Companies within the same corporate group often have uneven results in a given year. One entity turns a healthy profit while a sister company, perhaps a newer venture or a business hit by a downturn, runs at a loss. Singapore’s group relief system lets you move certain unabsorbed losses and allowances from the loss-making company to the profitable one, so the group as a whole pays less corporate tax. Used correctly, it is one of the most valuable and underused tax tools available to Singapore groups.
This 2026 guide explains what group relief is, which companies qualify, what can be transferred, and how to claim it. It complements our earlier article on carrying forward unutilised tax losses, which deals with using losses within the same company over time. Group relief instead moves losses sideways between companies in the same year.
What is group relief?
Group relief is a system under the Income Tax Act 1947 (sections 37B to 37F) that treats members of a qualifying group as if they were, for a limited purpose, a single taxpayer. It allows current-year unutilised losses, capital allowances and approved donations of one Singapore company (the “transferor”) to be deducted against the assessable income of another Singapore company (the “claimant”) in the same group, for the same year of assessment.
The relief only applies to current-year items. It does not let you transfer losses that were brought forward from earlier years. Those brought-forward losses stay with the company that incurred them and are governed by the shareholding test, which we cover separately.
Which companies qualify: the 75% test
Two Singapore-incorporated companies are members of the same group for group relief if one is 75% owned by the other, or both are 75% owned by a third Singapore-incorporated company.
What “75% owned” means
A company (A) is 75% owned by another company (B) if at least 75% of A’s ordinary share capital is beneficially held, directly or indirectly, by B, and B is beneficially entitled to at least 75% of A’s distributable profits and of its assets available on a winding up. All three limbs, capital, profits and assets, must be satisfied. This prevents structures that hold 75% of shares but strip out the economic entitlement.
The ownership threshold must be maintained throughout a continuous period that includes the end of the relevant accounting period. A group formed midway through the year may only qualify for part of the losses, calculated on a time-apportioned basis.
Other conditions
Beyond the 75% ownership test, both companies must meet several further conditions:
Both the transferor and the claimant must be incorporated in Singapore. Both must have the same accounting year-end (the same financial year end date). Both must be Singapore tax resident, or at least chargeable to Singapore tax, and neither should be enjoying certain tax incentives that specifically bar group relief. The companies must belong to the same group throughout the relevant continuous period. Foreign subsidiaries and foreign parent companies cannot participate in the Singapore group relief system, although they may count in tracing indirect ownership.
If your group companies currently have different financial year-ends, aligning them, which we can arrange through a change of financial year end, is often the first step to unlocking group relief.
What can be transferred
Only three categories of current-year unutilised items can be transferred under group relief:
| Item | Description |
|---|---|
| Current-year unabsorbed capital allowances | Capital allowances for the year that the transferor cannot fully use against its own income |
| Current-year unabsorbed trade losses | Trade or business losses incurred in the current year |
| Current-year unabsorbed approved donations | Qualifying donations made in the current year that the transferor cannot fully deduct |
The transferor decides how much of each item to surrender, and the claimant sets it against its own assessable income for the same year of assessment. Any amount not transferred remains with the transferor to carry forward in the normal way, subject to the shareholding test.
A simple worked example
Suppose Holdco owns 100% of both TradeCo and NewCo, all incorporated in Singapore with a 31 December year-end. In the year of assessment, TradeCo has assessable income of S$500,000 and NewCo has a current-year trade loss of S$300,000. Without group relief, TradeCo pays tax on S$500,000 and NewCo carries its loss forward.
With group relief, NewCo surrenders its S$300,000 loss to TradeCo. TradeCo’s chargeable income falls to S$200,000, cutting the group’s tax bill this year rather than waiting for NewCo to become profitable. The cash-flow benefit of using the loss now, instead of years later, is the whole point of the relief.
How to claim group relief
Group relief is claimed through the annual corporate income tax return. The transferor completes a Form GR-A to declare the loss items it is transferring, and the claimant completes a Form GR-B to declare the items it is claiming. Both forms are submitted to IRAS together with the companies’ tax returns for the relevant year of assessment.
The election is made at the time of filing, so it needs to be planned before the Form C filing deadline. Companies claiming group relief must file the full Form C (not Form C-S or C-S Lite), because group relief is one of the items that takes a company outside the simplified return. Keeping the supporting computations and ownership evidence is essential in case IRAS reviews the claim.
Group relief versus loss carry-forward: which comes first?
The two systems interact. In general, a company first uses its own current-year losses and allowances against its own income. Only the unutilised balance for the current year is available to surrender under group relief. Amounts not surrendered are carried forward within the company under the shareholding test. Deciding how much to surrender, and to which claimant, is a planning exercise, especially where several group companies have income and the partial and full tax exemptions are in play.
Frequently asked questions
Can we transfer losses brought forward from previous years?
No. Group relief covers only current-year unabsorbed capital allowances, trade losses and approved donations. Brought-forward losses stay with the company that incurred them.
Do the companies need the same financial year-end?
Yes. A common accounting year-end is a core condition. Groups with mismatched year-ends usually need to align them before they can claim.
Does a foreign parent company disqualify us?
Not by itself. What matters is that the transferor and claimant are Singapore-incorporated and that the 75% ownership can be traced. A foreign holding company can sit above the Singapore group without preventing relief between the Singapore members, provided the ownership tracing works.
Group relief planning sits at the intersection of corporate structure and tax, which is where a combined corporate secretarial and tax provider adds real value. Raffles Corporate Services can review your group, align year-ends, and prepare the GR-A and GR-B forms as part of your annual filing. Reach us through our website.
See IRAS guidance on group relief at iras.gov.sg and the statutory provisions at Singapore Statutes Online.
— The Editorial Team, Raffles Corporate Services