High Court upholds decision, ruling airport assets as structures, not tools of trade.
SINGAPORE – Changi Airport Group (CAG) lost its appeal to claim capital allowances for $273 million spent over three years on runways, taxiways, and aprons at its four terminals. The High Court dismissed the appeal, with Justice Choo Han Teck ruling that the assets function as structures rather than tools of trade.
CAG had argued that the assets qualify as “plants” under the Income Tax Act, as they are integral to its operations. However, the Comptroller of Income Tax and the Income Tax Board of Review previously determined that these assets serve as premises rather than apparatuses used directly in trade.
Justice Choo affirmed this assessment, emphasizing that the assets primarily function as structures facilitating aircraft movement and rest, rather than tools or equipment directly used in business operations. He noted that while features like skid prevention and aircraft support enhance functionality, these are secondary to their role as infrastructure.
CAG’s claims for allowances on aerodrome equipment, such as airfield lighting and navigation systems, were granted, highlighting the distinction between structural assets and operational apparatus.
This ruling underscores the strict interpretation of the Income Tax Act, where capital allowances are mutually exclusive for plant/machinery and building/structure assets, ensuring clarity in Singapore’s tax framework.
