'Substance' – A Singapore's perspective

One of the principles underpinning the OECD Base Erosion and Profit Shifting (“BEPS”) project is the concept of “substance”. Taxation is to be aligned with substance so that profits are being taxed in the location where value is created. However, what constitutes “substance” has not been clearly def...

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Main Authors: WONG, Cindy Siu Ching, TANG, Siau Yan
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Language:English
Published: Institutional Knowledge at Singapore Management University 2019
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Online Access:https://ink.library.smu.edu.sg/soa_research/1845
https://ink.library.smu.edu.sg/context/soa_research/article/2873/viewcontent/SSRN_id3104981.pdf
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spelling sg-smu-ink.soa_research-28732020-05-27T07:48:21Z 'Substance' – A Singapore's perspective WONG, Cindy Siu Ching TANG, Siau Yan One of the principles underpinning the OECD Base Erosion and Profit Shifting (“BEPS”) project is the concept of “substance”. Taxation is to be aligned with substance so that profits are being taxed in the location where value is created. However, what constitutes “substance” has not been clearly defined. This paper seeks to examine the concept of substance as applied in different contexts and attempts to put forth a notion of substance that is relevant to Singapore. Having examined the subject matter, the authors are of the view that it is no longer sufficient to have “substance” as a vague guiding principle or a simple threshold test. In view of the recent development in international tax rules, the concept of substance requires a measure of economic realities in order to resolve international tax issues by some norm justified by some concept of proportionality. Such an analysis would necessarily be a multi-faceted and subjective one. In this sense, it is doubtful whether there will ever be a consensus internationally on what constitutes substance or an acceptable level of substance, and the implementation of this principle would not be void of conflicts. 2019-01-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/soa_research/1845 https://ink.library.smu.edu.sg/context/soa_research/article/2873/viewcontent/SSRN_id3104981.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Accountancy eng Institutional Knowledge at Singapore Management University Accounting Asian Studies
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Accounting
Asian Studies
spellingShingle Accounting
Asian Studies
WONG, Cindy Siu Ching
TANG, Siau Yan
'Substance' – A Singapore's perspective
description One of the principles underpinning the OECD Base Erosion and Profit Shifting (“BEPS”) project is the concept of “substance”. Taxation is to be aligned with substance so that profits are being taxed in the location where value is created. However, what constitutes “substance” has not been clearly defined. This paper seeks to examine the concept of substance as applied in different contexts and attempts to put forth a notion of substance that is relevant to Singapore. Having examined the subject matter, the authors are of the view that it is no longer sufficient to have “substance” as a vague guiding principle or a simple threshold test. In view of the recent development in international tax rules, the concept of substance requires a measure of economic realities in order to resolve international tax issues by some norm justified by some concept of proportionality. Such an analysis would necessarily be a multi-faceted and subjective one. In this sense, it is doubtful whether there will ever be a consensus internationally on what constitutes substance or an acceptable level of substance, and the implementation of this principle would not be void of conflicts.
format text
author WONG, Cindy Siu Ching
TANG, Siau Yan
author_facet WONG, Cindy Siu Ching
TANG, Siau Yan
author_sort WONG, Cindy Siu Ching
title 'Substance' – A Singapore's perspective
title_short 'Substance' – A Singapore's perspective
title_full 'Substance' – A Singapore's perspective
title_fullStr 'Substance' – A Singapore's perspective
title_full_unstemmed 'Substance' – A Singapore's perspective
title_sort 'substance' – a singapore's perspective
publisher Institutional Knowledge at Singapore Management University
publishDate 2019
url https://ink.library.smu.edu.sg/soa_research/1845
https://ink.library.smu.edu.sg/context/soa_research/article/2873/viewcontent/SSRN_id3104981.pdf
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