What Do Taxation Services Include?
Taxation services in Singapore offer guidance and solutions to various tax-related matters. A tax specialist provides professional advice to clients in all areas of the tax system, including tax planning and risk mitigation.
What Kind of Tax System Does Singapore Use?
Singapore is recognised internationally for its relatively simple, efficient and competitive tax system. Its tax revenue collection comprises corporate tax, personal tax, Goods and Services tax (GST) and property tax.
How Casey Lin & Co. Can Help
We provide a wide range of taxation services in Singapore that help companies remain compliant with all tax regulations, reduce tax liabilities, and keep to strict deadlines.
For companies that need an extra hand, engaging a tax consultant firm can allow them to focus on their day-to-day operations while their tax obligations are well looked after.
At Casey Lin & Co., we provide various business solutions including management consultancy and efficient taxation services.
Corporate Tax
What Is Corporate Tax?
Corporate tax is a direct tax levied on the company's net income or profit. In Singapore, a single-tier corporate tax system is applied to all companies. The standard corporate tax is at a flat rate of 17%.
Who Needs to Pay Corporate Tax in Singapore?
Under the Income Tax Act, all companies (resident and non-resident) that have chargeable income derived from or remitted to Singapore are required to pay corporate tax.
Every ACRA-registered company is required to comply with Singapore IRAS tax filing regulations. With frequent changes to tax legislation, it is critical that companies keep up to date with the fast-changing and dynamic regulatory requirements and incorporate tax incentives into their business plans to maximise returns.
Our team offers effective tax compliance advice, manages your tax issues in an efficient manner and builds personalised tax strategies to manage your company’s risk exposure.
Our services include:
- Advising on the Estimated Chargeable Income filing
- Filing of annual tax return (Form C and Form CS)
- Preparation and submission of corporate tax computation with relevant schedules
- Verification of Notice of Assessment from IRAS against the tax computation
- Application for Certificate of Residence
- Application of Tax waiver and Tax clearance
- Attend to queries from IRAS and clarification on tax matters
- Any ad hoc correspondence or objection lodged with the Comptroller of Income tax
Personal / Individual Tax
What Is Personal/Individual Income Tax?
Personal or individual income tax is a direct tax levied on wages, salaries, investments and any forms of income generated by an individual or family unit. Personal income tax rates in Singapore depend on an individual’s income bracket and residency status.
Why Do I Need to Pay Personal/Individual Income Tax?
Personal income tax is an important source of revenue for the government to fund public infrastructure, goods and services. In Singapore, personal tax rates range from 0% to 22%, making it one of the lowest individual tax rates in the world.
What Is the Penalty for Not Declaring Personal/Individual Income Tax on Time?
The Inland Revenue Authority of Singapore (IRAS) will take action against the individual if the declaration and payment of personal income tax fails to meet the stipulated deadline.
All Salaried Employees, Sole-proprietors and Partnerships are liable to file their tax return on their yearly earnings in Singapore to IRAS by 18 April of the following year. We can assist in the declaration of personal incomes and utilise relevant tax incentives and reliefs.
Our services include:
- Preparation and submission of individual income tax returns (Form B/B1)
- Preparation and submission of Withholding Tax (Form 21)ha
- Verification of the Notice of Assessment from IRAS against the tax computation
- To attend to the queries from IRAS and clarification on tax matters
- Any ad-hoc correspondences or objections lodged with IRAS
GST Filing Services
GST is a self-assessed tax and any business in Singapore is required to be GST registered if the turnover is S$1 million or above. However, the company can choose to or voluntarily be GST registered.
Our team is well equipped to advise on registration and compliance matters.
Our services include:
- GST registration
- GST De-registration
- Filing of GST returns (monthly or quarterly basis)
- Other Tax Matters
Frequently Asked Questions (FAQs)
What Is a Tax Return?
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A tax return is a document filed with the tax authorities that details income, expenses, deductions, and other pertinent tax information for a specific period. In Singapore, a tax return can either be for an individual (personal tax return) or for a business or organisation (corporate tax return), which must be filed annually with the Inland Revenue Authority of Singapore (IRAS).
This document serves several purposes for both the government and taxpayers, such as:
- Ensuring the accurate calculation and collection of taxes
- Promoting fairness and transparency in the tax system
- Providing taxpayers with access to tax benefits
- Maintaining compliance with legal requirements
What is Corporate Income Tax Rate in Singapore?
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The corporate income tax rate in Singapore is imposed at a flat rate of 17%. This competitive rate applies to both local and international companies and they are subjected to taxation based on their income sources. In addition, companies can take advantage of corporate income tax rebates to help reduce their business costs and support their restructuring efforts.
How Do You Calculate Corporate Tax Returns in Singapore?
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The corporate tax returns in Singapore are calculated by determining the taxable income. The tax payable is computed using the current corporate tax rate at 17%. From the amount, subtract all tax rebates applicable to the company and any taxes deducted at source. The total amount will be the company’s net tax payable.
To calculate the taxable income in Singapore, a company may follow these steps:
- Deduct Non-Taxable Income: Subtract the non-taxable income from the company’s income, including capital gains, sale of fixed assets, gains on capital transactions, foreign exchange, foreign-sourced dividends, and other tax-exempt income under the Singapore Income Tax Act.
- Adjust Net Investment Income: Non-trade income or investment derived from interests, dividends, and rental are evaluated separately to ensure that each type of investment income is taxed properly without including expenses.
- Deduct Qualified Business Expenses: Certain expenses incurred wholly and exclusively in the production of trade or business profits are allowable deductions from a company's income. These include employee wages, office rental costs, and research and development (R&D) expenses.
- Deduct Capital Allowances: A company may be entitled to claim "capital allowance" to offset the wear and tear on fixed assets, such as office equipment and industrial machinery. Unused capital allowances on fixed assets from previous and current accounting periods are tax deductible.
- Deduct Unutilised Losses: A qualified loss must arise during a business operation and has not been used. The deduction can be made in the following year in which the loss was incurred. Unadjusted losses may be carried forward to the next assessment year indefinitely under certain conditions.
- Deduct Unutilised Donations: Tax deductions can only be claimed on donations made to approved public institutions.
What Tax Incentives are Available for New Start-ups?
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Singapore offers the Start-Up Tax Exemption (SUTE) to support and encourage the growth of start-up companies. This tax exemption scheme allows qualifying companies to receive a 75% exemption on the first S$100,000 of chargeable income and a 50% exemption on the next S$100,000 in the first three consecutive years of assessment.
To qualify for this tax exemption, start-ups must meet the following requirements:
- A Singapore-registered company
- A tax resident for the assessment year
- A maximum of 20 shareholders within the company during the assessment year
How can I Reduce My Personal Income Tax in Singapore?
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The Singapore income tax system is based on a progressive framework, which imposes higher tax rates on higher incomes. Nevertheless, there are some strategies that can help minimise the personal income tax such as topping up the Central Provident Fund (CPF), Supplementary Retirement Schemes (SRS), and charity donations.
Here are several ways to reduce your personal income tax.
- Upgrade Your Skills: Under the Course Fees Relief scheme, individuals can claim tax relief up to S$5,500 per year on course fees they have incurred, provided that the course is relevant to their employment. The claim may still be made if the course enables the individual to change careers.
- Donate to Charity: Individuals may qualify for tax relief by donating to any charity registered with the Institute of a Public Character (IPC) in Singapore. They can receive tax deductions of 2.5 times the qualifying donation amount.
- Topping Up CPF: The Central Provident Fund (CPF) is a social security savings plan in Singapore designed to help individuals save for retirement, healthcare, and housing needs. The CPF top-up on the Special Account allows for equal deductions on chargeable income of up to a maximum of S$7,000 per year.
- Claim NSman Relief: The NSman Relief program provides tax benefits to NSmen of the Singapore Armed Forces who contribute their time and effort to fulfil their NS duties by reducing their taxable income, leading to a lower overall tax liability. They can claim between S$1,500 and S$5,000, while their spouses and parents may each receive S$750 in tax relief.
- Life Insurance Relief: A life insurance tax deduction may be available to individuals whose combined total of mandatory employee CPF contributions, self-employed Medisave or voluntary contributions, and voluntary contributions to their Medisave account for the previous year was less than S$5,000.
- Supplementary Retirement Scheme (SRS): Aside from supplementing CPF savings, contributions to SRS also provide a dollar-to-dollar tax relief for individuals. The contributions can be deducted to the final tax payable to maximise tax savings. The maximum annual SRS contribution from Singapore citizens and PRs is S$15,300 and S$35,700 for foreigners.
What Are the Benefits of a GST-registered Company?
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Being a GST-registered company in Singapore offers several benefits for companies, such as tax benefits, cost-effective business operations, and improved brand name. The primary benefit being able to claim the 8% (soon to be 9% in 2024) tax from their purchases.
What are the Benefits of Outsourcing Taxation Services?
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When you hire a tax consultant to review your taxes and financials, you can be assured of an efficient and reliable process as they will ensure optimal, accurate and on-time tax filing.
How to Choose a Tax Filing Service Provider in Singapore
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To ensure you are engaging with a reliable tax filing service provider, take the time to review the agent’s licenses, experiences, track record, and reputation. You should also look for a provider offering a range of services suited to your specific needs, such as tax planning, filing, compliance, financial reporting, and tax advisory.
