Singapore Published Guide On IP Rights Valuation Report

The Inland Revenue Authority of Singapore (IRAS) published an e-Tax Guide on the Intellectual Property Rights (IPRs) Valuation Report. This Guide is aimed at coaching taxpayers when the taxpayers should submit an independent valuation report on qualifying IPRs for the purposes of Section 19B of the Income Tax Act (ITA).

Qualifying IPRs

Under Section 19B of ITA, a company may claim writing-down allowances (WDA) on the capital expenditure incurred on the acquisition of IPRs for use in its trade or business. The qualifying IPRs are:

  • Patents;
  • Copyrights;
  • Trademarks;
  • Registered designs;
  • Geographical indications;
  • Lay-out designs of integrated circuit;
  • Trade secrets or information with commercial value; and
  • Plant varieties.

Information to be provided in a Valuation Report

Where the value of the capital expenditure exceeds certain thresholds as determined by the Comptroller, a company is required to submit an independent valuation report to the Comptroller. The valuation report should include the following information:

  • Purpose of valuation;
  • Definition of value;
  • Date of valuation;
  • Type(s) of IPR being valued;
  • Background of the company’s business and value drivers;
  • Valuation approaches and methods;
  • Valuation assumptions and inputs;
  • Valuation conclusion;
  • Information relied on in determining the valuation;
  • Material risks;
  • Disclaimers and limitations;
  • Terms of engagement;
  • Credentials of Valuers.

Sources: IRAS

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