Edition and three ways to use balances
Third edition 30 January 2026, following 29 June 2012 and 7 February 2023. Companies may transfer current unused allowances, trade losses and donations through group relief, carry balances forward, or carry current allowances/losses back. Ordinary carry-back covers the immediately preceding YA; the enhanced three-YA version applies only to YAs 2020 and 2021. This guide consolidates the earlier 1993, 1995 and 2004 guidance, including evidence formerly discussed in auditor/secretary certificates.
Definitions and which tests apply
Assessable income is all-source income after capital allowances, losses, approved donations and relevant further deductions such as incremental R&D/investment allowances. Unabsorbed allowances exceed aggregate taxable income; unabsorbed trade losses exceed all-source income; unused approved donations exceed statutory income. The allowance definition covers sections 16, 17, repealed 18A, 18B, 18C, 19, 19A–19D and 20. Same-business test means continuing the trade/business for which allowances arose. Shareholding continuity means the same persons hold at least 50% of total issued shares of the company or ultimate parent at both relevant dates.
Forward versus back: time and amount limits
Forward: allowances require same-business and shareholder tests; losses and donations require shareholder test only. Allowances/losses have no time or amount cap; donations expire after five years. Back: current allowances require both tests, losses shareholder test only, and donations are ineligible. Deduction is the lower of available current allowances/losses and prior assessable income, capped at S$100,000. Ordinary one-year versus historical three-year periods do not create a carry-back right for donations.
All relevant date comparisons
Forward allowances: last day of originating YA versus first day of utilisation YA. Forward losses/donations: last day of the year incurred versus first day of utilisation YA. Back allowances: first day of originating YA versus last day of immediate preceding YA. Back losses: first day of the year incurred versus last day of immediate preceding YA. Thus losses incurred in 2025 or allowances granted for YA 2026 normally look back to YA 2025, but their shareholder comparison dates differ.
Example 1: all forward items pass
A uses YA 2022 balances, basis year ending 30 September 2021, against YA 2025. At 31 December 2021 / 31 December 2022 / 1 January 2025, A holds 15/10/10 shares, B 45/50/0, C 40/40/40, D 0/0/50, with 100 total each date. Allowances compare 2022 year-end with 2025 first day; losses/donations compare 2021 year-end instead. A and C retain at least 50% at the relevant dates, so all shareholder tests pass.
Example 2: all forward items fail
Same years but holdings A 30/30/30, B 30/70/10, C 40/0/0, D 0/0/60 out of 100. Allowances compare 31 December 2022 / 1 January 2025; losses/donations 31 December 2021 / 1 January 2025. Continuing A/B own only 40% on the latter date, so every category fails without waiver. Continuing shareholder identities alone are insufficient if their percentage drops below 50%.
Example 3: carry-back passes
B carries YA 2025 balances, basis year ending 30 September 2024, to YA 2024. On 1 January 2024 / 31 December 2024 / 1 January 2025, A holds 30/30/30, B 30/70/70, C 40/0/0 out of 100. Allowances compare 1 January 2025 and 31 December 2024; losses compare 1 January 2024 and 31 December 2024. A/B hold at least 50% at both respective comparisons; the tests pass.
Evidence for publicly listed companies
Where the company or ultimate parent is actively traded on a recognised local/foreign exchange, provide the PLC external auditor’s or company secretary’s confirmation that no merger/takeover occurred between relevant dates inclusive. If unable and reasons explained, the Comptroller may accept its audit committee, financial controller or director confirmation. For foreign companies an equivalent committee/person required by their law is acceptable; Singapore listed companies have a section 201B audit committee.
Evidence for non-listed companies
If neither company nor ultimate parent is publicly listed, provide ultimate-shareholder names and holdings at relevant dates demonstrating the test, or external-auditor/company-secretary confirmation of no substantial ultimate-owner change. If unable with an explanation, the Comptroller may accept audit-committee, financial-controller or director confirmation. This is an alternative evidence route, not an unconditional exemption from the test.
Waiver grounds and all eight required particulars
Failure normally means the unused items are disregarded. Apply if the change is not tax-benefit/tax-advantage motivated. Examples include nationalisation, privatisation, ordinary recognised-exchange trading and genuine commercial rescue; the list is not exhaustive. Provide: change/takeover date; commercial and non-commercial reasons; takeover-company advantages; applicant net worth; share price and valuation basis; reasons for price/net-worth mismatch; future plans, implementation or reasons not implemented; and activities of acquirer/common-control companies transferred or planned for transfer into applicant.
Apply early, use after waiver and PIC FAQ
A waiver application may precede actual utilisation: long delay makes records harder to retrieve. Once granted, allowances/losses offset only profits of the same originating business, while donations may offset statutory income but retain five-year expiry. Legacy unused PIC claims follow their allowance or trade-loss category and its forward/back conditions; this does not revive fresh PIC claims. Other non-tax-motivated changes outside the examples can still be submitted for individual consideration.
Contact and amendment history
The guide lists 1800-3568300 for individuals and 1800-3568622 for corporate enquiries. The 2012 consolidation removed the 1993 paragraph on pre-1988 balances after twenty-four years; 2023 distinguished ordinary/enhanced carry-back, renumbered section 37D and clarified donations after waiver; 2026 changed the general disclaimer. Historical enhanced relief remains restricted to YAs 2020–2021.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗