Taxation on Serviced Apartment Rental Income

The Income Tax Board of Review has ruled that rental income of a serviced apartment operator should be treated as normal recurrent business income and not as income fr property investments. Thus operators can claim deductions on expenses and capital allowances, which were previously not allowed by IRAS under Section10E.

Section 10E states that a business which makes investments, including the 'letting of immovable property', cannot claim deductions on expenses and capital allowances beyond the actual income for the year.

Serviced apartment operators were also not allowed to carry over their losses to the following year, which are generally allowed for ordinary businesses and for hotels.

IRAS has filed an appeal against the decision to the High Court.

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