Changi Airport Group (Singapore) Pte Ltd v Comptroller of Income Tax

Changi Airport Group (Singapore) Pte Ltd owns and operates the aerodrome at Changi Airport. Its runways, taxiways and aprons (the RTA) include two runways each 4km long and 60m wide, about 40km of taxiways and aprons with about 190 aircraft parking lots. The aerodrome also has specialised equipment such as airfield lighting, the instrument landing system and docking guidance systems (the Aerodrome Equipment).

The appellant claimed capital allowances under s 19A of the Income Tax Act for capital expenditure of $272,575,162 on the RTA for the years of assessment 2011, 2012 and 2013, treating the RTA as "plant". The Comptroller of Income Tax refused, treating the RTA as structures that qualified only for industrial building allowances written down at 3% a year, while allowing the claims for the Aerodrome Equipment.

The Income Tax Board of Review found that the RTA were structures, and a High Court judge dismissed the appellant's appeal. The appellant appealed to the Appellate Division in Civil Appeal No 93 of 2024. An earlier application to stay the appeal pending disputes over later years of assessment was dismissed. The court dismissed the appeal at the hearing and gave these grounds later.

1. Whether the runways, taxiways and aprons should be assessed alone or together with the Aerodrome Equipment as a single integrated asset.
2. Whether the runways, taxiways and aprons are plant or structures for the purposes of capital allowances.
3. Whether policy arguments about competitive disadvantage after the phasing out of industrial building allowances justified treating the assets as plant.

The court first stressed the standard of review. Whether an asset is plant is a question of fact and degree, and the Board's answer is decisive unless unreasonable. The focus is the Board's decision, not the judge's. Foreign cases could help but had to be used with caution, because Singapore treats plant and buildings or structures as mutually exclusive categories.

On divisibility, the RTA and the Aerodrome Equipment were to be assessed separately. The RTA could function, even if not optimally, without the equipment, and the two served distinct purposes: a surface for aircraft movement on one hand, navigation and safety on the other. A common purpose alone did not make assets indivisible, since framed broadly enough it could merge almost every asset of a business, and the terminal buildings, which also serve air travel, are plainly not plant.

On the plant question, the court applied the factors from ZF v Comptroller of Income Tax [2011] 1 SLR 1044. The RTA function mainly as surfaces on which aircraft move and rest, the premises of the trade rather than apparatus used in it. Cases on car wash sites, racetracks, putting greens and roads treated such surfaces as premises or structures even when purpose-built and essential, and the RTA physically resemble roads. They are made of very durable materials, have been in use for over 40 years and are intended to be permanent. Being essential or revenue-generating did not make them plant.

On policy, any competitive disadvantage flowed from Parliament's deliberate choice to replace industrial building allowances with the more targeted land intensification allowance, which does not cover airport services. Tax laws must be read objectively, change was for Parliament, and widening the meaning of plant would distort the capital allowances scheme.

The Appellate Division dismissed the appeal. The Board's conclusion that the RTA were structures and not plant was a reasonable one on the facts and had not been shown to be unreasonable. The appellant was ordered to pay the Comptroller's costs of the appeal fixed at $50,000 inclusive of disbursements, the court finding both sides' proposed figures excessive.