Tax Reporting
Enterprises of all sizes are increasingly aware of the significant impact tax has on their financials. It is imperative to keep abreast on all related compliance measures and understand how to better manage them.
To help relieve our clients from the tedium tax poses, Ingwer Consulting offers Tax Consulting, Planning and Compliance for the following:
Corporate Income Tax
Any income that is “accrued” or received in Singapore by a company will be subjected to tax. This company may be registered locally or overseas.
Since 1 January 2003, Singapore has adopted a single-tier corporate income tax system to abolish double-taxation on stakeholders. Companies operating here will be charged 17% flat from YA2010 onwards. This applies to a company’s chargeable income only, while all dividends paid to its shareholders are exempt from further taxation.
Capital gains, such as income from the sale of fixed assets or from foreign exchange on capital transactions, are also not tax-deductible.
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As a new measure to help companies tide through economic downturns, encourage entrepreneurship and position Singapore as a business hub, the governing body IRAS has released three tax exemptions:
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Full Tax Exemption for New Companies
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Partial Tax Exemption for All Companies
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Tax Exemption for Foreign-Sourced Income
Personal Income Tax
Singapore’s personal income tax rates among the lowest in the world. In order to determine the income tax liability of an individual, one needs to first determine the tax residency and amount of chargeable income before applying the progressive tax rate to it.
It may prove useful to take note of the following:
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Singapore follows a progressive tax rate starting at 0% up to a maximum of 20% above S$320,000.
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Capital gains and inheritance are not tax-deductible.
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Individuals are taxed only on the income earned in Singapore; income earned while working overseas is largely not subject to taxation.
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Tax rules differ based on the tax residency of the individual.
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Tax filing for individuals is due on 15 April each year. Income tax is assessed based on a preceding year basis.
Individuals residing in Singapore are taxed on a progressive tax rate as listed below. It is mandatory to file personal tax returns if your annual income is S$22,000 or more. If less, this will not be necessary unless you have been informed by the tax governing body of Singapore to submit your taxes.
Goods and Services Tax (GST)
GST is a broad-based consumption tax levied on most of the goods and services supplied in Singapore, and the import of goods (collected by Singapore Customs). The noted exemptions from GST are for the sale and lease of residential properties, the importation and local supply of investment precious metals, and the provision of most financial services. The export of goods and international services remain zero-rated.
Once registered for GST, companies may claim Input Tax credits after charging Output Tax. Input Taxes refer to the GST incurred on your business purchases and expenses, while the GST you charge on your supplies for IRAS is known as Output Tax.
All businesses exceeding S$1 million per year in taxable turnover are mandated to come forward and register for GST. Those that do not may still opt for registration voluntarily.
Tax Planning
Companies are now directing more attention to tax and its impact on financials. Being an ever-present cost for businesses, it is imperative to plan your taxes right to optimise efficiency and profit. We help our clients plan their taxes through identifying areas to improve efficiency, developing effective operating models, advising on solutions, avoiding potential penalties, and more.
