CRA indicates that a Singapore company recognizing earnings from a foreign branch only on a remittance basis could not measure its “earnings” under Singapore rules

A Singapore company was not required under Singapore income tax law to compute its income from its active business activities carried on through the branches in each of a designated treaty country and one which was not until a subsequent taxation year when the branch profits were remitted to Singapore. Accordingly, the branch “earnings” were to be determined under the income tax law of the designated treaty county (under (a)(ii) of the “earnings” definition in Reg. 5907(1)), or under modified Canadian tax rules (under (a)(iii) of that definition), as the case may be – and not under Singapore tax law (under (a)(i).)

Neal Armstrong. Summary of 24 August 2016 External T.I. 2015-0592921E5 under Reg. 5907(1) – earnings – (a)(i).