Hong Kong – Global Investment Law Watch

Singapore Tax: Implications of Section 10L on Investment Funds

Mar 14 2024

By: Edward Bennett, Roberta Chang, Anita Zhou and Ke Jia Lim

Historically, Singapore has not taxed capital gains. However, since 1 January 2024, under the newly enacted Section 10L of the Income Tax Act 1947 of Singapore, gains received in Singapore from the sale or disposal of any foreign asset (e.g. shares issued by a company incorporated outside Singapore) by an entity within a multinational group will be treated as taxable income if the entity does not have adequate economic substance in Singapore. Section 10L is designed to address international tax avoidance risks and align the key areas of Singapore’s tax regime with international norms and the European Union’s Code of Conduct Group’s foreign source income exemption (FSIE) guidance.

United States: PCAOB’s Vacating 2021 Determination under HFCAA Lowers the Risk of Delisting

Dec 22 2022

By: Yuki Sako and Michael G. Lee

On 15 December 2022, the Public Company Accounting Oversight Board (PCAOB) announced that it was able to secure complete access to inspect and investigate audit firms in China. From September to November 2022, PCAOB staff members “conducted on-site inspections and investigations in Hong Kong…thoroughly testing all aspects of the agreement necessary to assess whether [Chinese] Authorities would allow complete access.” The PCAOB’s inspections and investigations were pursuant to a written agreement, called the Statement of Protocol, which the PCAOB entered into with Chinese authorities on August 26, 2022. The PCAOB concluded that Chinese authorities “did not obstruct the PCAOB’s ability to inspect and investigate completely, consistent with U.S. law.” Consequently, the PCAOB decided to vacate its previous December 16, 2021 determination, made pursuant to the Holding Foreign Companies Accountable Act (HFCAA), that positions taken by China prevented the PCAOB from inspecting and investigating firms headquartered in mainland China and Hong Kong completely.

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