- Business Use Test (apparatus used for carrying on the

P/E: FOREIGN ENTERPRISES DOING BIZ IN SG Trading business)

‘IN’ or ‘WITH’ - Business Premise Test (not part of the place, setting or
TAX COMPUTATION P/E: Minimum level of activity that would render a foreign premises)
Net Profit as per P/L enterprise taxable in another country (see treaty) - Apparatus kept for permanent employment in business,
Tax adjustments: Asset test – fixed place of business maintained by enterprise ≠stock in use
Less: Credit items included in P/L but not taxable, e.g. loss Agency/Relationship test – dependent agent acting on behalf - Functional Test
on disposal of enterprise Plant: blinds, carpets, escalator, lifts, MV, movable ramps,
Less: Credit items included in P/L but taxable as separate Activity test – supervisory? Purchasing unit? partitions...
source • Existence of business - concept of P/E Not Plant: fountains and water features, sanitary fittings,
Add: Income not included in P/L but taxable, e.g. FSI • Not P/E: warehousing, mere purchasing function, stairs, lights...
remitted representative office
Add: Expenses included in P/L but not deductible, e.g. dep, s19 Capital Allowances: IA = 20%, AA = (Cost-IA) ÷ Tax
donations Life
s15(1) EXPENSES PROHIBITED
Less: Expenses not included in P/L but deductible AA deferrable (claim AA, asset has to be used at the end of
a) Private or domestic expenses
Less: Further deductions BP*)
b) Expense not wholly and exclusively for purpose of
Adjusted Profits
acquiring income s19A Capital Allowances (on due claim) – s19A dun need
Less: Special Deductions, s14Q - Renovation &
c) Capital withdrawn or sum employed or intended for *end of BP
Refurbishment Expenses
capital... income • 1 year write-off 100% – specific assets, s19A(2)-(10)
Less: Capital Allowances, IBA, BA, (Add: BC = SP > TWDV)
d) Capital employed in improvements - Computers, website, prescribed automated equipment
S10(1)(a) income (net)
e) Sums recoverable under an insurance or contract of (PAE)
Add: Non-s10(1)(a) income, e.g. dividends, interest income
indemnity - Power supply generator in event of power failure
Statutory Income
f) Rent or repairs to premises not occupied for producing - New replacement of existing diesel-driven goods vehicles
Less: Unabsorbed business losses
income and buses
Less: Approved donations (250%)
g) Singapore or foreign income tax (tax ≠ expense) - Assets costing not more than $1,000 subject to $30,000
Assessable Income or Chargeable Income before
j) s12(6) payments (interest and other borrowing costs) paid maximum
Exempt Amount [b]
by person outside Sg to another person outside Sg unless • 2 years write-off: 75%-25% (2009 Budget Proposal for
Less: Group Relief, Carry back
accounted under s45 WHT YA10/11)
Less: Exempt Amount (75% of $10,000 + 50% of next
k) Car expenses • 3 years write-off (33 1/3%)
$290,000)
e) Exceptions – taxis, cars for driving instruction, private hire Qualify for CA: capital improvement to existing
Chargeable Income
cars, cars registered outside Sg and used extensively outside plant/machinery
Tax Payable @ 17%
Sg : Exchange loss incurred
Less: Foreign Tax Credit, e.g. s50A or DTR
: Incidental cost eg purchase tax, installation,
Tax Payable/Refund [a]
delivery cost
Singapore Effective Tax Rate = [a] ÷ [b]
Motor vehicles (except S-plate cars) – s19A 3-year write off
Corporate Tax rebate(lower of 20% or $10,000)
from YA09
Net Tax Payable s14(1) GENERAL DEDUCTION FORMULA (Source by
Balancing Adjustment s20
source concept)
Balancing Charge = Selling price > TWDV
CHARGING SECTION: S10(1) Deducted all outgoings and expenses wholly and exclusively
Balancing Allowance = TWDV > Selling price
(a) gains or profits from Trade, Business, Profession, Vocation incurred
• S24 election. Sale is deemed to be the transfer price, aka
(TBPV) during that period by that person in the production of the
TWDV.
(b) gains or profits from employment income
• Balancing charge is restricted to amt of allowances
(d) dividends, interest or discount
Interest expense – s14(1)(a): Any sum payable by way of previously granted
(e) pension, charge, annuity
interest upon any money borrowed by that person where the
(f) rent, royalties, premiums and other profits arising from
Comptroller is satisfied that the interest was payable on INDUSTRIAL BUILDING ALLOWANCES (IBA)
property
capital employed in acquiring income • Definition: manufacture, processing, storage, prescribed
(g) gains or profits of an income nature not falling within (a)-
purpose
(f)
Borrowing Costs other than Interest Expenses: Other qualifying IBS: staff canteens, R&R rooms, childcare
Deductible borrowing costs, guarantee fees, bank option fees, facilities, washroom, carparks, roads, fences (structure)
TAX RESIDENCE OF COMPANIES
premiums on redemption of notes or bonds, prepayment • Initial Allowances (IA): 25%, s16(1) - when qualifying
s2(1): Control & Management of whose business is exercised
fees/early redemption activity commence
in Singapore
• Annual Allowances (AA): 3%, s16(4) – when building is in
-place of General Meeting
Repairs and Renewals – s14(1)(c): Repairs of premises, use (full QC)
plant, machinery or fixtures, Renewal, repair or alteration of
TAX RESIDENCE OF INDIVIDUALS (s2: two tests) Industrial building or structure (IBS): building or
implement, utensil or article
1. Qualitative test structure must not be used for a non-qualifying purpose,
• Initial repairs: • Law Shipping case (Cap×) • Odeon
Resides in Singapore except for such temporary absences s18(6) - except Sentosa hotel, land
Theatres case (Rev√)
there from as - Dwelling, retail shop, showroom, hotel, admin off or
• Improvements: not deductible (×)
may be reasonable and not inconsistent with his claim to ancillary purpose
be resident Bad & Doubtful debts - s14(1)(d): Bad debts incurred in - Subject to the 10% rule, s18(7)
TBPV, Doubtful TBPV debts with reasonably
2. Quantitative test Owner can claim • Construct IBS • Buy new IBS • Buy used
estimation/specific, recovery of bad debts
(a) Physically present ≥ 183 days in preceding calendar (2nd hand) IBS
Staff loan bad debt (×) Bad debt of loan other than TBPV (×)
year; or - Owner’s own qualifying trade • leased out for use in
(b) Exercises an employment (except company director) ≥ Employer’s Contributions to Pension & Provident qualifying trade
183 days Funds – s14(1)(e) - Lessee use IBS for its qualifying trade
in preceding calendar year Restrictions of Expenses: Medical expenses – s14(5) - 1% - Must have relevant interest at the end of the basis
of total employee remuneration. YA08 onwards - 2% if satisfy period concerned
3. Administrative concessions (2 or 3-year tax rule for non-
TMIS and PMBS. Restricted to S’porean workers, up to
residents) IBA – Claimable when the asset is in use
statutory contribution amt.
• Person who constructed IBS: 25% IA, 3% AA
Foreign Exchange Differences: Capital nature (×) • • Person who bought IBS (>1 Jan 2006), AA claimable, IA
CAPITAL VS REVENUE RECEIPTS
Revenue nature (√) claimable only if previously not claimed
1. Fixed vs Circulating capital
• IRAS concession. If not, revert to old: FX diff of revenue • BA/BC, s18(9): Add back notional allowance in the years not
(a) Fixed Capital – Assets retained or used in the business
nature must be realised = taxable/deductible claimed
for the
purpose of producing profit Pre-commencement Expenses: Not deductible (×)
(b) Circulating capital – Assets purchased in ordinary • Concession: Deduction allowed (√) for expenses of a
course of revenue nature incurred from first day of a/cg year - derives
Non-Qualifying Cost for IBA
business for resale/manufacture of a final product to its first $ of trading receipts
- Cost of land, stamp duty, legal expenses, interest expense
be sold
for construction (claimable under s14(1)a)
Special deductions: Deduction of expenditure that would
2. Tree vs Fruit analogy (asset = business permanent
not be allowable under general deduction formula:
structure = capital) INTELLECTUAL PROPERTY RIGHTS (IPR) S19B
- s14H: $100,000. Cost to facilitate disabled employees
Capex on acquiring IPR claimed over 5 years (20% per YA),
TAXABILITY OF RECEIPTS: 5 WWP’s (Capital or Revenue Net of legal and registration fee. Start from 1/11/03
Renovation or Refurbishment, s14Q: incurred in TBP till
Receipt)
15/02/2013
1. Payment for sale of assets of a business are prima facie PRODUCTIVITY & INNOVATION CREDIT (PIC)
- $150,000 for every 3-year period
capital receipts 300% for PAE (s19A) and IPR (s19B)
- $150,000 one-year claim, exception in YA10/11
2. Payments received for the destruction of recipients' profit- YA11/12 – cap $800K | YA13-15 – cap $600K
- Can be brought forward if unutilised. No group relief or
making
carry back
apparatus are receipts of a capital nature* LAND INTENSIFICATION ACT (LIA) Replace IBA from
- Prohibited: Designer/Professional fee, antiques, work of
3. Payments in lieu of trading receipts are of a revenue 23/2/10
fine art
character* IA – 25%, AA – 5% *Asset must be in use
4. Payments made in return for the imposition of substantial Further deductions: Additional deduction for expenditure Qualifying period: 1/7/10 to 30/6/15. Apply from 23/2/10
restrictions already allowed under s14 or allowed as special deduction: onwards
on the activities of a trader are on capital account -s14B: Approved Trade Fairs, exhibitions, maintenance Qualifying ind: pharmaceutical, petrochemical, aerospace,
5. Payments of a recurrent nature are more likely to be overseas trade office semiconductor
treated as For new building or existing buildingrenovation/extension
Approved Donations – s37: Cash to institutions of a public
revenue receipts
*Note: Cancellation of contracts (WWP 2 and 3) character, shares/units, Computers, gifts to approved
museums. No lucky draw!! (×) UNABSORBED CAPITAL ALLOWANCES
6 BADGES OF TRADE (transaction = taxable profit bears 250% - from 1/1/09 to 21/12/10 AVAILABLE OPTIONS IN SEQUENCE FOR UCA AND UBL,
badges of trade) e.g. YA08
1. Subject matter of the transaction Productivity & Innovation Credit – YA10 to 15 1. Loss Transfer under Group Relief Scheme [s37C]
2. Length of period of ownership -R&D s14D & s14DA, Registration cost of IPR s14A, Training, 2. Carry-back to YA 2007 [s37E]
3. Frequency of similar transactions Design Cost 3. Carry-forward to YA 09 [s23(1) & 37]
4. Whether supplementary work on or in connection with the -250% tax deduction for first $300K, 100% for balance (150%
property for R&D) (A) LOSS TRANSFER SYSTEM OF GROUP RELIEF – s37C
realised had been preformed Companies must belong to same group (>75%) (NOT in
5. Circumstances responsible for realisation – exigencies? CAPITAL ALLOWANCES foreign countries)
6. Motive at time of purchase PLANT: Apparatus used…in carrying on his business…fixed or 1. Current year unabsorbed capital allowances
7. Others: financing, feasibility studies – LT Loan, repayment movable, live or dead,…keeps in permanent employment in 2. Current year unabsorbed business losses including Further
ability? his business Deductions,
 exception: unutilised s14Q expenses cannot be transferred
3. Current year unabsorbed donations
Qualifying Group Companies
- Singapore incorporated companies (cannot foreign
incorporated)
- Shareholdings - Ordinary shares only (cannot have fixed
dividends)
- Members of same group - same accounting year-end
- Maintain 75% shareholding level throughout basis period
- Elect to transfer loss items – s37C(11)
Ordinary Shareholding Requirement
- >75% ordinary share capital in one company is
beneficially held,
directly or indirectly by the other
- >75% ordinary share capital in each of the 2 companies is
beneficially
held, directly or indirectly by a 3rd SIC
Transferor coy: must specify order of priority to claimant
s37c(12)
Claimant coy: cannot specify amount, only decide who
first

(B) CARRY-BACK RELIEF (s37E)

• Maximum relief of $100,000 [s37E(5)]
• Order of set-off , s37E(2): UCA, followed by UBL (no
donations)
• Carry-back against assessable income of immediate
preceding YA
- YA2008 – c/b to YA07
- YA2009 – c/b 2006, then 2007, 2008 (3-year carryback)
• Must satisfy following tests
- Same Business test, s37E(11) – Unutilised CA (UCA) only
- Shareholders’ continuity test for companies, s37E(12)–
UCA/UBL
(Same Shareholders must hold >50% issued shares at
both relevant dates)
• Relevant dates for Unutilised CA CARRY-BACK to 2007:
- First day of YA in which CA arose incurred (1 Jan 2010)
- Last day of YA in which CA is utilised (31 Dec 2007)
• Relevant dates for BUSINESS LOSS for CARRY-BACK:
- First day of loss/calendar year in which loss was incurred (1
Jan 2009)
- Last day of YA in which the loss was utilised (31 Dec 2007)
• s10(1)(a) BUSINESS LOSS [only S/H continuity test]
- Loss incurred in any TBPV, i.e. s10(1)(a) source
- Deductible against current year’s statutory income -
s37(3)(a) (FIFO)
- Order of set-off: s37(4)
- Statutory income from same TBPV, then other TBPV
- Statutory income from any other source, i.e. non-
s10(1)(a) income

(C) CARRY FORWARD (UCA - s23/BL - s37)

• Same Business Test: Taxpayer carries on same TBP – UCA
only
• Shareholders’ Continuity Test: >50% of the issued shares...
– UCA/UBL
• Relevant dates UCA for CARRY-FORWARD to 2011:
- Last day of YA in which CA arose (31 Dec 2010)
- First day of YA in which CA would otherwise be claimed (1
Jan 2011)
• Relevant dates BUSINESS LOSS for CARRY-FORWARD to
2011:
- Last day of loss year in which losses was incurred (31 Dec
2009)
- First day of YA in which loss would be deductible (1 Jan
2011)

(D) DONATIONS (s37)

• Only carry forward. Cannot carry-back for donations!!
• Set-off in following order after deducting business losses,
s37(7):
- Donations of prior YAs (FIFO basis), s37(9)
- Current year donations
- Transfer of current year’s donations under Grp Relief
Scheme, s37(8)
• 6 years to claim deductions, i.e. carry forward for 5 YAs,
s37(8)
- Must satisfy substantial shareholders’ test
• Relevant dates UNABSORBED DONATIONS for CARRY-
FORWARD:
- Last day of year in which donation was made
- First day of YA in which loss would be deductible (1 Jan
2011)

(E) SUBSTANTIAL CHANGE IN SHAREHOLDERS AND

SHAREHOLDINGS
- UCA cannot be c/f – s23(4)
- Losses and donations will be disregarded s37(12)
- Once disregarded, not allowed in any subsequent YA -
s37(13)

SINGAPORE-YUMLAND TAX TREATY

Article 12 – Royalties
5% for royalty and know-how payment
 (A) does not... carry on a business in sg and not have a - foreign tax on FSI versus (SETR%*Re-gross/Gross
P/E in sg; or FSI)
(B) carries on a business in sg or has a P/E in sg, but
OTHER INCOME the rendering of (3) TAX SPARING RELIEF: Tax credit given under treaty.
MOF - 1977 PRESS STATEMENT: Following payments fall assistance or service is not performed through that Deem tax paid in foreign country
outside scope of s12(6) or (7) if conditions are satisfied (i.e. business/PE+
not Sg source income): (4) DEDUCTION METHOD
(b) the mgt or assistance in the mgt of any TBP, where such
- s12(6) payments other than interest • Taxable on net foreign income received
mgt or assistance is performed outside sg or on behalf....
- Show-how payments- second limb of s12(7)(b) • No need to gross-up for foreign tax
(same as above+)
- Payment for management or assistance, etc - s12(7)(c) • Indirect deduction given for foreign tax paid
• Used when a resident person elects not to be granted tax
Conditions: • Taxation of Non-Residents: Income subject to DIRECT
credit
- Transactions performed outside Singapore; ASSESSMENT
method, s50(8) or when no other method of relief (ie. tax
- Arm’s length transactions; and - Normal Withholding Tax Rate: 17% (not final tax, can
exemption,
- Not with intent to siphoning off Singapore source income. claim expenses)
DTR, UTR) is available
- Final Withholding Tax Rate: 10% or 15% (must satisfy s43*)
INTEREST INCOME, ETC - 10%: Royalty – s12(7)(a)
DIVIDENDS
• Deemed Source Rule – s12(6): - 10%: Know-how payments – s12(7)(b). (not Show-how!!)
• Underlying Tax: Tax that is payable on the profits out of
There shall be deemed to be derived from Singapore – - 15%: Interest and related payments icw
which the
(a) any interest, commission, fee or other payment in loans/indebtedness, s12(6)
dividend is paid
connection with - 15%: Rent of movable property, s12(7)(d)
• Dividend Withholding Tax: Tax that is withheld on the
any loan or indebtedness or with any arrangement,
• Final Withholding Tax - Conditions, s43 dividend paid,
management,
- The final WHT will apply to qualifying gross xx payments and remitted to the tax authorities
guarantee, or service relating to any loan or indebtedness
under s12(x) • DTR cover UT, regross dividend in SI. DTR don’t cover UT,
which is –
where the following conditions are satisfied: gross dividend
i. borne, directly or indirectly, by a person resident in (a) payments are not derived by NR from any TBPV carried
SG or a P/E in on in sg
Sg except in respect of any business carried on (b) payments are not effectively connected with any P/E of
outside Sg through the NR in sg
a P/E outside Sg or any immovable property situated
- The following not qualified for final WHT = tax at corporate
outside Sg
17%
ii. deductible against any income accruing in or derived
(a) Beneficially own all issued shares of assignm (author,
from Sg
composer..)
(b) Any income derived from loans where the funds provided
• Withholding tax: When to pay IRAS?
by such
• By 15th day of the month following the earliest of the
loans are brought into or used in Sg
following dates
- Payment due date (liable to pay)
• s12(6A): does not apply to interest payments, only services
- Date of actual payment
outside sg
- Date of deemed payment •e.g. earliest = 10
(6) shall does not apply to payments relating to loans or
March, pay IRAS 15 April
indebtedness: DIVIDENDS
(a) for arrangement, management or service where such Distribution by a company to its shareholders in money or
arrangement, money's worth representing a share of its profits, otherwise
mgt, service is performed outside sg by a non-resident than by a return of capital
person and - Accrues on the date it is declared payable
(b) for guarantee where the guarantee is provided by a NR - Location of the source is where the company is resident
guarantor - A Sg resident company pays a Singapore dividend
Provided: Types of Corporate Tax Systems
DOUBLE TAXATION RELIEF
(i) the non-resident person does not carry business in sg or • One-tier system (exempt, not taxable)
• “received in Singapore” - s10(25):
has P/E in sg - Corporate tax paid by company is a final tax
(a) remitted to, transmitted or brought into Singapore
(ii) if the non-resident person carries on business in sg or has - Can claim tax credit for Underlying Tax paid by company
(b) applied in or towards satisfaction of any debt incurred in
P/E in sg, - Expenses incurred to earn exempt dividend income = not
respect of
then the arrangement, mgt or service; or the giving of deductible
a trade or business carried on in Singapore; and
guarantee is
(c) applied to purchase any movable property which is • Imputation System (dividend taxable)
not effectively connected with the business carried in sg
brought into sg - Corporate tax paid by company is not the final tax (no
or that P/E
underlying tax)
• Claiming Relief under Tax Treaties, s49: - Claim tax credit for tax paid by company (i.e. tax
INTEREST INCOME, ETC
• Claimant - Singapore resident deducted at source)
Interest, etc paid to non-residents
• Foreign tax paid/payable in foreign country - Expenses incurred in earning dividend income =
• Deemed Singapore Source - s12(6)
• Foreign income remitted or deemed to be remitted into Deductible
- 15% Withholding Tax: on interest and commission fees
Singapore
- Exemption/reduced tax rate, s13(4): promote PEST • Classical system: Tax on two levels: Company &
development in sg Shareholder
METHODS OF RELIEF FROM DOUBLE TAXATION
Rental Income (1) s13(8) TAX EXEMPTION
• Immovable property: source of agreement or location of - Foreign sourced dividend income (paid by non-Sg resident TAXATION OF INDIVIDUALS
source company) • Source of Employment Income
• Movable property: deemed source rule, s12(7)(d) - Foreign branch profits (only trade/business income of - Where the employment is exercised, s12(4)
branch) - Gains or profits from any employment exercised in Sg shall
Royalties: Any royalties, rentals or other amounts paid as be
- Foreign-sourced service income (in the course of TBP)
consideration for the use of, or the right to use deemed to be derived from Sg whether the income is
- (Service) Fixed place of operations in foreign jurisdiction
Know-how: Undivulged technical knowledge, information, received in Sg
(PE)
experience or technique necessary for industrial reproduction Allowance/Reimbursement
- If no fixed place of operation in FJ, then income is Sg-
of a product or process Personal benefit – taxable Business related – not taxable,
source
unless excess
• DEEMED SOURCE RULE – s12(7) • s13(9) CONDITIONS
There shall be deemed to be derived from Singapore – 1. FSI ‘subject to tax’ in country from which the income is
(a) royalty or other payments in one lump sum or otherwise received PERQUISITES
for the use 2. Headline tax rate of FJ at least 15% in year in which income 1) ACCOMODATION/HOUSING BENEFIT, s10(2)(c) - for
of or the right to use any movable property; is received non-director
(b) any payment for use of or right to use scientific, technical, 3. Comptroller is satisfied that tax exemption is beneficial for - Lower of 10% of ALL employment income or annual value
industrial taxpayer of premises
or commercial knowledge or info or the rendering of [Concession: condition satisfied if tax exemption is a direct - Then, that lower amount less (minus) rent paid by
assistance or consequence of FJ being granted tax incentive for carrying out employee
service icw with application or use of such knowledge or substantive biz in FJ] For director: Remuneration > AV of premise, taxable @ AV
info Remuneration < AV of premise, same as non-
• Fixed Place of Operation: Refers to a place of mgt, an
(c) any payment for the management or assistance in the director
office, or a certain amount of floor space at the disposal of
management of 2) Interest Subsidy Interest-free or subsidised loan
person carrying on a TBP of rendering services thru which
any trade, business or profession; or - Scheme available to all employees on similar terms - Not
employees perform income activities
d) Rent or other payments under any agreement or Taxable
- Must have features of permanence
arrangement for the - Scheme available ONLY to specific persons - Benefit
- Be at the disposal of the person on an ongoing basis
use of any movable property, which are borne, directly or Taxable
- Is used regularly by person to carry on his TBP of
indirectly, by
rendering services 3) - Employee’s income tax liability borne by employer
a person resident in Sg or a P/E in Sg (except in respect of
any business TAX EXEMPTION OR REDUCTION - s13(12): apply for - Taxable
carried on outside Sg through a P/E outside Sg) or which Partial or full exemption; or concessionary rate of tax - By - Insurance premiums (NOT taxable if ER is beneficiary)
are Minister’s Order - Subsidy/allowance for licensed childcare – Tax exempt
deductible against any income accruing in or derived from - One year tax moratorium, 22-Jan-09 to 21-Jan-2010 (FSI tax - Home leave passage: Under IRAS concession, the
Sg exempted) taxable benefit of
leave passages is computed as 20% of their value if the
• s12(7A): Services done outside sg. Shall not apply to any (2) TAX CREDIT METHOD passages are
payment for - • Non Treaty: s50A Unilateral tax relief: Applicable to to the employee’s home country. The concession is
(a) the rendering of assistance or service in connection with following income of Sg resident from non-treaty countries (for limited to only
the dividends, royalities*, overseas branch profits or income from 1passage each for the employee and his wife and
application or use of scientific, technical, industrial or any professional, consultancy...) 2passages for each
commercial - *Not borne directly/indirectly by person resident in Sg or child annually. Any extra trips is fully taxable.
knowledge or info... performed outside sg or on behalf of a P/E in Sg; or OTHER PAYMENTS
person - *Not deductible against any Sg-source income - Inducement payments: Compensation for permanent loss
resident in sg or a P/E in sg by a non-resident person who – Note: claim s50A credit where s13(8) tax exemption does not of status/
(i) is not an individual, is not incorporated, formed or apply Forgo a personal advantage - Capital Nature (not
registered in sg • Rule: Lower of Singapore and foeign tax payable on taxable)
(ii) in any event the FSI
 - Payment for future service (Taxable) • Restrictive
covenants (Capital)
TERMINATION PAYMENTS
- Compensation for loss of employment: Retrenchment pay
relating to
cessation of an employment (a source of income) will be
capital
receipt even if contractual or amt calculated on length of
past service
- Payment in lieu of notice - Taxable
- Gratuity for past services – Taxable
NON-RESIDENT EMPLOYEES
- Up to 60 days: employment income exempted from tax,
s13(6)
- >60 days: employment income taxable
- NR: Greater of 15% on EI or tax payable on EI on
resident basis
- Resident: tax on resident basis for the EI
GOODS AND SERVICES TAX

• GST Registration – Cost-Benefit Analysis

1. Compulsory – s9 and 1st Sch Para 1: If total value of
taxable supplies exceeds or is expected to exceed $1million
a. Retrospective test: look back this Q + last 3Q = >$1m?
If not, look at prospective test
b. Prospective test: applies at any date, exclude sale of
capital assets
2. Voluntary – 1st Sch. Paras 8 & 9 (Beneficial for export
company with lotsa GST suppliers)

• TIME OF SUPPLY – s11&12: When to account for

output GST
Earliest of the following 3 dates:
- Date of tax invoice
- Date payment is received From 1/1/11
- Goods removed or made available or when services are
performed (*)
Exception: 14-day Rule
- Use tax invoice date if the tax invoice is issued within 14
days of (*)
- Payment received prevail this 14-day rule

TYPES OF SUPPLIES (Determined by Place of Supply)

• Out of Scope supply: Sale of biz as going concern, sales
outside sg
• Exempt Supply: Supply made in Sg excluded under s22
and 4th Sch
- Sale and lease of residential properties
- Financial services to staff or related coy (except brokerage
fees-GST)
-Interest earned from bank
- Input tax not recoverable (exempt output tax, cannot
claim input tax)
• Zero-rated supply, s21: look at subject matter
- Export of goods (freight charges), international services-
s21(3)
-Service by SG firm rendered o/s SG (even if engaged by a
SG firm)
- Input tax is recoverable (unlike exempt supply)
• Standard-rated supply, s16: 7%, incl sale of capital
assets not amt to transfer of business, service/goods provided
by overseas to SG company.

VALUE OF SUPPLY (VOS)

-Value of supply + GST = Cash consideration
-Value of supply = OMV consideration (net of discount, GST
excl)
-VOS includes cost, insurance, freight charges, duties
CONDITIONS FOR RECOVERING INPUT TAX - s19, 20
• GST-registered person
• Used for the purpose of business
• Attributable to taxable supplies
• Documentary evidence, i.e. tax invoice
• Input tax must not be blocked – Reg 26 & 27
BLOCKED INPUT TAX - Reg 26 & 27
• Club subscription fees (trade association fees not blocked)
• Medical and accident insurance premiums (unless obligated
under Work Injury Compensation Act)
• Medical expenses (except work-injury compensation, pre-
employment
check-ups and compulsory annual medical check-ups)
• Employee’s family benefits
• Motor cars (E/S/Q/SZ plates/private hire cars not claimable,
except for
vans, motorcycles and heavy vehicles, X/Y/Z plates are
claimable)

Gifts of Goods - Deemed Supply, 2nd Schedule, para 5:

GOODS ONLY
Gift of goods being a business asset is treated as a supply of
goods unless
- Gift not >$200 and does not form a series (>3 times
within 3 months)
to the same person
-Private use of supplies
- Entitled to claim input tax credit of the good given away
- Deemed output tax paid by vendor