Tax residency certificate issued by Singaporean authorities is ...

Actual operating entity with commercial activities in Singapore disputes tax evasion, treaty shopping allegations.

Case Laws     Income Tax

September 13, 2024

Tax residency certificate issued by Singaporean authorities is statutory evidence of the company's residency, and the burden lies on the Revenue authorities to establish that the entity was formed solely to avail tax treaty benefits without any actual economic activity. The company was incorporated in 1996, and the relevant investments were made in 2012, 16 years later. The company is an actual operating entity conducting regular business, generating revenue from sale of goods, employing staff, and recognized by Singapore's Economic Development Board as the Asia Pacific headquarters and regional trading hub. The company has consistently filed returns in India and availed treaty benefits for several years without objection from the tax authorities. Without assigning reasons for deviating from the rule of consistency, the Dispute Resolution Panel could not sustain the draft addition alleging tax evasion and treaty shopping. The assessee's submissions establish that the transaction was a long-term investment decision by an entity with sufficient operational structure in Singapore.

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