From November 2020 to April 2021, there have been three reported decisions by the High Court (HC) and Court of Appeal (CA) involving tax controversies with the Inland Revenue Authority of Singapore (IRAS). Two of these decisions by the HC involved disputes under the Income Tax Act (ITA). The first case pertained to the application of the general anti-avoidance provision in s 33 of the ITA, and the second case concerned the taxability of an employee’s severance payment under s 10(2)(a) of the ITA.
The final case relates to a decision by the CA concerning the assessment of property tax, and the interpretation of the terms “article” and “machinery” under s 2(2) of the Property Tax Act (PTA). The CA also made some observations on the relevance of material such as unenacted legislative amendments and administrative guidance to statutory interpretation.
While these cases involve different areas of tax law, they serve as a reminder to taxpayers that the courts will not accept an interpretation of the relevant tax legislation which would stretch its meaning beyond what its language and context can reasonably bear. Taxpayers should also bear in mind that the determination of whether they come within the scope of the relevant tax legislation ultimately requires a factual analysis.