclopaedia is captive to its individual entries and, frustratingly, it is not easy to peruse the contents to discover certain basic information such as Singapore's tax year (1 January to 31 December), let alone its jurisdiction to tax (source plus, in certain instances, remittance). For a Singaporean reader, these matters might be dismissed as simply too obvious. However, a short introductory chapter on the basic framework and key elements would be useful, certainly from the perspective of a comparative reader.

3 Yet, the encyclopaedic approach taken in many chapters of this book is often very satisfying. For instance, assume the reader is seeking guidance on the source of income from a business or trade. Singapore case law is notably lacking in this area (only two cases have been reported). However, “Case Law Guidance on Source of Business and Trade Income”6 fills the gap by providing extensive analysis of comparative case law from common law jurisdictions including Hong Kong, Australia, India and South Africa, and concludes with the regularly stressed, but often forgotten, caveat that “similar [legislative wording] does not mean the same”.7 Given the huge international interest (including the US8) in debating the merits of residence versus source taxation, it is instructive to ponder the conclusions reached in this chapter that: “[i]n the vast majority of cases, the source of the business income is located where the business is carried on, which is the natural home of the income”9 and, accordingly, the opportunity for apportioning business profits between a Singaporean source and a non-Singaporean source for a person resident in Singapore “will be the exception rather than the rule”.10 This raises the intriguing question of just how “pure” Singapore's source jurisdiction to tax really is and whether concerns regarding this matter could be better analysed by reference to concepts of residence11 or transfer pricing methodology?12

4 The comparative and encyclopaedic themes noted above permeate this book. For instance, “Capital and Revenue Divide – Receipts”13 contains a detailed discussion of the common law authorities (taken mainly from the UK and Australia) on the meaning of “trade”, “business”, “ordinary income” and “capital gain”. Occasionally, however, the discussion is overly punctuated by lengthy quotations from both local cases14 and overseas cases.15 This has a role in a cases and materials publication, but its limitations are obvious when little or no commentary is given to topics that would seem contentious (such as the applicability of Sharkey v Wernher16 in Singapore, which could operate to tax unrealised gains even when the general anti-avoidance provision17 did not apply).

5 Other important features of the book include the extended commentary given to local case law (for example, ch 3 dealing with the dichotomy between receipts on capital and revenue account), IRAS practice (for example, ch 6 dealing with capital allowances, which sets out the guidelines adopted by the IRAS as to what constitutes “plant” and ch 12 on the IRAS' views on the meaning of “research and development” for the purposes of obtaining concessionary tax treatment) and its interdisciplinary nature (for example, ch 5 dealing generally with the relevance of accounting principles and practices in determining taxable income and chs 15 and 16 analysing, respectively, the impact of relevant accounting standards on the tax treatment...