Economic substance determines taxability of foreign disposal gains; Singapore rulings extend exclusion to entities with genuine local operations.
Taxability of foreign disposal gains depends on demonstrable economic substance and classification as an excluded entity. The IRAS rulings accept that both a Pure Equity Holding Entity with local management, filings, premises and staff, and a non PEHE with substantial Singapore operations and board decision making, can satisfy the economic substance safe harbour and avoid treating remitted disposal gains as taxable income for specified assessment periods. (AI Summary)