Singapore: The treatment of gains on the sale of foreign assets

The International Revenue Authority of Singapore (IRAS) states in its June 2025 guide that, "currently," capital gains from the sale of foreign assets are not taxable. Those classified as "income" are taxed as income. The guide focuses on entities. However, it provides for an exemption from capital gains tax (section 13(1)(zu)) for individuals receiving gains through an entity, but this exemption does not apply to gains arising from commercial activities. Therefore, everything hinges on the classification of the gain, which depends on the specific circumstances of each case.

This page is based on a single IRAS guide (3rd edition, June 6, 2025) and the tax treaty between France and Singapore. It does not address: the Singaporean income tax scale, the IRAS residency rule, French tax on these same gains, or the taxation of family offices. The guide specifies (¶ 1.2) that it concerns entities that derive gains from the sale of foreign assets; sections ¶ 2.1 and ¶ 3.1 do not mention individuals. Therefore, information pertaining to individuals is presented with its limitations.

What the guide calls a foreign asset

The guide entitled "Income Tax: Tax Treatment of Gains or Losses from the Sale of Foreign Assets" defines a foreign asset as "movable or immovable property situated outside Singapore": movable or immovable property located outside Singapore. Its third edition is dated June 6, 2025; the two previous editions are dated December 8, 2023, and December 9, 2024. The content consulted does not mention a more recent edition, although its existence cannot be ruled out.

The principle: capital or income

The guide lays out two rules, one next to the other.

Two points need clarification.

• The word "currently" matters. The guide describes the current position of the IRAS. Therefore, it should not be assumed that Singapore "does not tax capital gains": the guide says something else.
• The guide does not provide a list of criteria. The qualification is based on the facts of each case: the guide refers to the principles of case law (the "badges of trade") without listing them.

Section 10L: A regime for entities

For disposals occurring on or after January 1, 2024, Section 10L of the Income Tax Act may tax gains from the disposal of foreign assets when received in Singapore by certain entities that lack sufficient economic substance. A foreign entity that does not operate from or within Singapore is not subject to this provision.

For an individual, three points stand out from the guide (the second and third concern ¶ 13, entitled "Exemption from Tax for Individuals Who Receive Gains from the Sale of Foreign Assets by an Entity"):

1. An individual is not an "entity". The guide's definition (note 3) includes corporations, partnerships, and trusts, but excludes "an individual." Therefore, their earnings are not directly covered by section 10L.
2. An exemption exists for capital gains received through an entity. The guide states: «Tax exemption under section 13(1)(zu) of the ITA will be given on the capital gains» when the gains are taxable as individual income. Its example is that of a partnership with tax transparency: the share of capital gains is exempt in the hands of the individual partner.
3. This exemption has a limit. «"Tax exemption will not be given if the gains are business revenue gains." The guide's example is that of a partner in a (transparent) partnership who buys and sells real estate in Singapore and another jurisdiction: his share of business-related gains is taxed in his hands.

The two regimes cannot be combined. If a gain is taxable under section 10L, "the exemptions under section 13 will not be applicable" (FAQ 10 of the guide).

What the France-Singapore Convention Says

The convention signed on January 15, 2015 (Official Journal of July 2, 2016) is classified by the official list of tax treaties as an income tax («IR») treaty. Its Article 13 allocates the right to tax capital gains.

The question of residence is addressed in Article 4. For an individual who is resident in both States, the text establishes the following order of priority: permanent home, then center of vital interests; failing that, habitual residence; otherwise, the competent authorities decide by mutual agreement. Nationality is not included in this list.

Finally, Article 23 deals with the elimination of double taxation: French tax credit, capped at the French tax corresponding to these revenues, and, on the Singaporean side, exemption or tax credit.

Gains on foreign assets in Singapore: a numerical example (fictitious profile)

Situation. Marc is a fictional executive living in Singapore. In March 2027, he sells shares in a German industrial company with no significant real estate holdings (hypothetically). Sale price: €420,000. Purchase price: €260,000. Fees: €6,000. Amounts are in euros for simplicity, without exchange rate adjustments. Investing in shares can result in a capital loss.

Issue. Does the winnings have to be included in his taxable income in Singapore?

Strategy. The gain is calculated, then the two formulas from the guide (¶ 2.1 and ¶ 3.1) are applied. Hypothesis A: the gain is capital in nature. Hypothesis B: it stems from a commercial activity (repeated buying and selling, for example). The guide does not state that these two paragraphs apply to an individual who sells their own securities: the example is simply to illustrate the two formulas.

Result. The gain is 420,000 − 260,000 − 6,000 = €154,000. The transfer takes place after January 1, 2024.

No tax rates are applied: this page does not address the Singapore tax scale and therefore does not calculate the tax under scenario B, nor the rules for calculating the tax base. This profile is hypothetical; it does not prejudge any real-life situation. It also says nothing about the French tax treatment of the same gain.

Gains on foreign assets in Singapore: what changes depending on your situation

• The nature of the gain : capital or income, according to the "badges of trade". This is the decisive point of the guide.
• Your status : individual, or ownership by a corporation, partnership, or trust. Section 10L applies to entities; the exemption in ¶ 13 applies to the individual who receives earnings from an entity.
• The product reception location Section 10L focuses on the gains received in Singapore by the entities concerned.
• The type of property : buildings and companies with a predominance of real estate follow other rules in the convention.
• Your home : in Singapore, in France, or in both. Article 4 of the convention distinguishes between cases of dual residence.
• The date of the transfer : the regime of section 10L applies to transfers on or after January 1, 2024.

The rule depends on your situation; check before selling. No results are guaranteed.