CAG loses appeal to have tax break for $273m spent on assets

Runways, taxiways and aprons at airport are structures, not tools of trade: Judge

- Samuel Devaraj

Changi Airport Group (CAG) has lost an appeal to have a tax break for $273 million spent on assets over three years.

In dismissing the appeal, Justice Choo Han Teck said the assets - two runways and various taxiways and aprons at Terminals 1, 2, 3 and 4 of Changi Airport - were structures and not tools of trade.

He added that he did not agree with CAG that the decision made by the Income Tax Board of Review was unreasonable and that it erred in law.

According to a judgment dated Nov 1, CAG, which was formed in 2009, made claims for capital allowances in 2011, 2012 and 2013 for capital expenditure on the assets, amounting to $272,575,162 across the three years.

Capital allowances are deductions claimable for the wear and tear of certain assets.

CAG and the Comptroller of Income Tax agreed on the characteristics of the assets - that is, they were designed to facilitate and ensure the safe landing, taxiing and taking off of aircraft.

But CAG argued that the assets were plants in the definition of the Income Tax Act.