AGENDA - Inland Revenue Authority of Singapore · 2015-11-02 · AGENDA A. Basis of Assessment...
Transcript of AGENDA - Inland Revenue Authority of Singapore · 2015-11-02 · AGENDA A. Basis of Assessment...
C ’ T Obli tiCompany’s Tax Obligations for Year of Assessment 2015for Year of Assessment 2015
Presentation by Inland Revenue Authority of SingaporeFor Corporate Seminars held in Nov 2015
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 1
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AGENDAAGENDA
Basic Corporate Tax RulesBasic Corporate Tax Rules
Corporate Tax Obligationsp g
Others
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 22
AGENDA
A. Basis of Assessment
Basic Basic C tC t
B. Taxable Income
C. Deductions against Income
D Capital Allowances (CA)Corporate Corporate Tax RulesTax Rules
D. Capital Allowances (CA)
E. Productivity and Innovation Credit (PIC)
F Unutilised Losses/ CA/ Approved DonationsTax RulesTax Rules F. Unutilised Losses/ CA/ Approved Donations
G. Tax Schemes to Lower Tax Payable
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 3
AGENDA
A. Tax Filing Obligations
Corporate Corporate TT
B. How to Pay Your TaxC. How to Object to Your Tax Assessment
D. What to Do If You Discover Errors in Your TaxTax Tax
ObligationsObligations
D. What to Do If You Discover Errors in Your Tax Declaration : IRAS’ Voluntary Disclosure Programme
E. Record-Keeping RequirementsF Keeping Company’s Particulars Up To Dategg F. Keeping Company s Particulars Up-To-Date
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AGENDAAGENDA
A. Budget 2015 Highlights
OthersOthers B. Wage Credit Scheme
C Q & AC. Q & A
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After this seminar, you will:
Have a basic knowledge of corporate taxation
Understand your annual tax filing obligationsUnderstand your annual tax filing obligations including the filing due dates
Be able to prepare a tax computation and e-File your Form C-S/ Cy /
Be ready to use the whole range of e-Services at y gmytax.iras.gov.sg
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 66
Basic Corporate Tax RulesBasic Corporate Tax RulesBasic Corporate Tax RulesBasic Corporate Tax Rules
A. Basis of Assessment
B. Taxable IncomeB. Taxable Income
C. Deductions against Income
D C it l All (CA)D. Capital Allowances (CA)
E. Productivity and Innovation Credit (PIC)
F. Unutilised Losses/CA/DonationsG. Tax Schemes to Lower Tax PayableG. Tax Schemes to Lower Tax Payable
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 7
(A) Basis of Assessment(A) Basis of Assessment
Basic Corporate Tax Rules
Income is assessable on a preceding financial year basis
(A) Basis of Assessment(A) Basis of Assessment
p g y
Year of Assessment (YA)
year in which income tax is chargedyear in which income tax is charged
current YA is YA 2015
Basis Period for a YA
the period of income relevant to the YAp
e.g. 1 Jan 2014 to 31 Dec 2014 (YA 2015)
1 Apr 2013 to 31 Mar 2014 (YA 2015)1 Apr 2013 to 31 Mar 2014 (YA 2015)
1 Jul 2014 to 30 Jun 2015 (YA 2016)
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(B) Taxable Income(B) Taxable Income
Basic Corporate Tax Rules
Income tax is payable on:
(B) Taxable Income(B) Taxable Income
Income received in Singapore f t id Si
Income accruing in or derivedf Si from outside Singapore
(i.e. foreign income received in Singapore)
from Singapore
(i.e. income sourced in Singapore) in Singapore)
E T d i f E g Interest income from
Singapore)
E.g. Trade income of a company carrying on business in Singapore
E.g. Interest income from a foreign bank outside Singapore that is remitted to Singapore
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(C) Deductions against Income(C) Deductions against Income
Basic Corporate Tax Rules
(C) Deductions against Income(C) Deductions against Income
Deductions allowed for expenses wholly and exclusively incurred in the production of income
Expenses must be revenue in nature (e.g. normal day-to-day operating expenses
Expenses must be incurred (i.e. not contingent liability or estimated amount)
Deduction must not be prohibited under the Income Tax Act (e.g. private plated car expenses even if incurred for business purposes)(e.g. private plated car expenses even if incurred for business purposes)
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Basic Corporate Tax Rules
Examples of NonExamples of Non--deductible Expensesdeductible Expenses
• Not incurred for business • E g Directors’ private expenses on
Private and Domestic • E.g. Directors private expenses on
entertainment or vacationDomestic Expenses
• E.g. Expenses incurred in acquiringCapital E.g. Expenses incurred in acquiring capital assets or expenses to incorporate a company
Capital Expenditure
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Examples of NonExamples of Non--deductible Expensesdeductible Expenses
Basic Corporate Tax Rules
Examples of NonExamples of Non--deductible Expensesdeductible Expenses
• Required to make claims based on actual amounts incurred, with supporting receipts/invoices
Claim of Estimated Purchases or
supporting receipts/invoicesExpenses
• Related parties do not work in company
• Payments do not commensurate with
Unreasonable Claim of Remuneration to
• Payments do not commensurate with level of services performed
• To be deductible, payments must be reasonable having regard to similar
Related Parties
(e.g. Family b f reasonable having regard to similar
services performed by an independent employee
members of director)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 12
Basic Corporate Tax Rules
Expenses incurred before Commencement of Expenses incurred before Commencement of Business (“PreBusiness (“Pre--commencement Expenses”)commencement Expenses”)
04
Pre-commencement 20
11
Business treated as commenced 2 Revenue
e penses inc ed
e YA
200 commencement
expenses are not deductible as they are not incurred in 20
04 -
2 as commenced business on the first day of the same financial YA
201
expenses incurred one year beforedeemed commencement
Befo
re the production of income. They are incurred before the company ro
m Y
A year in which it earns its first dollar of business receipt (i e
From
date will be allowed deduction*.
the company begins generating revenue.
Fr
receipt (i.e. deemed date of commencement of business).
*Does not apply to S10E companies
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PrePre--commencement Expensescommencement Expenses
Basic Corporate Tax Rules
Example:Company earned its first dollar of
PrePre commencement Expensescommencement Expenses
Company incurred revenue expenses on 1.9.2012
p ybusiness receipt on 1.9.2014. Deemed date of commencement is 1.1.2014
1 7 2012 31 12 2012 31 12 2013 31 12 2014
1.9.2012
1.7.2012(date of incorp.)
31.12.2012 (YA 2013)
31.12.2013(YA 2014)
31.12.2014(YA 2015)
Revenue expenses incurred from:
1.1.2013 to 31.12.2013 (YA 2014) – treated as incurred on 1.1.2014, as expenses were incurred
Revenue expenses incurred from 1.7.2012 to 31 12 2012 (YA 2013) incurred on 1.1.2014, as expenses were incurred
one year before deemed date of commencement. Deductible in YA 2015
1.1.2014 to 31.12.2014 (YA 2015) – Deductible
to 31.12.2012 (YA 2013) are not deductible
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 14
( )as business is treated as having commenced on 1.1.2014
SummarySummary
Basic Corporate Tax Rules
Revenue expenses inc ed
From YA 2004 to YA 2011
From YA 2012
SummarySummary
incurred to YA 2011
During the financial year in which company earns its
Tax deductible Tax deductiblein which company earns its first dollar of business receipt
1 year before the first day of the basis period in which company earns its
Not tax deductible
Tax deductible. The revenue expenses are treated as incurred on thewhich company earns its
first dollar of business receipt
treated as incurred on the deemed date of commencement of business.business.
Refer to IRAS’ website at iras.gov.sg
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g gBusinesses > Companies > Learning the Basics of Corporate Income Tax > Common Tax Reliefs That Help Reduce The Tax Bills
di ldi l
Basic Corporate Tax Rules
Deduction capped at:
Medical ExpensesMedical Expenses
1% of total employee remuneration or
2% of total employee remuneration if Company:p y p y
• Implemented Portable Medical Benefits Scheme (PMBS)or Transferable Medical Insurance Scheme (TMIS); and
• Met qualifying conditions under respective schemes
(For details, refer to guidelines issued by the Ministry ofManpower)
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Basic Corporate Tax Rules
Cap of 2% of total employee remuneration will also apply if
Medical ExpensesMedical ExpensesCap of 2% of total employee remuneration will also apply if
Company provided employees with inpatient medical insurance benefits in the form of portable medical shield plans:p p
• by paying insurance premiums on behalf of employees to insurance companies directly; or
• by reimbursing employees’ Medisave Accounts, premiums paid by employees
or
Company made ad-hoc contributions to employees’ MedisaveAccounts (subject to cap of $1 500 per employee per year)Accounts (subject to cap of $1,500 per employee per year)
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Medical ExpensesMedical Expenses
Basic Corporate Tax Rules
Total remuneration
Medical ExpensesMedical Expenses
Includes:
• employees' salaries, allowances & bonuses
di ecto s' em ne ation• directors' remuneration
• CPF contributions
E l dExcludes:
• directors' fees
• medical expenses• medical expenses
• cash allowances in lieu of medical expenses
• benefits-in-kindbenefits in kind
• skills development levy (SDL)
• foreign worker levy (FWL)
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Deduction for Expenditure Incurred on Deduction for Expenditure Incurred on
Basic Corporate Tax Rules
ppRenovation or Refurbishment (R&R) Works Renovation or Refurbishment (R&R) Works under Section 14Q (incurred from 16 Feb 2008)under Section 14Q (incurred from 16 Feb 2008)
Granted over 3 consecutive years on a straight-line basis so long ascompany continues to carry on that trade for which the R&R costswere incurred
Subject to an expenditure cap of $150,000* for every relevant three-j p p $ , yyear period* Expenditure cap increased to $300,000 from YA 2013
Granted separately from the capital allowance framework for plant &machinery
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Deduction for Expenditure Incurred on Deduction for Expenditure Incurred on R ti R f bi h t (R&R) W kR ti R f bi h t (R&R) W k
Basic Corporate Tax Rules
Examples of qualifying expenditure
Renovation or Refurbishment (R&R) Works Renovation or Refurbishment (R&R) Works under Section 14Q (incurred from 16 Feb 2008)under Section 14Q (incurred from 16 Feb 2008)Examples of qualifying expenditure(if they do not affect structure of the business premises)
G l l t i l i t ll ti d li hti General electrical installation and lighting
Kitchen and sanitary fittings
Door and window Door and window
Fixed partition
Wall coveringg
Flooring
False ceiling and cornice
More examples are available at IRAS’ website iras.gov.sg
Refer to IRAS’ website at iras.gov.sg
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g gBusinesses > Companies > Working Out Corporate Income Taxes > Business Expenses > Tax treatment of Business Expenses > Renovation or Refurbishment Works Expenditure (Section 14Q)
Deduction for Expenditure Incurred on Deduction for Expenditure Incurred on R ti R f bi h t (R&R) W kR ti R f bi h t (R&R) W k
Basic Corporate Tax Rules
Excludes expenditure relating to structural changes made to business
Renovation or Refurbishment (R&R) Works Renovation or Refurbishment (R&R) Works under Section 14Q (incurred from 16 Feb 2008)under Section 14Q (incurred from 16 Feb 2008)
Excludes expenditure relating to structural changes made to business premises and any:
a) design fees or professional fees) g p
b) antique
c) any type of fine arts
d) any works carried out in relation to a place of residence provided or to be provided to the company’s employees (applies to expenditure incurred from 18 Dec 2012))
Deduction against income => Forms part of adjusted loss
Available for carry forward & carry back Available for carry forward & carry back
Prior to YA 2013, unutilised S14Q deduction is not allowed to be transferred under group relief system
21© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
g p y
Deduction for Expenditure Incurred on Renovation or Refurbishment Deduction for Expenditure Incurred on Renovation or Refurbishment (R&R) Works under Section 14Q (incurred from 16 Feb 2008)(R&R) Works under Section 14Q (incurred from 16 Feb 2008)
Basic Corporate Tax Rules
Example: (Assuming no R&R costs incurred in the previous years)
YA 2014 YA 2015 YA 2016
(R&R) Works under Section 14Q (incurred from 16 Feb 2008)(R&R) Works under Section 14Q (incurred from 16 Feb 2008)
YA 2014 YA 2015 YA 2016
Total qualifying R&R costs
$90,000 $120,000 $150,000
incurred
Qualifying R&R t
$90,000 $120,000* $90,000*costs
R&R claim $30,000($90k / 3 yrs)
$70,000[$30 000 +
$100,000[$30 000 +($90k / 3 yrs) [$30,000 +
$40,000 ($120k /3 years)]
[$30,000 + $40,000+$30,000 ($90,000/3years)]
years)]
* In YA 2015, the amount of qualifying R&R cost to be allowed is $120,000 ($300,000-$90,000) as the combined qualifying R&R cost for YA 2014 and YA 2015 is still within the
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$90,000) as t e co b ed qua y g & cost o 0 a d 0 5 s st t t equalifying expenditure cap of $300,000 for the relevant three-year period. In YA 2016,qualifying R&R cost to be allowed is capped at $90,000 ($300,000-$90,000-$120,000).
Capital allowances given in place of depreciation and other capital
(D) Capital Allowances(D) Capital Allowances
Capital allowances given in place of depreciation and other capitalexpenditure, which are not tax-deductible
Given on qualifying fixed assets bought and used for trade purposesGiven on qualifying fixed assets bought and used for trade purposes
Exception - S-plated private passenger car
Not part of setting or part of premises in which business is carried on(e.g. renovation expenditure => Does not qualify for capital allowance)
Refer to IRAS’ website at iras gov sg
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Refer to IRAS website at iras.gov.sgBusinesses > Companies > Working Out Corporate Income Taxes > Claiming Allowances
(D) Capital Allowances(D) Capital Allowances
Basic Corporate Tax Rules
Examples of qualifying fixed assets:C
(D) Capital Allowances(D) Capital Allowances
Carpet Electrical and electronic equipment (e.g. air-conditioning system,
security/alarm system, sprinkler system and electrical appliances)
Furniture and fixtures Industrial plant and machineryp y Motorcycle and bicycle Motor vehicle (goods/commercial vehicle such as lorry,
truck and van)truck and van) Movable partition Office equipment (e.g. computer, printer, photocopier,
fax machine and telecommunication equipment)fax machine and telecommunication equipment) Venetian blind and curtain
24© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
(D) Capital Allowances(D) Capital Allowances
Basic Corporate Tax Rules
How to calculate
Qualifying assets Annual allowance (AA)
(D) Capital Allowances(D) Capital Allowances
calculate allowance (AA)
Over working life of asset
• Apply to all qualifying assets
• Refer to 6th Schedule of f
• Initial allowance (IA) = 20% of cost
( % f ) /[Section 19] Income Tax Act for working life
• AA = (80% of cost) / No. of years of working life
3-year write-off
[Section 19A(1)]
Apply to all qualifying assets AA = 1/3 of cost
[Section 19A(1)]
1-year write-off (for specific assets)
• Computers• Prescribed automation
equipment listed in Income
AA = 100% of cost
assets)
[Section 19A(2)]
equipment listed in Income Tax (Automation Equipment) Rules 2004; and Amendment Rules 2010 (effective from
25© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Rules 2010 (effective from 15 Dec 2010)
Basic Corporate Tax Rules
How to calculate Qualifying assets Annual
(D) Capital Allowances(D) Capital Allowances
How to calculate Qualifying assets Annual allowance (AA)
1-year write-off ( f
Low-value assetsC f
AA = 100% of cost(only for low-value assets)
[Section 19A(10)]
• Cost of each asset not more than $5,000*
• Total claim for 1-year write-off of ll h t d t $30 000[Section 19A(10)] all such assets capped at $30,000
per YA
* Before YA 2013 it was $1 000 Before YA 2013, it was $1,000
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((E)Productivity and Innovation Credit (PIC)E)Productivity and Innovation Credit (PIC)O e ieO e ie-- OverviewOverview
-- Tax Benefits under PICTax Benefits under PICPIC+ SchemePIC+ Scheme-- PIC+ SchemePIC+ Scheme
-- Cash PayoutCash PayoutPIC BonusPIC Bonus-- PIC BonusPIC Bonus
-- PIC IT and Automation EquipmentPIC IT and Automation Equipment-- Training of EmployeesTraining of Employees-- Training of EmployeesTraining of Employees-- Abusive PIC arrangementsAbusive PIC arrangements
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 27
Overview of PIC SchemeOverview of PIC Scheme
Training of Employees
6 activities covered under scheme:
Training of Employees
Purchase/Leasing of PIC IT and Automation Equipment
Acquisition/Licensing of Intellectual PropertyAcquisition/Licensing of Intellectual Property
Registration of Intellectual PropertyRegistration of Intellectual Property
Research & DevelopmentResearch & Development
Approved Design Project
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 28
Approved Design Project
28
Tax Benefits under PICTax Benefits under PIC
Years of Assessment
2011 to 2018 2013 to 2015
400% tax Cash payout PIC Bonus400% tax deductions/allowances
Cash payout PIC Bonus(Expire in YA 2015*)
400% tax deductions/ Opt for cash payout Dollar for dollar/allowances on expenditure on each of the 6 activities for
p p yin place of tax deductions/ allowances for
matching on qualifying expenditure, subject to the cap of $15,000the 6 activities for
financial years 2010 to 2017
allowances for financial years 2010 to 2017
to the cap of $15,000 over the 3-year period
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 29
* Announced in Budget 2015
400% Tax Deductions / Allowances400% Tax Deductions / Allowances400% Tax Deductions / Allowances400% Tax Deductions / Allowances
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 30
Tax Deductions / AllowancesTax Deductions / AllowancesTax Deductions / AllowancesTax Deductions / Allowances400% tax deductions/allowances on up to $400,000 expenditure p $ , pper year in each of the 6 activities
To allow max PIC benefits the spending cap across YAs for eachTo allow max PIC benefits, the spending cap across YAs for each activity is as shown below:
Years of Expenditure Cap per Tax Deduction Assessment Activity per Activity
2011 and 2012 (Combined)
$800,000 $3,200,000(400% x $800,000)(Combined) (400% x $800,000)
2013 to 2015 (Combined)
$1,200,000 $4,800,000(400% x $1,200,000)
2016 to 2018(Combined)
$1,200,000 $4,800,000(400% x $1,200,000)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 31
Tax Deductions / AllowancesTax Deductions / Allowances
Expenditure cap per qualifying activity applies only if carrying on a trade or business for the relevant YAs Otherwise combined cap istrade or business for the relevant YAs. Otherwise, combined cap is reduced accordingly
l d/ d b h tFor newly incorporated/registered businesses whose 1st YA is YA 2014, the combined expenditure cap for YAs 2014 to 2015 per activity is $800,000
Expenditure is net of grant or subsidy by the government or statutory boardboard
Expenditure exceeding the cap can still enjoy deduction basedExpenditure exceeding the cap can still enjoy deduction based on existing rules
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 32
Tax Deductions / AllowancesTax Deductions / AllowancesTax Deductions / AllowancesTax Deductions / Allowances
Potential Maximum Benefits for YA 2013 YA 2014 & 2015 combinedPotential Maximum Benefits for YA 2013, YA 2014 & 2015 combined
Deduct up to $28.8M (400% x $1.2M x 6 activities)
R&DIP
Acq isition/R&D Acquisition/Licensing
IP Registration
Training 400% deduction/allowances on up to $1.2M expenditure
DesignAutomation
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 33
g
PIC+ SchemePIC+ Scheme
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 34
PIC+ SchemePIC+ SchemeFrom YA 2015, qualifying SMEs that invest in excess of the combined
cap of $1.2 million in any of the 6 qualifying activities will enjoy enhanced deductions/allowances on an additional amount of $200 000enhanced deductions/allowances on an additional amount of $200,000 for each qualifying activity per YA
Maximum combined expenditure cap applicable for each 3-year period:p p pp y p
YA 2013 2014 2015 2016 2017 2018
Max. annual cap 400,000 400,000 600,000 600,000 600,000 600,000
Max. combined cap* $1,400,000# $1,800,000
* Only if you are carrying on a trade or business for the relevant YAs. Otherwise, the combined cap is reduced accordingly.
# The combined expenditure cap of $1,400,000 is only applicable for YA 2015 as the additional expenditure cap of $200,000 ($600,000 - $400,000) is not available for YA 2013 and YA 2014
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 35
PIC+ SchemePIC+ Scheme
Qualifying SMEsQualifying SMEs
Where the business is not part of Where the business is part of a groupWhere the business is not part of a group
• Revenue not more than $100 illi
Where the business is part of a group
• Group revenue not more than $100 million; or
• Employment size not more than 200 employees
pmillion; or
• Group employment size not more than 200 employeesp y
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 36
PIC+ SchemePIC+ SchemePart of a group
A parent and its subsidiaries as determined in accordance with the accounting standards (FRS 110), i.e. based on control
Includes both Singapore and foreign entities
To determine whether an SME is part of a group, reference is made to the last day of the relevant basis periody p
Once an SME is determined to be part of a group, the revenue and employment size criteria will be applied at the group leveland employment size criteria will be applied at the group level
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 37
Cash Payout Option Cash Payout Option Option to convert expenditure of up to $100,000 in all 6 activitiesper YAGiven in lieu of a tax deductionGiven in lieu of a tax deduction
At 30% (YAs 2011 and 2012) / 60% (YAs 2013 to 2018) cash payout ratepayout rate
$100,000 $60,000
Expenditure incurred during the basis period for
Cash Payout for YA 201560%
Tax deductions / allowances not granted on expenditure converted
during the basis period for YA 2015
Cash payout is non-taxable
Qualifying cost of expenditure that is converted to cash payout will
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 38
Qualifying cost of expenditure that is converted to cash payout will contribute towards the expenditure cap
Cash Payout OptionCash Payout OptionCash Payout Option Cash Payout Option
Years of Expenditure Cap MaximumYears of Assessment
Expenditure Cap for All 6 activities
Maximum Cash Payout
2011 and 2012 (Combined)
$200,000 $60,000 (30% x $200,000)
2013 to 2018(No pooling of
$100,000 per YA $60,000 per YA(60% x $100 000)(No pooling of
expenditure cap) (60% x $100,000)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 39
Cash Payout Option Cash Payout Option y py p
From YAs 2013 to 2015 From YAs 2016 to 2018
• Employed at least 3 local employees* (Singapore Citizens or PRs with CPF
• Employed at least 3 local employees* (Singapore Citizens or PRs with CPFCitizens or PRs with CPF
contributions) in the last month of the quarter or
bi d t i th
Citizens or PRs with CPF contributions) in the last 3 months of the quarter or
bi d t i thcombined quarters in the basis period for the relevant YA
combined quarters in the basis period for the relevant YA
• Carrying on business operations in Singapore
• Carrying on business operations in Singapore
* Employees exclude sole-proprietors, partners under contract for service, shareholders who are also directors of companies
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 40
directors of companies
Note: The 3-local-employee condition does not apply to 400% tax deductions/allowances
How to Claim Cash PayoutHow to Claim Cash PayoutHow to Claim Cash PayoutHow to Claim Cash Payout
Cash payoutCash payout
How Submit:• PIC cash payout application form; andPIC cash payout application form; and • Hire-purchase template and Research and Development claim form (where applicable)
Wh Aft th d f h t bi d t iWhen After the end of each quarter or combined quarters in the financial year but not later than the income tax filing due date
IRAS strives to distribute the Cash Payout within three months from the date of e eipt of the ppli tion p o ided ll info m tion i bmitted In mo t eof receipt of the application, provided all information is submitted. In most cases, IRAS processes the applications within 6 weeks.
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 41
How to Claim Cash PayoutHow to Claim Cash Payout
Applying via mytax.iras.gov.sg Preferred!
Applying via application formy g g
• Step 1: Authorise an employee or a third party
pp
• Complete and submit the original (not a photocopy),employee or a third party
for “PIC Cash Payout Matters” via EASY. This is a one-off process
original (not a photocopy), printed and signed form to IRAS at
one off process
• Step 2: Log in to t i t k
55 Newton RoadRevenue HouseSingapore 307987mytax.iras.gov.sg to make
an applicationSingapore 307987
• Check PIC Cash Payout application status via mytax.iras.gov.sg
• View PIC Cash Payout Notices via mytax iras gov sg
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 42
• View PIC Cash Payout Notices via mytax.iras.gov.sg
PIC BonusPIC Bonus
Effective from YAs 2013 to 2015
You will receive an equal amount in PIC bonus for every dollar spent on qualifying activities, subject to the cap of $15,000 over the 3-year
i d f YA 2013 t 2015period from YAs 2013 to 2015
PIC Bonus is given on top of existing PIC benefits
PIC bonus is taxable
Administrative proceduresll b d k l fBusinesses will not be required to make separate applications for
PIC bonus
IRAS will process bonus automatically based on information declared in income tax return or PIC cash payout application
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 43
PIC BonusPIC Bonus
Payment of PIC BonusPayment of PIC BonusWithin three months from filing income tax return – if claimed
400% tax deductions/allowances
Within three weeks after cash payout has been approved – if claimed cash payout
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 44
PIC BonusPIC Bonus
Conditions for PIC Bonus
Inc s at least $5 000 of PIC q alif ing e pendit e^ d ing theIncurs at least $5,000 of PIC-qualifying expenditure^ during the basis period for the YA in which a PIC Bonus is claimed
E l d t l t 3 l l l * (Si Citi PREmployed at least 3 local employees* (Singapore Citizens or PRs with CPF contributions) in the: last month of basis period for the YA – if claiming 400% tax
deductions/allowances
last month of quarter or combined consecutive quarters – if claiming cash payoutcash payout
Carrying on business operations in Singapore
^ Net of grant or subsidy by the Government or statutory board
* Employees exclude sole-proprietors, partners under contract for service, shareholders h l di t f i
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 45
who are also directors of companies
PIC BonusPIC Bonus
Example
C i iCompany Description YA 2013 YA 2014 YA 2015
A PIC‐qualifying expenditure
$12k $2k $5k
PIC bonus $12k $0^ $3kPIC bonus $12k $0 $3k(capped)#
^ Incurs at least $5,000 of qualifying PIC expenditure during the basis period for the YA in which a PIC Bonus is claimed
# Combined cap of $15,000 for the 3 YAs
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 46
Application of the Application of the 33 locallocal employee conditionemployee condition33--locallocal--employee conditionemployee condition(From YAs 2013 to 2015) (From YAs 2013 to 2015)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 47
33--locallocal--employee conditionemployee condition(Cash Payout & PIC Bonus)(Cash Payout & PIC Bonus)
Example 1: Business X has a Dec financial year-end and it opts for cash
(Cash Payout & PIC Bonus)(Cash Payout & PIC Bonus)YAs 2013 to 2015YAs 2013 to 2015
payout at the end of each quarter.
Year of Assessment 2015:Quarters
Jan – Mar 2014
Apr – Jun 2014
Jul – Sep 2014
Oct – Dec 2014Qua te s 2014 2014 2014 2014
Cash payout option exercised Quarter 1 Quarter 2 Quarter 3 Quarter 4
Relevant month for determining Mar 2014 Jun 2014 Sep 2014 Dec 2014
3-local-employee conditionp
When to submit From Apr From Jul From Oct From Jan cash payout application 2014 2014 2014 2015
Deadline to submit cash payout application
By income tax return filing due date • 15 Apr 2015/ 18 Apr 2015 (e-File return) for sole-proprietor and partnership
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 48
cash payout application 15 Apr 2015/ 18 Apr 2015 (e File return) for sole proprietor and partnership• 30 Nov 2015/ 15 Dec 2015 (e-File return) for company
33--locallocal--employee conditionemployee condition(Cash Payout & PIC Bonus)(Cash Payout & PIC Bonus)
Example 2: Business Y has a Dec financial year-end and it opts for cash
(Cash Payout & PIC Bonus)(Cash Payout & PIC Bonus)YAs 2013 to 2015YAs 2013 to 2015
Example 2: Business Y has a Dec financial year end and it opts for cash payout at the end of 1st, 3rd and 4th quarters
Year of Assessment 2015:Quarters
Jan – Mar 2014
Apr – Jun 2014
Jul – Sep 2014
Oct – Dec 2014Quarters 2014 2014 2014 2014
Cash payout option exercised
Quarter 1 Quarters 2 & 3 combined Quarter 4exercised
Relevant month for determining Mar 2014 Sep 2014 Dec 2014determining
3-local-employee conditionMar 2014 Sep 2014 Dec 2014
When to submit From Apr From Oct From Jan e to sub tcash payout application
o p2014
o Oct2014
o Ja2015
Deadline to submit By income tax return filing due date 15 Apr 2015/ 18 Apr 2015 (e File return) for sole proprietor and partnership
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 49
cash payout application • 15 Apr 2015/ 18 Apr 2015 (e-File return) for sole-proprietor and partnership• 30 Nov 2015/ 15 Dec 2015 (e-File return) for company
33--locallocal--employee conditionemployee condition(PIC Bonus (PIC Bonus -- For a business claiming enhanced For a business claiming enhanced
deductions/allowances)deductions/allowances)
Example 3: Business Z has a Dec financial year-end and it opts f h d d d i / ll
deductions/allowances)deductions/allowances)
for enhanced deductions/allowances.
Year of Assessment 2015:Financial period Jan – Dec 2014Financial period
Enhanced deductions / allowances
Relevant month for determining
3-local -employee conditionDec 2014
Deadline to submitBy income tax return filing due date
• 15 Apr 2015/ 18 Apr 2015 (e-File return) for sole-proprietor and partnership• 30 Nov 2015/ 15 Dec 2015 (e-File return) for company
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 50
Application of the Application of the 33 locallocal employee conditionemployee condition33--locallocal--employee conditionemployee condition(From YAs 2016 to 2018)(From YAs 2016 to 2018)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 51
33--locallocal--employeeemployee conditioncondition(Cash Payout)(Cash Payout)
Example 1: Business X has a Dec financial year-end and it opts for cash
( y )( y )YAs 2016 to 2018YAs 2016 to 2018
payout at the end of each quarter.
Year of Assessment 2016:Quarters
Jan – Mar 2015
Apr – Jun 2015
Jul – Sep 2015
Oct – Dec 2015Qua te s 2015 2015 2015 2015
Cash payout option exercised
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Relevant months for determining Jan – Mar
2015Apr – Jun
2015Jul – Sep
2015Oct – Dec
20153-local-employee condition 2015 2015 2015 2015
When to submit From Apr From Jul From Oct From Jan cash payout application 2015 2015 2015 2016
Deadline to submit cash payout application
By income tax return filing due date • 15 Apr 2016/ 18 Apr 2016 (e-File return) for sole-proprietor and partnership
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 52
cash payout application • 30 Nov 2016/ 15 Dec 2016 (e-File return) for company
33--locallocal--employeeemployee conditioncondition(Cash Payout)(Cash Payout)
Example 2: Business Y has a Dec financial year-end and it opts for cash pa o t at the end of 1st 3rd and 4th q a te s
( y )( y )YAs 2016 to 2018YAs 2016 to 2018
payout at the end of 1st, 3rd and 4th quarters.
Year of Assessment 2016:Quarters
Jan – Mar 2015
Apr – Jun 2015
Jul – Sep 2015
Oct – Dec 2015
Cash payout option exercised
Quarter 1 Quarters 2 & 3 combined Quarter 4
Relevant months for determining
3 l l l diti
Jan – Mar 2015
Jul – Sep 2015
Oct – Dec 20153-local-employee condition 2015 2015 2015
When to submit cash payout application
From Apr 2015
From Oct 2015
From Jan 2016cash payout application 2015 2015 2016
Deadline to submit cash payout application
By income tax return filing due date • 15 Apr 2016/ 18 Apr 2016 (e-File return) for sole-proprietor and partnership• 30 Nov 2016/ 15 Dec 2016 (e-File return) for company
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 53
cash payout application • 30 Nov 2016/ 15 Dec 2016 (e-File return) for company
How to Claim PIC (Summary)How to Claim PIC (Summary)400% tax deductions/allowances and PIC Bonus
Cash payout and PIC Bonus
Cash payout
A li bl YA YA 2011 t 2018 YA 2011 t 2015* YA 2016 t 2018Applicable YA YAs 2011 to 2018 YAs 2011 to 2015* YAs 2016 to 2018
How Claim tax deduction/allowances in income tax return
Submit PIC cash payout application form and hire-purchase template (where applicable)
When For company, submit income tax return by the filing due date: 30 Nov/ 15 Dec (e-File income tax return)
YAs 2013 to 2018:
After the end of each quarter or combined quarters )
For sole-proprietor/ partnership, submit income tax return and PIC declaration form by the filing due date: 15 Apr/ 18 Apr (e File
in the financial year but not later than the income tax filing due date
due date: 15 Apr/ 18 Apr (e-File income tax return)
Relevant month/months f d t i i
Last month of the basis period of the relevant YA
Last month of the quarter or combined
ti t
Last 3 months of the quarter or combined consecutive quarters
for determining 3-local-employee condition
consecutive quarters
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 54
*PIC Bonus is applicable from YAs 2013 to 2015
PIC IT and Automation Equipment PIC IT and Automation Equipment q pq p
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 55
PIC IT and Automation EquipmentPIC IT and Automation Equipment
Automation equipment that qualify for PIC from YA 2011 are prescribed in the “PIC IT and Automation Equipment List”
The “PIC IT and Automation Equipment List” has been expanded in Budget 2015p g
Both purchase and lease (only for own use) of PIC IT and t ti i t lif f PICautomation equipment qualify for PIC
One expenditure cap applies for both purchase cost and lease
• $800,000 for YAs 2011 and 2012 combined;
One expenditure cap applies for both purchase cost and lease payments:
• $1,200,000* for YAs 2013 to 2015 combined; and• $1,200,000* for YAs 2016 to 2018 combined
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 56
*For qualifying SMEs under PIC+ scheme, a higher expenditure cap applies
PIC IT and Automation EquipmentPIC IT and Automation Equipment
Current Automation Equipment in “PIC IT and Automation E i Li " i l dEquipment List" includes: Facsimile Optical character reader
Automated kitchen equipment for the purpose of food processing (for p
Laser printer Mainframe/Computers Milling machines
p p p g (F&B industry only)
Interactive shopping carts Automated housekeeping
Office system software Automatic storage and retrieval
system of warehouses I j i ld hi
equipment Automated seating systems for
convention or exhibition centre S lf li bi ff ld Injection mould machines
Automotive navigation systems Self-climbing scaffold system Concrete pumps
More examples are available at the IRAS website.
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 57
PIC IT and Automation EquipmentPIC IT and Automation EquipmentNew!
Description Enhancement*
“PIC IT and Automation Equipment List" has been expanded:
PIC IT and Automation EquipmentPIC IT and Automation Equipment
Description Enhancement*
Item 40 – Wastet i t
Examples: • Industrial shreddermanagement equipment • Industrial shredder• Mobile or static refuse compactor• Jaw crusher or impact crusher
L d h dli t• Load handling system• Composting equipment• Hydraulic shear
Effective from YA 2015
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 58
* Budget 2015 Enhancement
Website development costsWebsite development costs
100% write off will apply under S19A(10) instead of S19A(2)100% write-off will apply under S19A(10) instead of S19A(2)
PIC b fit b l i d ith ff t f YA 2014 t 2018PIC benefits may be claimed with effect from YAs 2014 to 2018 on capital expenditure incurred on developing a website, including costs incurred for the one-time registration of a domain name for the website
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 59
PIC IT and Automation EquipmentPIC IT and Automation Equipment
Case-by-case approval
F i t t i th PIC ITFor equipment not in the PIC IT and Automation Equipment List, apply to IRAS to have the equipment approved on a case-by-case basiscase basis
Submit the Application for Approval ofSubmit the Application for Approval of Equipment for PIC Form to IRAS (available on IRAS website) two months before the return filing due date or earlier g
Application will be processed within 3 weeks ofApplication will be processed within 3 weeks of receipt of form, provided all information is submitted
60© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
PIC IT and Automation EquipmentPIC IT and Automation Equipment
Case-by-case approval
Revised Criteria (from YA 2013)
Equipment Equipment
Revised Criteria (from YA 2013)
q pautomates or mechanises the
q penhances productivity of
work processes of the business
the business (for example, in terms of reduced manof reduced man-hours, more output or improved workor improved work processes)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 61
Flowchart on Flowchart on PIC IT and Automation EquipmentPIC IT and Automation EquipmentPIC IT and Automation EquipmentPIC IT and Automation Equipment
IT and Automation Equipment
PIC ITIn PIC IT
NoYes
In PIC IT and
Automation Equipment
List*
Case–by-case approval, subject to
Capital AllowanceWrite-down over 1 year, 3 years or tax working life of
asset
List*
subject to meeting criteria
asset(Refer to the PIC IT and
Automation Equipment List*)
Approved cases Rejected cases
Capital AllowanceWrite-down over 3 years
or tax working life of asset
•Does not qualify for PIC •Continue with current Capital Allowance t t t
62
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
* Refer to IRAS’ website at iras.gov.sg<Schemes><Businesses><Productivity and Innovation Credit Scheme>
treatment
PIC IT and Automation EquipmentPIC IT and Automation Equipment
E.g. Capital allowances (CA) under PIC for YA 2015
q pq p
Assume no CA claimed under PIC for YAs 2013 and 2014
Equip CostBase CA
Enhanced CA 300% on expenditure of TotalEquip-
mentCost CA
100%300% on expenditure of
up to $1.2MTotal
A $340k $340k $300k x 300% = $900k $1 240k
Note 1: Portion of Equipment A that qualifies for enhanced allowance = $610k ($800k cap less cost of
1,240k
900k
A
B
$340k
400k
k
$340k
400k
$ $(Note 1)
400k x 300% = 1,200k
$1,240k
1,600k
enhanced allowance = $610k ($800k cap less cost of Equipments B & C)
900kC 500k
1,240k500k 500k x 300% = 1,500k 2,000k
Total CA for YA 2015 4,840k
Note 1: Portion of Equipment A that qualifies for enhanced allowance = $300k ($1,200k cap less cost of Equipment B & C)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 63
$ ($ , p q p )
PIC IT and Automation EquipmentPIC IT and Automation EquipmentCash payout option
Election is on “per equipment” basis (cannot claim tax deduction and cash payout on the same equipment)deduction and cash payout on the same equipment)
Expenditure in excess of expenditure conversion cap forfeitedforfeited
From YA 2012, HP equipment with repayment covering 2 or more basis periods are eligible for cash payout
• i.e. for equipment acquired under HP agreement signed during the basis periods relating to YAs 2012 to 2018
•HP equipment acquired under HP agreement signed during the basis period
o o e bas s pe ods a e e g b e o cas payou
relating to YA2011, and with repayment covering 2 or more basis periods, are not eligible for cash payout
From YA 2016, to qualify for cash payouts on qualifying b h h h i iequipment, businesses must show that the equipment is
in use by the business at the point when they elect for cash payout
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 64
PIC IT and Automation EquipmentPIC IT and Automation Equipment
Cash payout option for HP equipmentExpenditure conversion cap will be applied on the price of the PIC automation equipment (excluding finance charges) Actual amount of cash payout is based on the principal sum repaid during the yearduring the yearElection has to be done in year of acquisition and the cash payout rate is “locked-in” in the same year
HP agreement Repayment of equipment costing $100k
entered in YA 2012 YA 2013 YA 2014 YA 2015 YA 2016
YA 2012* 20k 20k 20k 20k 20k
Cash payout rate
30% 30% 30% 30% 30%rate
Cash payout 6k 6k 6k 6k 6k
*For HP agreement entered between YAs 2013 to 2018 the cash payout rate is 60%
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 65
For HP agreement entered between YAs 2013 to 2018, the cash payout rate is 60%
PIC IT and Automation EquipmentPIC IT and Automation Equipment
• Minimum 1-year holding for y gpurchased equipment
• Claw-back may apply if equipment disposed of or leased out within
Minimum ownership period
p1 year from date of purchase
• Automatic waiverAutomatic waiver• Case-by-case basis: If IRAS is
satisfied with the commercial reason(s) that led to the disposal
Waiver of claw-back provisions
reason(s) that led to the disposal
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 66
Example Automatic waiver
PIC IT and Automation EquipmentPIC IT and Automation Equipment
Example - Automatic waiver
If in the basis period when the equipment was acquired, the cost of qualifying equipment acquired (excluding the cost of equipment disposed of) is more than or equal to the expenditure cap
li bl t th t b i i d l b k i i t ti ll i d
Acquired $1,500,000 worth of
applicable to that basis period, claw-back provisions automatically waived
qualifying equipment in Jun 2014(Enhanced allowances claimed in YA 2015 on cost of $1,200,000) Holding period less than
one yearone year
Disposed of equipment costing $100,000 in Jan 2015
Jan 2014 Dec 2014 Dec 2015
Claw-back provisions automatically waived as cost of remaining qualifying equipment of $1,400,000 ($1,500,000 - $100,000) is higher
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 67
of $1,400,000 ($1,500,000 $100,000) is higher than expenditure cap of $1,200,000
PIC IT and Automation Equipment (Summary)PIC IT and Automation Equipment (Summary)
Purchase Lease
Without PIC 100% accelerated CA 100% revenue deductionWithout PIC 100% accelerated CA 100% revenue deduction
With PIC (YAs 2011 to 2018)
400% allowances/deductions subject to expenditure cap1, 100% allowances/deductions on balance exceeding the cap
Qualifying Expenditure Cost of equipment Lease payments
Minimum Ownership Period 1 year from the date of purchase N A 2Minimum Ownership Period 1 year from the date of purchase N.A.2
Cash Payout Option(YAs 2013 to 2018)
Per equipment basisConvert expenditure at 60% subject to cap3
Convert expenditure at 60% subject to cap3
to cap3
PIC Bonus PIC Bonus of up to $15,000 over 3-year period from YAs 2013 to 2015
1 Total expenditure cap for YAs 2011 and 2012 - $800,000 for each of the six activitiesTotal expenditure cap for YAs 2013 to 2018 - $1,200,000 for each of the six activities for each 3-year period (YAs 2013 to 2015 and YAs 2016 to 2018). For qualifying SMEs under PIC+ scheme, a higher expenditure cap applies
2 Equipment cannot be sub-leased within the same basis period of the YA
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 68
Equipment cannot be sub leased within the same basis period of the YA 3 Maximum expenditure for YAs 2013 to 2018 - $100,000 per annum for all six activities taken together
Training of EmployeesTraining of Employees
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 69
Training of EmployeesTraining of Employees
External training
All external training qualifyAll external training qualify
Qualifying Expenditure Includes Qualifying Expenditure Excludes
Course fees to any external trainingservice providerE.g. registration or enrolment fees,
Accommodation, travelling andtransport expenses of employeesattending the trainingg eg st at o o e o e t ees,
examination fees, tuition fees andaptitude test fees
atte d g t e t a g
Overheads like imputed rental andutilities
Rental of external training premises
Meals and refreshments providedduring the courses
Training materials and stationery
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 70
Training of EmployeesTraining of Employees
In-house training
Qualifying Training Programmes
Workforce Skills Qualification (WSQ) training courses
Courses approved by the Institute of Technical Education
On-the-job training by an on-the-job training centre certified by ITEtraining courses
accredited by the Singapore Workforce Development Agency
Technical Education (ITE) under the ITE Approved Training Centre
centre certified by ITE
Development Agency and conducted by a WSQ in-house training
Training Centre scheme
in house training provider
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 71
Training of EmployeesTraining of EmployeesIn-house training
• Non-certified in-house training courses, subject
In-house training
g , jto an expenditure cap of $10,000 per YA. The $10,000 cap cannot be combined across YAs
• The total training expenditure cap remains
From YAs 2012 to 2018
unchanged
• Training sessions conducted on operation of specialised equipment with the help of instruction manualinstruction manual
• Training on a business’ operating processes and functions in a group setting, with prepared materials and handouts
Examples of non-certified
in house training• Exclude informal sessions such as spontaneous
consultation, day-to-day problem solving and coaching sessions
in-house training
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 72
Training of EmployeesTraining of EmployeesIn-house training
Qualifying Expenditure Includes Qualifying Expenditure ExcludesQ y g p Q y g p
Salaries and other remuneration(excluding director fees) paid to in-house trainers for course delivery
Salaries and other remunerationpaid to in-house trainers for otherduties including preparation ofhouse trainers for course delivery
Rental of external training premises
duties including preparation oftraining material
Salaries and other remunerationMeals and refreshments provided
during the courses
Salaries and other remunerationpaid to employees providingadministrative support
Training materials and stationery Absentee payroll
Accommodation, travelling and, gtransport expenses
Overheads like imputed rental and
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 73
utilities
Training of EmployeesTraining of Employees
Training Base
If opt to convert $100,000 of training costs to cash payout:
Training Date
gcost
incurredCost
Converted deduction
100%Enhanced deduction
300% Total
11 Jan 14 $250k $250k $250k x 300% = $750k $1,000k
22 Mar 14
$250k
100k
350K100k
$250k
0$250k x 300% $750k
0750K
$1,000k
0
1,000K
YA 2015 Tax Computation
Net Profit Before Tax $1,850K
Add: Expenditure converted into cash 100kComputation(assuming no tax disallowable items)
Less: Enhanced deduction for training costs (750k)
Adjusted Profit Before Capital Allowances 1,200k
Add: Expenditure converted into cash 100k
Cash payout = 60% x $100k = $60k
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 74
Training of Employees (Summary)Training of Employees (Summary)In-house External
Without PIC 100% revenue deduction
With PIC (YAs 2011 to 2018)
400% tax deduction subject to expenditure cap1, 100% deduction on balance exceeding the cap
Rem ne tion fo o eQualifying Expenditure for Training of Employees including qualifying agents
- Remuneration for course delivery
- Rental of external premises- Refreshments
- Course fees paid- Rental of external premisesRefreshments- Training materials - Refreshments
- Training materials
Cash Payout Option(YAs 2013 to 2018) Convert expenditure at 60% subject to cap2
(YAs 2013 to 2018)
PIC BonusPIC Bonus of up to $15,000 over 3-year period from YAs 2013 to 2015
1 Total expenditure cap for YAs 2011 and 2012 - $800,000 for each of the six activitiesTotal expenditure cap for YAs 2013 to 2018 - $1,200,000 for each of the six activities for each 3-year period (YAs 2013 to 2015 and YAs 2016 to 2018). For qualifying SMEs under PIC+ scheme, a higher expenditure cap applies
2 d f 20 3 20 8 $ 00 000 f ll k h
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 75
2 Maximum expenditure for YAs 2013 to 2018 - $100,000 per annum for all six activities taken together
AbusiveAbusive PIC arrangementsPIC arrangements
Anti-abuse measures Deny PIC benefits arising from abusive arrangements
Impose penalties on promoters of PIC arrangements (including vendors and
l ) h k hconsultants) who know, or have reasonable grounds to believe that the arrangements they are promoting are b i PIC tabusive PIC arrangements.
Convicted offenders will have to pay aConvicted offenders will have to pay a fine of up to $10,000 and/ or imprisonment of up to three years
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 76
Abusive PIC arrangementsAbusive PIC arrangements
• Makes use of artificial, contrived or fraudulent step(s) to obtain PIC benefitsstep(s) to obtain PIC benefits
• Results in the payment of goods/ services for an amount that exceeds open market value without bona fide commercial reason or
Abusive arrangement
• No bona fide commercial reason for entering into arrangement
g
• Business A signs up for a training package of $5,000 with Vendor G for its employees on how to use certain cleaning products g p
• As part of the training package, Business A is given credits of $5,000 to redeem cleaning products sold by Vendor GU l ti f 30 i t t i i i
Example• Upon completion of a 30-minute training session,
Business A fully redeems $5,000 worth of cleaning products. It also makes a PIC cash payout claim on the purported training expenses of $5,000
p
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 77
p p g p $ ,• Contract is an abusive PIC arrangement as it makes
use of artificial steps to obtain PIC benefits
(F) U tili d C it l All(F) U tili d C it l All(F) Unutilised Capital Allowances (F) Unutilised Capital Allowances (UCA), Unutilised Losses (UL) and (UCA), Unutilised Losses (UL) and ( ), ( )( ), ( )Approved DonationsApproved Donations
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 78
UnutilisedUnutilised Capital Allowances (UCA) Capital Allowances (UCA)
Basic Corporate Tax Rules
May be carried forward to set-off future income of company
p ( )p ( )& & UnutilisedUnutilised Losses (UL)Losses (UL)
May be carried forward to set off future income of company
Conditions for claiming UCA & UL brought forward:
Same Business TestSame Business Test Applies only to UCA Same trade in respect of which CA were grantedp gShareholders’ Test Applies to both UCA & UL Ultimate shareholders & their shareholdings as at two
relevant dates are substantially the same (50% or more of total issued shares)of total issued shares)
Refer to IRAS’ website at iras.gov.sgBusinesses > Companies > Working Out Corporate Income Taxes >
79© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Businesses > Companies > Working Out Corporate Income Taxes >Unutilised Items (Losses, Capital Allowances and Donations)
Basic Corporate Tax Rules
UnutilisedUnutilised Capital Allowances (UCA) Capital Allowances (UCA) && U tili dU tili d L (UL)L (UL)
Relevant Dates
& & UnutilisedUnutilised Losses (UL)Losses (UL)
UCA Last day of YA (31 Dec) in which CA arose
& First day of YA (1 Jan) in which UCA is set-off
UL Last day of year (31 Dec) in which losses incurred
& First day of YA (1 Jan) in which UL is set-off
Example:
UCA and UL for financial year ended 31 Oct 2011 (YA 2012) tob t ff i t i i YA 2015be set-off against income in YA 2015.
Relevant Dates
31 D 2012 1 J 2015UCA
UL
31 Dec 2012 1 Jan 2015
31 Dec 2011 1 Jan 2015
80© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Approved DonationsApproved Donations
Basic Corporate Tax Rules
Donations are not deductible expenses as they are noti d i h d i f i
Approved DonationsApproved Donations
incurred in the production of income Please add back to arrive at adjusted profit
However you can claim deduction on donations made toapproved IPCs or other approved recipients for Singaporecharitable purposescharitable purposes Claim deduction of 2.5 times the amount of donations
made from 1 Jan 2009 to 31 Dec 2014 and from 1 Jan2016 to 31 Dec 2018*
Claim deduction of 3 times the amount of donationsmade from 1 Jan 2015 to 31 Dec 2015*made from 1 Jan 2015 to 31 Dec 2015
* Announced in Budget 2015
81© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Announced in Budget 2015
Basic Corporate Tax Rules
Approved DonationsApproved DonationsFrom 1 Jan 2011, company is required to provide itsidentification number to an IPC to claim tax deduction on thedonation made
View donations made to approved IPCs from 1 Jan 2011 at thee-Service “View Donations” in mytax.iras.gov.sg
Unutilised donations can only be carried forward and for up to 5years
For example: Unutilised donations for YA 2009 should be For example: Unutilised donations for YA 2009 should bedisregarded in YA 2015
Condition for claiming unutilised donations
Satisfy shareholders’ test (% of shareholding of commonshareholders as at two relevant dates are 50% or more)
Relevant Dates
Last day of year (31 Dec) in which donations were made
& First day of YA (1 Jan) in which unutilised donations
82© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
in which donations were made in which unutilised donations are to be deducted
(G) Tax Schemes to Lower Tax Payable(G) Tax Schemes to Lower Tax Payable-- Partial Tax ExemptionPartial Tax Exemptionpp-- Tax Exemption for New StartTax Exemption for New Start--up Companiesup Companies-- Corporate Income Tax RebateCorporate Income Tax Rebate
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 83
Basic Corporate Tax Rules
PartialPartial TaxTax ExemptionExemption
Partial tax exemption on chargeable income taxed at 17% of up to $300,000:
First $10,000 @ 75% $7,500
Next $290,000 @ 50% $145,000, ,
Total $300,000 $152,500
Maximum Exempt Amount is $152,500 for each YA
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 84
PartialPartial TaxTax ExemptionExemption
Basic Corporate Tax Rules
Example:(2)(1)
PartialPartial TaxTax ExemptionExemption
Chargeable Income (CI) before Exempt Amount
( )
120,000
( )
320,000Exempt Amount ,,
Declare CI before exempt amount (IRAS will automatically compute Less: Exempt Amount
152,500
exempt amount) 1. (75% x 10,000) 7,500
(50% x 290,000) 145,000
2. (75% x 10,000) 7,500(50% x 110,000) 55,000 62,500
Net CI after Exempt Amount $167,500 $57,500
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 85
TaxTax ExemptionExemption SchemeScheme forfor NewNew StartStart--upupBasic Corporate Tax Rules
Granted to qualifying new company for its first 3 consecutive
CompaniesCompanies
YAs
Exemption granted on chargeable income taxed at 17%:
YA Exempt Income
2008 onwards First $100,000 @ 100%= $100,000Next $200,000 @ 50% = $100,000
$300,000 $200,000
Maximum Exempt Amount is $200,000 for each YA
Refer to IRAS’ website at iras.gov.sgBusinesses > Companies > Learning the Basics of Corporate Income Tax >
86© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Businesses > Companies > Learning the Basics of Corporate Income Tax >Common Tax Reliefs That Help Reduce The Tax Bills
TaxTax ExemptionExemption SchemeScheme forfor NewNew StartStart--upupii
Basic Corporate Tax Rules
Qualifying conditions
CompaniesCompanies
Company incorporated in Singapore
Tax resident in Singapore for that YA
Qualifying conditions
Tax resident in Singapore for that YA
A company is tax resident in Singapore if control andmanagement of its business is exercised in Singaporeg g p
No more than 20 shareholders throughout basis periodfor that YA
All are individuals beneficially and directly holding theshares in their own names; or
Where there are non-individual shareholders, at leastone is an individual beneficially and directly holding atleast 10% of the issued ordinary shares of the company
87© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
least 10% of the issued ordinary shares of the company
TaxTax ExemptionExemption SchemeScheme forfor NewNew StartStart--upup
Basic Corporate Tax Rules
Qualifying conditions
pp ppCompaniesCompanies
The following companies incorporated after 25 Feb 2013 arenot eligible for the tax exemption scheme:
1) Property development companies Any company that buys or leases land and arranges for
a building to be built on land in order to lease, manageg , gor sell the building
2) Investment holding companies A company whose principal activity is that of
investment holding Derives investment income such as rental, dividend or
interest income
Companies that do not qualify for this scheme will still be
88© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
eligible for partial tax exemption
TaxTax ExemptionExemption SchemeScheme forfor NewNew StartStart--upupii
Basic Corporate Tax Rules
Example:
CompaniesCompanies
Date of incorporation: 1 Nov 2013
For trading company, attribute the adjusted profit/ loss to YA 2014 and1 Nov 2013
Financial year-end: 31 Dec 2014
profit/ loss to YA 2014 and YA 2015. Time basis of apportionment may be used.
First set of accounts: 14 mths
31.12.161.1.13 31.12.1431.12.13 31.12.15
YA 2014(1st YA upon
incorporation)
YA 2017 onwardsPartial tax exemption
YA 2015(2nd YA)
YA 2016(3rd YA)
89© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
incorporation)
HowHow toto claimclaim inin ee--FormForm CCBasic Corporate Tax Rules
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 90
Basic Corporate Tax Rules
17%
Corporate Tax Rate
Corporate Income Tax Rebate
Applicable for YA 2013 to YA 2017*
All i ill i 30% CIT b t d tAll companies will receive a 30% CIT rebate, capped at: $30,000 per YA for YA 2013 to YA 2015 $20,000 per YA* for YA 2016 and YA 2017 $20,000 per YA for YA 2016 and YA 2017
CIT rebate is computed on the tax payable after deducting tax set-offs (e.g. foreign tax credit)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 91
* Budget 2015 Enhancement
Corporate Tax ObligationsCorporate Tax ObligationsA Tax Filing ObligationsA. Tax Filing Obligations
B. How to Pay Your Tax
C How to Object to Your Tax AssessmentC. How to Object to Your Tax Assessment
D. What to Do If You Discover Errors in Your Tax Declaration : IRAS’ Voluntary Disclosure ProgrammeIRAS Voluntary Disclosure Programme
E. Record-Keeping Requirements
F Keeping Company’s Particulars Up-To-DateF. Keeping Company s Particulars Up To Date
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 92
(A) Tax Filing Obligations(A) Tax Filing Obligations
Corporate Tax Obligations
Responsibilities of Company
Comply with the submission of Income Tax Returns
(A) Tax Filing Obligations(A) Tax Filing Obligations
Comply with the submission of Income Tax Returns
Make truthful and accurate declaration of income
Company is responsible for all declarations made notwithstanding
that it has engaged the services of tax agents
Overview of Tax Filing Obligations
To File Byy
Estimated Chargeable Income (ECI)
3rd Month after financial year end
Form C-S/ Form C 30 Nov each year
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 93
Overview of Tax Filing ObligationsOverview of Tax Filing Obligations
Corporate Tax Obligations
Illustration:
Overview of Tax Filing ObligationsOverview of Tax Filing Obligations
Financial year end: 30 Jun 2014
1 Jul 2013
YA 2015B i i d 1 J l 2013
30 Sep 2014 30 Nov 2015
Basis period: 1 Jul 2013 to 30 Jun 2014 File ECI for YA 2015
(3 months after fi i l d d 30
File Income Tax Return for YA 2015financial year ended 30
Jun 2014)Return for YA 2015
94© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Corporate Tax Obligations
Estimated Chargeable Income (ECI)Estimated Chargeable Income (ECI)
All companies are required to file an estimate of chargeableincome (ECI) within 3 months after end of financial period
g ( )g ( )
income (ECI) within 3 months after end of financial period
E.g. Financial year ending 30 Jun 2015ECI for YA 2016 must be filed by 30 Sep 2015
IRAS will issue ECI reminder letter in last month of financial year
From YA 2013, companies with financial year endingOct 2012 onwards will not need to file ECI if:
Annual revenue is not more than $1 million; and$ ;
ECI* is nil
Companies that do not qualify for the above concession mustfil th i ECI ithi 3 th ft d f fi i l i dfile their ECI within 3 months after end of financial period, evenif they do not receive the ECI reminder letter
* before deducting exempt amount under the partial tax exemption or tax exemption
95© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
scheme for new start-up companies
ee Filing of ECIFiling of ECI
Corporate Tax Obligations
ee--Filing of ECIFiling of ECI
e-File by 26th of the month to enjoy more instalments* toy j ypay your estimated taxE.g. Company’s financial year ended on 31 Dec
ECI filed by e-Filers ECI filed by Paper-Filers
26 Jan 10 24 Jan 526 Jan 10 24 Jan 5
26 Feb 8 24 Feb 4
26 Mar 6 24 Mar 3
After 26 Mar No instalments After 24 Mar No instalments
* A company must sign up for GIRO to enjoy paying its estimated tax by instalments. The first few instalments could be combined and deducted on the
96© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
first GIRO deduction date, depending on the date of filing of ECI.
Corporate Tax Obligations
Log in to https://mytax.iras.gov.sg
i Si P / IRAS Pi
2
using your SingPass / IRAS Pin after you have been authorised by the company at EASY 1the company at EASY. 1
97© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Enhanced Enhanced SingPassSingPass (launched on 5 Jul (launched on 5 Jul 2015)2015)2015) 2015)
Features of Enhanced Singpass:
I d S itImproved SecurityReceive SMS/ email notification for changes made to profileTwo-Step Verification (2FA)Two-Step Verification (2FA)
– Option to register and activate mobile or OneKey token or both
Greater ConvenienceGreater Convenience
To enjoy the new features, users will need to:
d h i i b d d f• Update their SingPass account by providing and verifyingtheir mobile number and email address, as well as setting uptheir security questions and answerstheir security questions and answers.
• Set up their 2-step verification by registering, activatingand linking their OneKey token or mobile phone to their
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 98
and linking their OneKey token or mobile phone to theirSingPass account.
When to set up your 2FAWhen to set up your 2FA
Public given 1 year to set up their 2FA i e Jul
When to set up your 2FAWhen to set up your 2FA
Public given 1 year to set up their 2FA, i.e. Jul 2015 to Jun 2016
• IRAS’ e-Services, myTax Portal and EASY, are 2FA enabled from 5 Jul 2015
• 2FA capability is enabled under SingPass login
You can still log in to IRAS’ e-services using justYou can still log in to IRAS e services using just your password (1FA) until Jun 2016 if you have not signed up for 2FA yet
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 99
22--Factor Authentication (2FA)Factor Authentication (2FA)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 100
New New SingPassSingPass Login Screen Login Screen gg ggfrom 5 July 2015from 5 July 2015
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 101
22--Factor Authentication (2FA)Factor Authentication (2FA)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 102
Channels of Help & SupportChannels of Help & SupportC a e s o e p & Suppo tC a e s o e p & Suppo tOneKey Token Helpdesk SingPass HelpdeskOneKey Token Helpdesk
• Hotline:+65 6566 3539 (OKONEKEY)
• Hotline:+65 6566 3539 (OKONEKEY)
SingPass Helpdesk
• Hotline:+65 6643 0555
• Hotline:+65 6643 0555( )
• Email: [email protected]
( )
• Email: [email protected] • Helpline Operating Hours:Monday – Friday: 8 am to 8 pmS d 8 2
• Helpline Operating Hours:Monday – Friday: 8 am to 8 pmS d 8 2• Care Centre Opening Hours:
Monday – Friday: 8 am to 6 pmSaturday: 8 am to 2 pm
• Care Centre Opening Hours:Monday – Friday: 8 am to 6 pmSaturday: 8 am to 2 pm
Saturday: 8 am to 2 pm(Closed on Sunday and PHs)Saturday: 8 am to 2 pm(Closed on Sunday and PHs)
y p(Closed on Sunday and PHs)
• OneKeyCustomer Care Centre:
y p(Closed on Sunday and PHs)
• OneKeyCustomer Care Centre:
• SingPassEmail:[email protected]
• SingPassEmail:[email protected]
yInternational Plaza10 Anson Road #06-19 International Plaza Singapore 079903
yInternational Plaza10 Anson Road #06-19 International Plaza Singapore 079903
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 103For more news and information on Enhanced SingPass, visit www.ida.gov.sg
Corporate Tax Obligations
Option 1
104© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Corporate Tax Obligations
Option 2
105© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Corporate Tax Obligations
106© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Corporate Tax Obligations
1
2
107© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Corporate Tax Obligations
3
4
Enter ECI to be taxed at 17% before deducting exempt amount.
108© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Corporate Tax Obligations
2015
109© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
2015
110© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Income Tax Return (Form CIncome Tax Return (Form C--S/ C)S/ C)Income Tax Return (Form CIncome Tax Return (Form C S/ C)S/ C)
All companies have to file a tax return by 30 Nov of each yearAll companies have to file a tax return by 30 Nov of each year
A NIL return is required
Due date for filing tax return for YA 2015: 30 Nov 2015
N t i f ti b d 30 N 2015No extension of time beyond 30 Nov 2015
Exception: If you e-File Form C-S/ C, the filing due date is extended until 15 Dec 2015
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 111
Income Tax ReturnIncome Tax Return
Corporate Tax Obligations
Income Tax ReturnIncome Tax Return
File Form C and Appendix on Additi l I f ti
File Form C-S (Simplified Tax Filing for Small Companies)
OR
Additional Information on Income & Deductions (Form IRIN 301)
for Small Companies)For companies that meet qualifying conditionsg
112© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Filing PackagesFiling Packages
Corporate Tax Obligations
Filing PackagesFiling Packages3 different filing packages issued to companies
Group Companies likely to Companies likely toGroup Companies likely to qualify for Form C-S
Companies likely to qualify for Form C
Filing Package to 1. Form C-S e-Filing 2. Form C e-Filing be issued package*# package# or
3. Form C Package
If a company received Form C but meets the qualifying conditions for filing Form C-S, it can still proceed to e-File Form C-S (it does not need to return the Form C to IRAS for cancellation)the Form C to IRAS for cancellation)
If a company received a Form C package, it can still proceed to e-File Form C if it so wishes
* From YA 2014, IRAS will not issue paper copies of Form C-S# If a company cannot e-File Form C-S/ C, it can download the softcopy of Form C-S/ C from IRAS
website
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 113
website
Qualifying Conditions for FilingQualifying Conditions for Filing FormForm CC--SS
Corporate Tax Obligations
Qualifying Conditions for Filing Qualifying Conditions for Filing Form Form CC SS
Company:Does not claim any of th f ll i
p ythe following:
• Is incorporated in Singapore • Has an annual revenue* of
• Carry-back of Current Year Capital Allowances/Lossesas a a ua e e ue o
$1 million or below • Derives only income taxable
at 17%
o a es/ osses• Group Relief• Investment Allowance • Research & Development Taxat 17% Research & Development Tax
Allowance• Foreign Tax Credit and
Tax Deducted at SourceTax Deducted at Source
* Revenue refers to the main income source of the company excluding separate source income such as interest
Note: Companies that do not meet the conditions have to submit to IRAS a full set of tax return comprising theForm C, financial accounts, tax computation and supporting schedules.
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 114
Benefits of eBenefits of e--FilingFiling
Corporate Tax Obligations
gg
Extended filing deadline of 15 Dec, instead of 30 Nov
On-the-spot guidance as you e-File, with the iHelp facility
In-built formulae to auto-compute certain fields
Save draft until you are ready to submit
Auto-computation of estimated tax payable
Receive instant acknowledgement when you have successfully e-Filed
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 115115
Feedback on eFeedback on e--Filing Income Tax ReturnFiling Income Tax ReturnCorporate Tax Obligations
Feedback from companies and tax agents
“The online Form C-S is easy to use and requires minimal training. It generally helps y q g g y pto cut down time spent on updating basic information of the client. No more worrying whether the hard copy Form C-S can reach us on time for the tax return filing! The ease and convenience of e-Filing anytime and anywhere, especially
l t li t d i thi hi hl di it l d bil With Fili fappeals to our clients and us in this highly digital and mobile age. With e-Filing of Form C-S, we can definitely accomplish more in less time!”
“The benefit of e-Filing Form C has been the reduction of administrative work suchgas arranging for the submission of hardcopies to IRAS and engaging courierservices, and of printing cost.”
“e Filing with built in validations helped us to minimise errors The e Filing portal is“e-Filing with built-in validations helped us to minimise errors. The e-Filing portal is available 24 hours a day and has given us the flexibility to file at our own convenience. It is easier to manage a client's file as there is less paper work as compared to paper-based filing where we need to make photocopies. The draft p p p g p pversion of Form C-S has made our job easier and faster as we use it to get the client's approval for submission. The processing time of the finalisation of assessments is faster when we e-Filed the tax return.”
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 116
Corporate Tax Obligations
How to Access eHow to Access e--Services including eServices including e--Filing Form CFiling Form C--S/CS/C
Company Administrator Access
e-Services Authorisation System (EASY)
code and SingPass/IRAS Pin
e Services Authorisation System (EASY)
Company Staff/ Tax Agent
Authorise
Company Staff/ Tax Agent
L i t t i
SingPass/ IRAS Pin
Login to mytax.iras.gov.sgSTART!
Use e-Services
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 117
e Services Authorisation System (EASY)
Corporate Tax Obligations
e-Services Authorisation System (EASY)
Online system that allows organisations to authorise their employees/third party to access e-Services on their behalf
All authorisations of staff and directors/ tax agent must bedone at EASY
Log in to EASY using your company’s Access Code*
*Access Code is a unique password issued and sent to company’s registered address shortly after its incorporation. Please request a new Access Code if you have misplace your access code or its existing Access Code is no longer valid. The request form is available at IRAS website iras.gov.sg e-Services > Businesses > Companies > EASYq g g p
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 118
e Services Authorisation System (EASY)
Corporate Tax Obligations
Log in to EASYLog in to EASY
e-Services Authorisation System (EASY)
Log in to EASYLog in to EASY
Access Code application form
L i i i di id lLog in using your individual SingPass OR IRAS Pin
119© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
S i A th i ti S t (EASY)
Corporate Tax Obligations
A th li ti / f
e-Services Authorisation System (EASY)
Preparer• A preparer prepares the application/ form
for submission to an Approver
• The preparer does not have the rightsThe preparer does not have the rights to submit directly to IRAS
Approver IRAS
• An Approver will approve or edit, and submit the application/ form to IRAS
• The approver can also prepare the application/ form and submit it to IRAS (for companies without the Preparer role)
120© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
ee--Filing Income Tax ReturnsFiling Income Tax ReturnsF CF C SS-- Form CForm C--SS
-- Form C Form C New!New!
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 121
Form CForm C--S eS e--Filing packageFiling package
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 122
ee--Filing of Form CFiling of Form C--S at mytax iras gov sgS at mytax iras gov sg
Corporate Tax Obligations
Form C-S is a shortened 3-page Income Tax Return for smalli
ee--Filing of Form CFiling of Form C--S at mytax.iras.gov.sgS at mytax.iras.gov.sg
companies
Not required to submit financial accounts, tax computation andsupporting schedules with Form C-S but still need to preparesupporting schedules with Form C-S but still need to prepareand submit to IRAS upon request
You can e-File Form C-S for YA 2015 via mytax.iras.gov.sgy g gfrom 2 Jun 2015
Refer to IRAS’ website at iras.gov.sge e to S ebs te at as go sgBusinesses > Companies > Filing Taxes (Form C-S/ C) > Guidance on Completing Form C-S/ C
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 123
Demo on eDemo on e--Filing Form CFiling Form C--SS
Refer to IRAS’ website at iras.gov.sgBusinesses > Companies > Filing Taxes (Form C-S/ C) > Guidance on Completing Form C-S/ C
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 124
How to Complete Form CHow to Complete Form C--S for Qualifying Allowances S for Qualifying Allowances d D d ti d PICd D d ti d PIC
Corporate Tax Obligations
Example 1:Company spent $10 000 in financial year ending 2014 (i e basis period for YA 2015)
and Deduction under PICand Deduction under PIC
Company spent $10,000 in financial year ending 2014 (i.e. basis period for YA 2015)to purchase computers and also incurred $1,000 on external training for employees,both of which qualify for enhanced allowances and deduction respectively under PIC.
Complete Part B, Boxes 7, 12 and 13 of the e-Form C-S
$1 000 x 300%$1,000 x 300% =$3,000
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 125
$10,000 x 300% =$30,000
How to Complete Form CHow to Complete Form C--S for Qualifying Allowances S for Qualifying Allowances
Corporate Tax Obligations
Example 1 (cont’d):
and Deduction under PICand Deduction under PIC
Example 1 (cont d):
Complete Part C, Boxes 32 and 34 of the e-Form C-SComplete Part C, Boxes 32 and 34 of the e Form C S
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 126
How to Complete Form CHow to Complete Form C--S for Qualifying Allowances S for Qualifying Allowances
Corporate Tax Obligations
Example 2:
pp Q y gQ y gand Deduction under PICand Deduction under PIC
pCompany received a Government grant of $8,000 for the course fees of $50,000 (fees before deducting Government grant) paid in financial year ending 2014 (i.e. basis period for YA 2015).
Complete Part B, Box 7 of the e-Form C-S
$50,000 - $8,000= $42,000$42,000 x 300%= $126,000
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 127
How to Complete Form CHow to Complete Form C--S for Qualifying Allowances S for Qualifying Allowances
Corporate Tax Obligations
Example 2 (cont’d):
pp Q y gQ y gand Deduction under PICand Deduction under PIC
Complete Part C, Box 34 of the e-Form C-S
$50,000 - $8,000 =$42,000$ ,
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 128
How to Complete Form CHow to Complete Form C--S for Qualifying Allowances S for Qualifying Allowances
Corporate Tax Obligations
Example 3: d $ 0 000 l f f l d
pp Q y gQ y gand Deduction under PICand Deduction under PIC
My company incurred $50,000 on external training course fees in financial year ending 2014 (i.e. basis period for YA 2015). It converted training fees of $10,000 into cash payout.
Complete Part B, Boxes 4 and 7 of the e-Form C-S
$50,000 - $10,000=$40,000
$40,000 x 300%$120 000
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 129
=$120,000
How to Complete Form CHow to Complete Form C--S for Qualifying AllowancesS for Qualifying Allowances
Corporate Tax Obligations
Example 3 (cont’d):
How to Complete Form CHow to Complete Form C S for Qualifying Allowances S for Qualifying Allowances and Deduction under PICand Deduction under PIC
p ( )
Complete Part C, Box 34 of the e-Form C-S
$50,000 - $10,000=$40,000
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 130
How to Complete Form CHow to Complete Form C--S for Qualifying Allowances S for Qualifying Allowances
Corporate Tax Obligations
Example 4:
pp Q y gQ y gand Deduction under PICand Deduction under PIC
Example 4: Company purchase computers under hire purchase and made principal repayment of $50,000 in the financial year ending 2014 (i.e. basis period for YA 2015).
Complete Part B, Boxes 12 and 13 of e-Form C-S
$50,000 x 300%=$150,000
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 131
How to Complete Form CHow to Complete Form C--S for Qualifying Allowances S for Qualifying Allowances and Deduction under PICand Deduction under PIC
Corporate Tax Obligations
Example 4 (cont’d):
and Deduction under PICand Deduction under PIC
Complete Part Box 32, Part C of the e-Form C-S
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 132
How to Complete Form CHow to Complete Form C--S for Qualifying Allowances S for Qualifying Allowances
Corporate Tax Obligations
Example 5:
pp Q y gQ y gand Deduction under PICand Deduction under PIC
Company spent $300,000 in financial year ending 2014 (i.e. basis period for YA 2015) to purchase computers that qualify for enhanced allowances under PIC. It has opted to defer its claim for capital allowances on the computers.
Complete “0” on Part B, Boxes 12 and 13 of e-Form C-S
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 133
How to Complete Form CHow to Complete Form C--S for Qualifying Allowances S for Qualifying Allowances
Corporate Tax Obligations
E mple 5 ( ont’d)
pp Q y gQ y gand Deduction under PICand Deduction under PIC
Example 5 (cont’d):
Complete Part C, Box 32 of the e-Form C-S
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 134
Form C e-Filing Package Form C package
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 135
Fili f F CFili f F C
Corporate Tax Obligations
Companies that do not meet the conditions for filing Form C-S have t b it F C
Filing of Form CFiling of Form C
to submit Form C
A complete set of Income Tax Return (Form C) consists of:Form CForm IRIN 301 (Additional Information on Income & Deductions)Audited/ Unaudited accounts Not required to be submitted if full set of financial accounts
has been filed with ACRA in XBRL formatDetailed profit and loss statement Tax computation and supporting schedulesRelevant forms (e.g. group relief form, R&D claim form)( g g p , )
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 136
Corporate Tax Obligations
2 Modes of e2 Modes of e--Filing of Form CFiling of Form C
Implemented 2 modes of filing:
Online Form C (similar to e-Form C-S)Online Form C (similar to e Form C S)Complete the Form C template online at mytax.iras.gov.sg
Form C (Upload)Form C (Upload)Download a softcopy of Form C (PDF version) onto your PC / laptopComplete it at your convenienceUpload the completed Form C and relevant attachments atUpload the completed Form C and relevant attachments at mytax.iras.gov.sg
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 137137
Demo on eDemo on e--Filing of Form C (Upload)Filing of Form C (Upload)1. Download Form C (Upload) (PDF
format) file from our website and complete it at your own time and
i i l l hi2. Log in to www.mytax.iras.gov.sg(Ensure you are authorised via EASY system)
Form C (upload) (PDF)
convenience, in your local machine (Ensure you are authorised via EASY system)
3. Upload these documents onlineonline
Form C (Upload)* tax computation audited/ unaudited accounts detailed profit or loss statement detailed profit or loss statement other supporting documents
* Do not upload scanned copy of Form C
4. Click ‘Submit’
138© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Demo on eDemo on e--Filing of Form CFiling of Form C
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 139
How to complete Form C for qualifying allowances How to complete Form C for qualifying allowances under PICunder PIC
Corporate Tax Obligations
under PICunder PICExample: Company spent $300,000 to purchase computers that
qualify for enhanced allowances under PIC in the financial q yyear ending 2014 (i.e. basis period for YA 2015). It has opted to defer its claim for capital allowances on the computers.computers.
1. “General Information” tab in e-Form C
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 140
How to complete Form C for qualifying allowancesHow to complete Form C for qualifying allowances
Corporate Tax Obligations
C l B 29 d “A P 2” b i F C
How to complete Form C for qualifying allowances How to complete Form C for qualifying allowances under PICunder PIC
2. Complete Box 29a under “Assessment Part 2” tab in e-Form C with “$300,000”
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 141
H t l t F C f lif i llH t l t F C f lif i ll
Corporate Tax Obligations
How to complete Form C for qualifying allowances How to complete Form C for qualifying allowances under PICunder PIC
3. Complete Part E Box 21 under “Additional Information” tab in e-Form C
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 142
Corporate Tax Obligations
Checklist By
1 File ECI 3 months after1 File ECI 3 months afterfinancial year end
2 Prepare financial accounts
3 Prepare tax computation andsupporting schedules
4 e File Form C S/ C e File to enjoy4 e-File Form C-S/ C(for qualifying companies)
O
e-File to enjoy extended filing due date till 15 Dec
Or
e-File Form C [If unable to e-File, please submit paper
(with accounts and tax computation and supporting schedules)
Form C-S/ C by 30 Nov]
143© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
What Happens If You Don’t ComplyWhat Happens If You Don’t Comply
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 144
Enforcement Actions for NonEnforcement Actions for Non filing of ECI /filing of ECI /
Corporate Tax Obligations
Enforcement Actions for NonEnforcement Actions for Non--filing of ECI / filing of ECI / Income Tax ReturnIncome Tax Return
Estimate the company’s income and issue an assessment Payment has to be made within one month from the date
f N ti f A tof Notice of Assessment Any objection to the assessment will be reviewed only
upon submission of the tax returnp
Summons the company or director to court Upon conviction penalties up to $1 000/return may be Upon conviction, penalties up to $1,000/return may be
imposed; $50/day for continuous offence; and even double the amount of tax that the Comptroller may, to the best of hi j d b blhis judgment, assess to be payable
Refer to IRAS’ website at iras gov sg
145© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Refer to IRAS website at iras.gov.sgBusinesses > Companies > Filing Taxes (Form C-S/ C) > Late Filing / Failure to File
f i ff i f ff
Corporate Tax Obligations
Tax must be paid within one month from the date of
Enforcement Actions for NonEnforcement Actions for Non--payment of Taxpayment of Tax
Tax must be paid within one month from the date of Notice of Assessment, even if you object to the assessment
Failure to pay on time will attract: 5% late payment penalty; 1% Additional penalty/month up to 12%; Agency appointment; L l ti t i d th Legal action to wind up the company.
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 146
Tax Filing ObligationsTax Filing Obligations-- PreparationPreparation ofof AccountsAccounts & Tax& TaxPreparation Preparation of of Accounts Accounts & Tax & Tax
ComputationComputation
147© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
i f & C ii f & C i
Corporate Tax Obligations
All i i d h f ll i
Preparation of Accounts & Tax ComputationPreparation of Accounts & Tax Computation
All companies are required to prepare the following:
Audited/ Unaudited Accounts
Detailed Profit and Loss Statement
Tax Computation and Supporting SchedulesYou may use the Basic Corporate Tax Calculator available on IRAS’ website at iras gov sgavailable on IRAS’ website at iras.gov.sg (Businesses > Companies > Working out Corporate Income Taxes > Basic Corporate Tax Calculator)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 148
Type of Accounts to beType of Accounts to be Filed if CompanyFiled if Company
Corporate Tax Obligations
Type of Accounts to be Type of Accounts to be Filed if Company Filed if Company Qualifies for Qualifies for Audit ExemptionAudit Exemption
Audit Exemption (for financial years ending before 1 July 2015)
Under the Companies Act administered by the Accounting andCorporate Regulatory Authority (ACRA) the following are notCorporate Regulatory Authority (ACRA), the following are notrequired to have their accounts audited:
Dormant companiesDormant companiesExempt private companies (not more than 20 shareholdersand none is a corporation) with an annual revenue of notmore than $5 millionmore than $5 million
149© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Type of Accounts to beType of Accounts to be Filed if CompanyFiled if Company
Corporate Tax Obligations
A dit E ti (f fi i l b i i ft 1 J l 2015 )
Type of Accounts to be Type of Accounts to be Filed if Company Filed if Company Qualifies for Qualifies for Audit ExemptionAudit ExemptionAudit Exemption (for financial years beginning on or after 1 July 2015 )
Under the Companies Act administered by the Accounting and Corporate RegulatoryAuthority (ACRA), the following are not required to have their accounts audited:
Dormant companiesSmall companies* which are
(a) private companies in the financial year in question; and (b) l 2 f 3 f ll f d f l(b) meet at least 2 of 3 following criteria for immediate past two consecutive financial years:
(i) total annual revenue ≤ $10m;(ii) total assets ≤ $10m;(ii) total assets ≤ $10m; (iii) no. of employees ≤ 50.
*For a company which is part of a group: (a) the company must qualify as a small company; and(a) the company must qualify as a small company; and(b) entire group must be a “small group” to qualify to the audit exemption.
For a group to be a small group, it must meet at least 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.
Refer to ACRA’s website at acra gov sg
150© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Refer to ACRAs website at acra.gov.sgLegislation > Companies Act Reform > More Details on Small Company Concept for Audit Exemption
Type of Accounts to beType of Accounts to be Filed if CompanyFiled if Company
Corporate Tax Obligations
Type of Accounts to be Type of Accounts to be Filed if Company Filed if Company Qualifies Qualifies for Audit Exemptionfor Audit Exemption
Company qualifies for audit exemption
Company chooses t t h t dit d
Company chooses t h t dit dornot to have accounts audited
Submit:• Accounts (including notes to accounts)
to have accounts audited
Submit:
• Audited accounts
or
Accounts (including notes to accounts)• Detailed Profit and Loss Statement• Directors’ report• Directors’ statement (P d i li ith C i
• Audited accounts• Detailed Profit and Loss
Statement
(Prepared in compliance with Companies Act)
151© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
T Fili Obli iT Fili Obli iTax Filing Obligations Tax Filing Obligations -- New CompaniesNew Companiespp
152© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
FormForm CC--SS ee--FilingFiling packagepackage willwill bebe issuedissued toto newnew companiescompanies22 ftft thth ff i tii ti
Corporate Tax Obligations
22 yearsyears afterafter thethe yearyear ofof incorporationincorporation
Fi i l T T T t ti ECI
Example 1: Incorporation date is 2 July 2013
Financial period
Tax return
YA 2014
Tax return
YA 2015
Tax computation ECI
2.7.13 to 31.12.13
(6 mths)Request
1 set - YA 2014 YA 2014(by 31.3.14)
2.7.13 to 31.3.14
(9 mths)
Not applicable
1 set - YA 2015 YA 2015(by 30.6.14)
( )
2.7.13 to 30.9.14
(15 mths)
Not applicable
2 Tax computations with tax return for YA 2015YA 2014 (2.7.13 to 30.9.13)
YA 2014 & YA 2015(by 31.12.14)(15 mths) YA 2014 (2.7.13 to 30.9.13)
YA 2015 (1.10.13 to 30.9.14)
(by 31.12.14)
IRAS will issue tax return
153© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
(You do not have to request)
Example 2:
Corporate Tax Obligations
Year of Incorporation
2014 2014
First financial In Year 2014 In Year 2015period ends (for financial period less than
or = 12 months)(for financial period exceeding 12 months)
First ECI YA 2015 to be filed within YAs 2015 & 2016 to be filed 3 months after financial period ended 2014
within 3 months after financial period ended 2015
First Income YA 2015 to be filed by YA 2016 to be filed by Tax Return 30 Nov 2015/ 15 Dec 2015 (if e-
File)30 Nov 2016/ 15 Dec 2016 (if e-File) with tax computations for YA 2015 and YA 2016
How to obtain Income Tax Return from IRAS
Request for YA 2015 return by submitting ‘Request for Income Tax Return (Form C-S/ C) Filing P k d N tifi ti f N
IRAS will automatically issue tax return for YA 2016 in year 2016
Package and Notification of New Financial Year End’ application
(Quick Links > Forms >
154© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
(Quick Links > Forms > Businesses > Corporate Tax forms)
Corporate Tax Obligations
New Companies with Accounts Covering More Than 12 p gMonths
e-Form C-S (two-column template for YA 2014 and YA 2015):e Form C S (two column template for YA 2014 and YA 2015):Not required to submit financial accounts, tax computations andsupporting schedules
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 155
T Fili Obli iT Fili Obli iTax Filing ObligationsTax Filing Obligations-- Using eUsing e--Services to ComplyServices to Complygg p yp y
156© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
Key Contact Points with IRASKey Contact Points with IRASCorporate Tax Obligations
Filing of ECI and FormR ti f and Form C‐S/ C
Checking on the status of returns and/
Requesting for copies of
correspondence or notices
Tax Agents contact
Applying for Waiver to
/or assessments
IRAS onApplying for Certificate of Residence (COR)
Submit Income Tax Return by a
Dormant Company
(COR)p y
Lodging of Objections PIC matters
For the convenience of taxpayers and tax agents, IRAS has
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 157
For the convenience of taxpayers and tax agents, IRAS has developed a suite of e-Services for their usage
Corporate Tax eCorporate Tax e--Services at mytax.iras.gov.sgServices at mytax.iras.gov.sg
Corporate Tax Obligations
pp y g gy g gType of e-servicesFiling e-Services • File Estimated Chargeable Income (ECI)
NEW!• File Income Tax Return (Form C-S/ C NEW!
, Dormant Company)
• Section 45 (Withholding Tax) e-Services
Obj t t / R i L d bj ti t th N ti f A tObject to/ Revise Assessment
• Lodge an objection to the Notice of Assessment or make amendments to the ECI and/ or Form C-S/ C filed
Application e-Services • PIC Cash Payout NEW!
• Certificate of Residence (COR)• Certificate of Residence (COR)• Waiver to Submit Income Tax Return by a Dormant
Company
Viewing Communications/ • View Correspondence/ Notices
Lodging of
Viewing Communications/ Status
View Correspondence/ Notices• View Return Status• View Donations• View Research & Development Allowance AccountLodging of
ObjectionsPayment e-Services • Payment via internet banking
Update Corporate Profile/ Contacts & Alerts
• Update company’s particulars, contact details and financial year end NEW!
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 158
y
159
© 2015 IRAS Singapore
Case Study Preparing a Tax Computation
for a Trading Company
160
© 2015 IRAS Singapore
ABC Trading Co Pte Ltd Tax ref no. 200112345A
Detailed Profit & Loss Statement for the Year Ended 31 December 2014
S$ Schedule Sales 422,376 Less: Cost of goods sold 71,025
Gross profit 351,351 Add: Other income Gain on sale of fixed assets 1,000 (x) Singapore dividend 5,000 1 Interest income 6,900 2 Rental income 40,000 3
404,251 Less: Operating expenses
Advertisement 1,000 Audit fee 2,200 Bank charges 50 Course fees ………………………………………………………………………. 1,540 4 CPF 12,000 Depreciation 1,000 (x) Directors’ fees 26,000 Donations ………………………………………………………………………… 1,000 5 Entertainment and gifts 14,215 Fines & penalties ……………………………………………………………… 1,000 6 Insurance 1,980 Medical expenses ……………………………………………………………. 8,060 7 Newspapers 176 Printing and stationery 388 Property tax (rental property) ……………………………………….… 7,000 8 Rental expenses (business premises) 30,126 Salaries, bonus and allowances 168,000 Secretarial fees 2,030 Staff welfare 160 Telephone 5,976 Transport 1,367 Travelling expenses 19,263 Upkeep of motor vehicles ………………………………………..……… 9,010 9 Upkeep of office equipment 6,205 Water & electricity 2,550
322,296
Net profit before tax 81,955
161
© 2015 IRAS Singapore
Additional Information from the Balance Sheet
Fixed assets addition Tables $600 Office cabinets $5,550 Computer $1,000 Laser printer $800 Accounting software $4,500 Renovation (wall covering) $2,450
Supporting Schedules
1. Singapore dividend Tax exempt (1‐tier) dividend:
Name of company Date of payment
Gross amount
Tax deducted
Net amount
Sand Holdings Ltd 15.8.14 $5,000 Nil $5,000
2. Interest income ‐ $6,900 Interest income received from fixed deposits placed with a Singapore bank.
3. Rental income ‐ $40,000 Rental income received from property at 555 Revenue Road for the period 1.1.14 to 31.12.14.
4. Course fees ‐ $1,540
Date of course Description Course fees External training:
1.4.14 Seminar on financial reporting standards $ 290 attended by accountant 1.7.14 Service excellence course attended by salesmen 1,250 1,540 Enhanced deduction under Productivity and Innovation Credit (PIC)
= $1,540 x 300% = $4,620
5. Donations ‐ $1,000
Date of receipt Name of institution Receipt no. Amount 1.1.14 Temple donation 5678 $ 520 30.6.14 National Council of Social Service 1234 480 * 1,000
* Donation to approved Institution of a Public Character (IPC) = $480 Deductible donation = $480 x 2.5 = $1,200
162
© 2015 IRAS Singapore
6. Fines & penalties ‐ $1,000 Late payment penalty paid to CPF Board.
7. Medical expenses ‐ $8,060
CPF $ 12,000 Salaries, bonus and allowances 168,000 Total 180,000
Company implemented the Portable Medical Benefits Scheme and met the qualifying conditions under the scheme.
Medical expenses disallowed = $8,060 ‐ (2% x $180,000) = $8,060 ‐ $3,600 = $4,460
8. Property tax ‐ $7,000 Property tax paid for rental property at 555 Revenue Road.
9. Upkeep of motor vehicles ‐ $9,010
Amount incurred on: SDJ 222 $ 5,000 (Disallowed)
GN 888 4,010 Total 9,010
10. Section 14Q deduction for renovation or refurbishment costs
Cost of wall covering $2,450 Section 14Q deduction = $2,450 / 3 years = $817 Company did not claim section 14Q deduction in previous years.
11. Capital allowances (CA)
Description of asset
Cost S$
100% Base CA
S$
300% Enhanced CA
S$
Total CA
S$
Tax written down value
S$
Tables 600 ^ 600 ‐ 600 Nil
Office cabinets 5,550 1,850($5,550 / 3 yrs)
‐ 1,850 3,700
Computer* 1,000 1,000 3,000 4,000 Nil
Laser printer* 800 800 2,400 3,200 Nil
Accounting software*
4,500 4,500 13,500 18,000 Nil
Total 8,750 18,900 27,650
* Prescribed in PIC IT and Automation Equipment list. ^ Low‐value asset (less than $5,000 each) qualifying for one‐year write‐off.
163
© 2015 IRAS Singapore
ABC Trading Co Pte Ltd Tax ref no. 200112345A
Income Tax Computation for Year of Assessment 2015 Basis Period: 1 Jan 2014 to 31 Dec 2014
S$
S$
Schedule
Net profit before tax as per accounts 81,955 P & L Less: Non‐taxable items Gain on sale of fixed assets 1,000 P & L Less: Separate sources of income Singapore dividend 5,000 P & L Interest income 6,900 P & L Rental income 40,000 52,900 P & L
29,055 Add: Disallowable expenses Depreciation 1,000 P & L Donations 1,000 P & L Fines & penalties 1,000 6 Medical expenses 4,460 7 Property tax 7,000 8 Upkeep of motor vehicles 5,000 9 Less: Course fees (enhanced deduction under PIC) 4,620 4 Section 14Q deduction for renovation or
refurbishment works 817
14,023 10
Adjusted profit before capital allowances 43,078 Less: Capital allowances for YA 2015 27,650 11
Adjusted profit after capital allowances 15,428 Add: Separate sources of income Singapore tax exempt (1‐tier) dividend 0 1 Interest income 6,900 2 Rental income 40,000 3 Less: Property tax 7,000 33,000 8
55,328 Less: Approved donation (2.5 times deduction) 1,200 5
Chargeable income before exempt amount 54,128 Less: Exempt amount First $10,000 @ 75% 7,500 Next $44,128 @ 50% 22,064 29,564
Chargeable income after exempt amount 24,564
164
© 2015 IRAS Singapore
S$ S$
Schedule
Tax @ 17% 4,175.88 Less: Corporate income tax (CIT) rebate
($4,175.88 x 30%)
1,252.76
Net tax payable 2,923.12
165
© 2015 IRAS Singapore
This page is intentionally left blank.
Corporate Tax Obligations
(B)How to Pay Your Tax(B)How to Pay Your Tax
Instalment Scheme for Companies
Under the law, income tax is due within one month after the service of the Notice of Assessment
As a concession companies can pay the estimated tax on their ECI byAs a concession, companies can pay the estimated tax on their ECI by instalments
A company must sign up for GIRO to enjoy paying its estimated tax by instalmentsinstalments
More instalments granted if ECI return is submitted early and filed electronically
Within 1 month from FYE
Within 2 monthsfrom FYE
Within 3 monthsfrom FYE
e-File 10 8 6e-File 10 8 6
Paper File 5 4 3
166© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
FYE: Financial year end
(C) How to Object to Your (C) How to Object to Your ( ) j( ) j
Notice of AssessmentNotice of Assessment
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 167
Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
Corporate Tax Obligations
Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
1 • Objection 1 j
• Review2 • Review
Liti ti3 • Litigation
4 • Finalisation
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 168
Administrative Procedures to Administrative Procedures to
Corporate Tax Obligations
Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
Assessment Litigation (Income Tax Board of
Obj ti
Review /Courts)
JudgmentNo AgreementObjection
Review
JudgmentNo Agreement
Review
Agreement / SettlementFi li dFinalised
Assessment Tax
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 169
Certainty
Administrative Procedures to Administrative Procedures to
Corporate Tax Obligations
Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
Objection Stage
Comptroller (CIT) issues a Notice of Assessment (NOA)
Usually accompanied by a tax computation or letter to explain tax adjustments made
If taxpayer agrees with NOA - no action is needed
If taxpayer disagrees with NOA - file objection
Note: Whether or not objecting to NOA, payment of tax must be d i hi h f d f Omade within 1 month from date of NOA
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 170
Administrative Procedures to Administrative Procedures to
Corporate Tax Obligations
Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
Objecting to an assessmentLimitation of right to object to an Amended Assessment [section 76(2A) of Income Tax Act]76(2A) of Income Tax Act] Ensure finalisation of assessment
Section 76(2A):Section 76(2A):If the objection is made to any assessment, being one which:
(a) is made on or after the date the Income Tax (Amendment) Act 2011 is published in the Gazette; and2011 is published in the Gazette; and
(b) amends a previous assessment in any particular,then a person’s right to object to the assessment is limited to a i h bj i h i fright to object against the assessment in respect of, or matters
relating to, that particular.
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 171
Administrative Procedures to Administrative Procedures to Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
Filing an Objection:
Taxpayer must file within 2 months from the date of NOA (administrative concession)
NOA will indicate the 2-month objection deadline
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 172
Administrative Procedures to Administrative Procedures to Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
Corporate Tax Obligations
Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
Objection StageObjection Stage
An objection should provide the following details:
Year of Assessment
Description of the item(s) under objection
Amount of income/deduction for each item under objection
Reason to explain why deduction/ allowance/ relief ought to be allowed
Reason why income should not be subject to tax
Supporting documents Note: CIT may request revised income tax computation as it will help expedite the
review process
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 173
review process
Administrative Procedures to Administrative Procedures to Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
Filing an ObjectionFiling an Objection
Acknowledgement of an Objection via:
Obj ti t t i Recommended! I t te-Objection at mytax.iras.gov.sg Recommended! – Instant acknowledgement
Objection Form – acknowledgement within 14 days from date ofObjection Form acknowledgement within 14 days from date of receipt of Objection Form
Letter – no acknowledgement will be issuedg
Note:Both e-objection & Objection Form include a list of questions which assists taxpayer to
t i h th bj ti fil d i lid th iascertain whether an objection filed is valid or otherwiseTaxpayers/ Tax agents are encouraged to file objections via e-Objection or Objection Form
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 174
Administrative Procedures to Administrative Procedures to Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
R i SReview Stage
CIT - to review taxpayer’s objection and convey its decision on the tax issue under dispute within 6 months from the date of receipt oftax issue under dispute within 6 months from the date of receipt of complete information from TP
Taxpayer - has 3 months from the date of CIT’s letter to decide whether to accept CIT’s position (re: decision on tax issue under dispute)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 175
Administrative Procedures to Administrative Procedures to
Corporate Tax Obligations
Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
R i SReview Stage
To ensure closure of an objection, Notice of Refusal to Amend (IR 23) will be issued when:
Taxpayer does not reply to CIT’s decision on the tax issue p y p yunder dispute
Taxpayer’s agreement to CIT’s decision is qualified Taxpayer s agreement to CIT s decision is qualified
Taxpayer does not provide information after 2 years from date of receipt of objectionof receipt of objection
Note: CIT has adequate guidelines/ internal procedures to ensure Notice of Refusal to Amend are issued judiciously (eg. reminders will be sent to taxpayer before i i th N ti f R f l t A d)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 176
issuing the Notice of Refusal to Amend)
Administrative Procedures to Administrative Procedures to
Corporate Tax Obligations
Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
Li i i SLitigation Stage
Once Notice of Refusal to Amend (IR 23) is issued, taxpayer has the option to:
Drop the objectionp j
Pursue objection at: Income Tax Board of Review (ITBR) Income Tax Board of Review (ITBR) High Court Court of Appeal
(in specified order)(in specified order)
Taxpayer must lodge the Notice of Appeal within 30 days from the date of IR 23 should he wish to appeal to ITBR
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 177
date of IR 23 should he wish to appeal to ITBR
Administrative Procedures to Administrative Procedures to
Corporate Tax Obligations
Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) Process
Fi li i SFinalisation Stage
Assessment is final and conclusive when:
Assessment has been made and agreed by taxpayer
No valid objection is filed within the statutory time limit or such extension of time allowed
No Notice of Appeal has been filed with Income Tax Board of Review or High Court, as the case may be, within the statutory time limitstatutory time limit
An assessment has been determined on appeal
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 178
Administrative Procedures to Administrative Procedures to Obj ti & A l (O&A) PObj ti & A l (O&A) P
Corporate Tax Obligations
Objection & Appeal (O&A) ProcessObjection & Appeal (O&A) ProcessKey Points to Note
• 2 months from date of NOAExtended Objection deadline
• Issued for objections filed via e-Objection or Objection FormAcknowledgement
• Within 6 months from date of receipt of complete information (exception: complex cases)
CIT’s response
• Within 3 months from date of CIT’s letter (re: decision on tax issue under dispute)
Taxpayer’s response
• Issued under specific circumstances• CIT will send a final reminder to taxpayer before
issuing Notice of Refusal to Amend
Notice of Refusal to Amend (IR 23)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 179
(D) Wh t t d if Di E i(D) Wh t t d if Di E i(D) What to do if you Discover Errors in (D) What to do if you Discover Errors in Your Tax DeclarationYour Tax Declaration-- IRAS’ Voluntary Disclosure IRAS’ Voluntary Disclosure
ProgrammeProgramme (VDP)(VDP)ProgrammeProgramme (VDP)(VDP)
180© 2015 Inland Revenue Authority of Singapore. All Rights Reserved.
IRAS Voluntary Disclosure Programme (VDP)IRAS Voluntary Disclosure Programme (VDP)
Corporate Tax Obligations
y g ( )y g ( )
• Aims to encourage taxpayers that have made errors in their tax returns to voluntarily come forward to correct their errors and set their tax matters right, in exchange for reduced penalties
• Applicable to Individual Income Tax
Overview of VDP- Individual Income Tax - Corporate Income Tax - Goods and Services Tax (GST) - Withholding Tax g- Stamp Duty
• Voluntary disclosure must be timely, accurate, l t d lf i iti t d b tcomplete and self-initiated by taxpayer;
• Cooperate fully with IRAS to correct the errors made; and
• Pay or make arrangements with IRAS to payQualifying Conditions
• Pay or make arrangements with IRAS to pay additional taxes and penalties imposed (if any), and honour such arrangements till all payments are made.
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 181
IRAS Voluntary Disclosure Programme (VDP)IRAS Voluntary Disclosure Programme (VDP)
Corporate Tax Obligations
IRAS Voluntary Disclosure Programme (VDP)IRAS Voluntary Disclosure Programme (VDP)
Voluntary Disclosure d
Penalty TreatmentMade
Within 1 year from statutory filing date
No penalty imposed
Reducedl i
> 1 year from statutory filing date
Reduced penalty of:• 5% p.a. for Income Tax*• Flat 5% for GST andPenalties • Flat 5% for GST and
Withholding Tax
* For Income Tax, reduced penalty is 5% of tax undercharged for, p y geach year that income was late in being brought to tax.
Stamp Duty: For a voluntary disclosure pertaining to late stamping or underpayment of Stamp Duty that meets the
l f d d ' l lqualifying conditions under IRAS' Voluntary Disclosure Programme, the reduced penalty is 5% p.a. computed on a daily basis on the stamp duty payable. There is no grace period applicable to Stamp Duty.
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 182
Refer to IRAS website for more information on VDP:Home > Businesses > Companies > Getting it Right > Voluntary Disclosure of Errors for Reduced Penalties
(E) Record Keeping Requirements(E) Record Keeping RequirementsBenefits of Keeping Proper RecordsBenefits of Keeping Proper Records
• Better internal control of your business
1
• Better internal control of your business• Better financial management > Better business management
> Higher profitability
• Better able to detect business losses, internal fraud
2,
and theft
3• Easier and faster to file tax returns and deal with
IRAS’ queries, if required3 q , q
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 183
Corporate Tax Obligations
Keeping Proper RecordsKeeping Proper Records
• E.g. Receipts, invoices or vouchers
p g pp g p
Source Documents
invoices or vouchers issued/received
• Delivery notes• Credit/Debit notes
Bank Statements
/• Import/Export
documents
• E.g. General ledgerKeeping g g• Debtors and
creditors ledgers• Purchase and
sales books
p gProper Records
Accounting Records
sales books• Cash books and
other accounts books• E.g. Business
t t • Sales listings/records of daily takings
• Financial statements e.g. Balance Sheet,
Any Other Business Records
contracts• Notes of Board
meetings/Audit Committee
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 184
e.g. Balance Sheet, Profit & Loss statement
meetings
Keeping Proper RecordsKeeping Proper Records
Corporate Tax Obligations
Keeping Proper RecordsKeeping Proper RecordsAll business transactions must be supported by source documentsdocuments
Manual Records Electronic Records
Records of business Records of business transactions using computer softwaretransactions in
physical formcomputer software
(including accounting
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 185
software)
Corporate Tax Obligations
Record Keeping requirementsRecord Keeping requirements
• At least 5 years for financial periods ending on or after 1 Jan 2007 e g
Regardless of whether assessment is finalised, records have to be kept and retained for:
• At least 5 years for financial periods ending on or after 1 Jan 2007 e.g. Records for period 1 Jul 2013 to 30 Jun 2014 (YA 2015) should be kept up to 31 Dec 2019
• At least 7 years for financial periods ending before 1 Jan 2007y p g
Records cannot be discarded even if Notice of Assessment is receivedreceived
IRAS may request records for verification purposes
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 186
Corporate Tax Obligations
Record Keeping requirementsRecord Keeping requirements
Estimates of income and expenses are not acceptable for tax purposes
• Fined up to $1,000 per Year of Assessment
Failure to keep proper records:
p , p• Imprisoned for up to 6 months
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 187
R dR d K i TiK i Ti
Corporate Tax Obligations
From the start of your business, set up a good filing
RecordRecord--Keeping TipsKeeping Tips
From the start of your business, set up a good filing system for your paperwork
Obtain source documents at the point of transaction
Record business transactions accurately and regularly
d b l fBe sure to record business expenses separately from personal expenses
Make sure records can be understood by anyone
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 188
Need Help with Record Keeping?Need Help with Record Keeping?
Corporate Tax Obligations
Need Help with Record Keeping?Need Help with Record Keeping?
Record Keeping Self-Assessment Toolkit
Easy-to-use toolkit to help you self-assess your record keeping
standard
Easy-to-understand tips for improvement
Go to IRAS’ website at iras.gov.sg (Business > Learning the Basics of Corporate Income Tax > Business Records That Businesses Must Keep)Records That Businesses Must Keep)
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 189
(F) Keeping Your Company’s Particulars Up(F) Keeping Your Company’s Particulars Up--ToTo--DateDateCorporate Tax Obligations
Particulars that must be kept up-to-date:
Update Corporate Profile/ Contacts & Alerts New!Update Corporate Profile/ Contacts & Alerts New!
Business activity (i.e. SSIC Code)
Add f th C ’ i t d ffiAddress of the Company’s registered office
Company’s financial year end (FYE)
Why is it important to keep these details up-to-date?
Business activity (i.e. SSIC Code) may be used for tax assessment purposes.
All Forms and Notices will be sent to the company’s registered office
IRAS’ record of your company’s FYE can affect:
– Our record of your ECI due date
– Our record of whether the company can be accorded the
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 190
Our record of whether the company can be accorded the Tax Exemption for New Start-Up Companies
How to change your Company’s particularsHow to change your Company’s particulars
Corporate Tax Obligations
Update Corporate Profile/ Contacts & Alerts/ Financial Year End
How to change your Company s particularsHow to change your Company s particulars
p p
• Company’s staff or tax agent who have been authorised with an ‘Approver’ role can also update the company’s: contact details (i.e. name of contact person, telephone number and
email address), and financial year end New! financial year end
• The contact details and financial year end will be updated immediately upon successful submission
• View the companies’ particulars and contact details (e g company’s status• View the companies particulars and contact details (e.g. company s status, registered office address, financial year end and telephone number) at mytax.iras.gov.sg
For new companiesUpdate your financial year end if it is not 31 Dec
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 191
C ’ B i A ti it (i SSIC C d )C ’ B i A ti it (i SSIC C d )
Corporate Tax Obligations
Company’s Business Activity (i.e. SSIC Code)Company’s Business Activity (i.e. SSIC Code)
If the company ‘s principal activity has changed such that its businessIf the company s principal activity has changed such that its business activity (i.e. SSIC Code ) is different from that provided to ACRA at the point of incorporation, please:
• Inform ACRA via www.bizfile.gov.sg on the change of the company’s particulars
• Email IRAS at [email protected] to inform us the company’s new business activity and the effective date of change
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C ’ R i t d AddC ’ R i t d Add
Corporate Tax Obligations
Company’s Registered AddressCompany’s Registered AddressView your address at the e-Service “Corporate Profile / Contacts & Ale ts” t m t i go g& Alerts” at mytax.iras.gov.sg
If the address is not that of your company’s registered office, you will need to:
• Inform ACRA via www.bizfile.gov.sg on the change of the company’s particulars. There is no need to inform IRAS separately
• For urgent updating by IRAS, fax or email us ([email protected])the details:
Company’s tax reference number; Company s tax reference number;
Company’s name; and
Company’s new address that has been updated with ACRA
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 193
OthersOthersOthersOthers
A. Budget 2015 HighlightsA. Budget 2015 Highlights
B. Wage Credit SchemeB. Wage Credit Scheme
C Q & AC Q & AC. Q & AC. Q & A
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(A) Summary of Budget 2015 Changes(A) Summary of Budget 2015 Changes
Tax Changes SummaryExpiry of PIC Bonus The PIC Bonus will expire in YA 2015
Expansion of “PIC IT and Automation Equipment List”
With effect from YA 2015, the List is expanded to include Waste management equipment
Enhancement and Extension of Tax Deduction for Donations
300% deduction for qualifying donations made from 1 Jan 2015 to 31 Dec 2015
250% deduction extended for qualifying donations made from 1 Jan 2016 to 31 Dec 20181 Jan 2016 to 31 Dec 2018
Extension of the Wage Credit Scheme (WCS)
Extend WCS for 2 years (i.e. 2016 & 2017) Lower co-funding rate of 20% for wage increases given in 2016
and 2017 Wage increases given in 2015 that are sustained in 2016 and
2017 will be co-funded until 2017
Corporate Income Tax Extended for 2 years (i.e. 2016 & 2017)rebate (YA 2016 and 2017)
30% rebate on corporate tax payable (except final withholding tax on income)
Subject to cap of $20,000 per YA
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 195
Assistance and Service ChannelsAssistance and Service Channels
Website • Home > Businesses > CompaniesHome > News & Events > Budget 2015 OverviewWebsite
iras.gov.sg• Home > News & Events > Budget 2015 – Overview
of Tax Changes
• [email protected] for general tax matters• [email protected] for payment matters
i dit@i f P d ti it d I tiEmailEmail • [email protected] for Productivity and Innovation
Credit
aEmail
• For companies: 1800-356-8622• 8.00am to 5.00pm from Mondays to Fridays
• Best time to call: 8.30am – 10.30amHelpline
• Best day to call: Friday
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 196
Please complete our online Feedback Form here after the seminar:https://www.iras.gov.sg/irashome/Feedback/Feedback-Form-Company-s-Tax-Obligations-Seminar-2015/
Your feedback will assist us in planning and organising our future seminarsYour feedback will assist us in planning and organising our future seminars. This information aims to provide a better general understanding of IRAS’ practices and is not intended tocomprehensively address all possible tax issues that may arise. This information is correct as 7 July 2015.While every effort has been made to ensure that this information is consistent with existing law and practice,should there be any changes IRAS reserves the right to vary our position accordingly
© 2015 Inland Revenue Authority of Singapore. All Rights Reserved. 197
should there be any changes, IRAS reserves the right to vary our position accordingly.