INCOME

Acq src of Inc | Acq means of pdtion | Acq/Imp/Disp Fixed Cap

R&R of biz premise for TBP allowed for 14Q Special Deductions
Test of Enduring Benefit (Revenue vs Capital Expenditure)
Qualifying Expenditure = General lightings | Electrical Installations |
Income tax shall be payable at the rates specified for each YA upon the ... bringing into existence an asset or adv for the enduring benefit
Fixed Partitions (Dismountable = Plant ND) | False Ceilings,
income of any person:
... asset or right acquired must have sufficient durability, not
Cornices | Floorings, Wall coverings | Doors, Gates, Windows,
Accruing in or derived from SG Accrual basis OR
Window grilles | Kitchen Fitting, Sanitary Fitting of Biz Premises
synonymous with everlasting
Received in SG from outside SG Receipt basis ($$ remit in SG The time over which the thing endures is a matter of degree...
Must not involve structural changes where approval is required
#
or retire debt or purchase moveable pty and bring it in
under
thenot
BCA
* Legal fee (capital) ND (unless is necessary for biz) | Audit fee D | SME : turnover not
> $10m,
> 200 employees
Excpt: 1) coy w/o opera in SG; 2) Oversea $$ for ovesea inv; 3)mix
Non-Qualifying = Designer/Prof Fees | Antiques | Works of fine ART
CAPITAL ALLOWANCE
pool; 4) headline rate at least 15%+subjected 2 tax, ok if exempt
P&M under S19 WTA or LIA expenditure will not qualify for S14Q
S19/S19A Wear & Tear Allowances (WTA) for P&M
In respect of S10 (1) Heads of Charge
All P&M (see 3 tests) for TBP (no V) eligible | S/SZ-pl cars ineligible Every relevant 3 year cap at prior YA13 - $150k | Wef YA13 - $300k
(a) Trad, biz, prof or voc (b) Employment (d) Div/Interest/Discount (e)
Eg Installtn, delivery, exchange loss, incidental cost relating to installtn Claim over 3 consecutive years | Cannot defer
Pension/Charge /Annuity (f) Rents/Royalties/Premiums/Profits from
Unabsorbed 14Q = Trade loss | Can C/F + C/B subj to cond | Can
Plant & Machinery (P&M) 3 Tests
Property (g) Other gains or profits of Income nature (Casual Svc inc)
GR for current yr S14 D wef YA13
Stock-In-Trade? (No Next Test)
Exceptions:
* If initially claim S14Q, subsequent replacement is under S14(1)(c)
Purchased for resale?
Individuals
Companies
Functional
Test
(Yes
Next Test)
R
NR
R
NR
Functions as an apparatus to carry on biz | Nature and Purpose
Taxed
Taxed
Taxed
Taxed
SSI (First Limb)
CAPITAL ALLOWANCE, TRADE LOSS, DONATIONS
Not just passive part of premises (Structure) where biz is conducted
Exempt
Exempt
Certain
FSI
rec
Not
Taxed
FSI rec in SG
Trade Loss (TL)
Premises Test (No Plant)
Not Taxed
Not Taxed
Not Taxed
FSI not rec in SG Not Taxed
Arise from S10(1)(a) | Deductible expenses > gross taxable income
Affixed to structure, doesnt appear to retain a separate identity,
Corporate Residence
SI from same trade -> SI from diff trade -> SI from non-s10(1)(a) inc
intended to be permanent, cannot be replaced in a short period
Control & Mgmt of biz Exercise of superior directing authority
Donations (DN) S37
CONSIDERED PART OF A PREMISE NOT PLANT
BOD meetings in SG R | Else NR
Not deductible before SI because not derived in pdt of income
BUT *Whole premise can be plant if integral to biz*
Individual Resident
Donation of money to Gov or approved institution of a public
S19
Normal
WTA
(Choose this if they are entitled to tax exemptions in the first few
Qualitative (quality of stay financial and social ties); Quanitative (183 years)
character (IPC) in SG | Non-cash ND | Vs Sponsorship ND
days ) (EXCEP: *2 year and 3 year concessions)
Deductible after SI (after TL) to arrive at AI | 250% of $ Donated
All P&M eligible | S/SZ-Plate cars ineligible
PMA Test Income vs. Capital Receipt (Tree or Fruit)
Budget 2015: 300% tax deduction for year 2015 YA2016
IA = 20% of CE | Cannot defer | P&M not necessary to be in use
Receipts from disposal/destruction of assets
6 year time limit of C/F | YE10 (YA11) inclusive set off latest by YA16
AA = (CE IA claimed)/Tax Life | Can defer | P&M must be in use
Capital (NT) Retained as means to produce income (alr in markt)
If IA not claimed, AA = CE/Tax Life
Carry Forward (C/F) & Carry Back (C/B) - Criteria
Income (T) Bought/Made and sold (Eg. Not in the market)
A. Business Continuity Test Unabsorbed CA only
S19A Accelerated Allowance 3 Years
Badges of Trade Test Determine existence of Tradbizprofvoc
Company must be carrying on same trade in the BP (Acc Yr) which
Dont apply to Services | Fail BOT Capital Gains | Exam dont use all All P&M eligible except S/SZ-Plate cars
CA arose and the BP (Acc Yr) of which CA is to be claimed
No IA | Can defer at any point in time | No need consecutive claims
Subject matter Ready mkt | Qty | Personal enjoyment | Nature of asset
B. Shareholdings Test UCA + UTL + UDN
AA = 1/3 of CE incurred in BP
Period of ownership Short Trade | Depend on nature of asset
Shareholding composition 50% of the total no. of issued
S19A(10A-10C) Accelerated Allowance 1 Year Writeoff
Freq of similar Txn Recurring Trade | Isolated txn may also be trade
shares held by or on behalf of same persons at 2 relevant dates
Low
Value
Assets

Simplification
Measure
Supplementary work done Yes Trade | work done to marketability
Rationale = Prevent buying Loss Co to avoid tax through GR
Cost of each asset $5k wef YA13 | YA05-YA12 <$1k
of asset | Eg Process, modification, improvement, marketing effort
Waiver of SHT if not to obtain tax adv | D against same trade
No IA | AA = 100% of CE | Can defer | Cap 30k per YA
Circumstances of realization Unplanned/Not in ord biz Capital
only Not tax motivated| Eg:Nationaltn, Privattn, listed in stock
Motive Short term profit making Trade | Mode of Financing? (Borrow from Remaining assets claimed under S19 or S19A
xchange | Commercial Reason | Anti-avoidance measure
bank likely ST) Repayment ability? | Feasibility study? (No likely to be trade)
Apply to assets purchased in YA | purchased before but CA claim
Fail SHT + No waiver = U amt permanently disregarded
deferred or prev claimed under S19 or S19A with TWDV b/f to YA
Corporate Residence
Carry Back
Carry Forward
DEDUCTIONS
Productivity & Innovation Credit (PIC) Benefits
Claimed
Arose
Arose
Claimed
PIC Computers & Prescribed IT and Automation Equipment
General Deduction Formula S14(1)
UCA
31.12.YA
1.1.YA
31.12.YA
1.1.YA
Qualifying Period = Expenditure incurred in YA11 to YA15
Satisfy conditions listed and not prohibited by S15
UTL
31.12.YA
1.1.CY
31.12.CY
1.1.YA
Expenses wholly full amount of expenses used in prod of inc
If other WTA elected for Com & PAE, PIC allowed based on tax life
UDN
31.12.CY
1.1.YA
& Exclusively Inc producing motive | Ignore effect & other adv
No IA | AA = 100% of CE incurred in BP | Can defer | No Cap
Carry Forward Order FIFO Basis
st
Incurred Legal liability has crystalized
Enhanced Allowance = 300% x CE | CE Combined Cap YA13-15 1 UCA BCT & SHT | Indefinite C/F | Utilized once profitable
During that period No Pre/Post commencement (Concession)
$1.2m over 3 yrs , YA16-18 $1.2m over 3 yrs
2nd UTL SHT | Indefinite C/F | Utilized once profitable
By that person Person claiming = Person incurring the expense No Enhanced Allowance if equip is purchased to lease or disposed 3rd UDN SHT | 6 years C/F | Utilized once got net SI
of within 1 year of purchase within 1 year of purchase
In the production of Sufficiently close nexus or connection to
Carry Back Order UCA 1st, followed by UTL
Base (100%)
Max D (400%)
activity Normal vs Wider Nexus Test
Set off against AI, after GR | Only for immediate preceding YA
YA13YA15
$1.2m ($400k x 3) $4.8m ($1.2m x 400%)
The Income Source-by-source basis
Lower of AI of preceding YA & (UCA + UTL) | Cap at $100k
YA
16YA18
$1.2m
(400k
x
3)
$4.8m
($1.2m
x
400%)
Specific Deductions under S14(1)
Need to elect for it | Not automatic
PIC+
Scheme
for
SMEs
YA15-YA18
S14(1)(a) Interest Expense & Other Borrowing Cost
Group Relief
SME = Turnover <= $100m OR Employees <= 200
D Interest incurred on a principal sum used for the purpose of
Only current year UCA + UTL + UDN
Cap from 400k per annum 600k per annum
producing the income which is subjected to tax
Claim till AI = 0, Excess Co with highest AI | Save NCTR >$300k
S14(1)(b) Rent
CE Combined Cap YA13-15 $1.4m over 3 yrs, YA16-18 $1.8m
Criteria:
Transfer till AI = 300k to max NCTR
D Rent payable for land or building occupied for acquiring income
over 3 yrs
Singapore Incorporated
S14(1)(c) Deductions for Repairs 1st Limb Cap Expenditure
Base (100%)
Max D (400%)
Both Transferor & Claimant = Incorporated in SG (SIC)
D Replacement of a subsidiary part of an asset to restore to its
YA13YA15 $1.4m ($400k x 2 + $5.6m ($1.4m x 400%)
Accounting periods ending on same day
$600k)
original state/condition (Repairs D, Improvements ND)
Both Transferor & Claimant must have acc year end on same day
ND Initial repairs (put it in a position to produce income ND)
YA 16YA18
$1.8m (600k x 3)
$7.2m ($1.8m x 400%)
3rd Co (Holding Co) dont need same day
Consider: condition asset was purchased (can operate?) | amt paid Balancing Adjustment (BA) & Balancing Charge (BC)
Members of Same Group (Ordinary S/H Test)
vs commercially useable condition | Accounting treatment (exp?)
Circumstances = P&M ceases to belong to trader | ceases perm to 1st lvl 75% ord sh held by ea other | 75% of both held by a 3rd
S14(1)(c) Deductions for Renewal/Replacement 2nd Limb
be used for taxpayers trade | Trade perm discontinued
SIC Co
ND Cost of orig item = Capital exp, under S19 or S19A
CA not claimed in year BA/BC arises | Sales Proceeds must = OMV Ord S/H = Var profit | Not treasury share or fixed div
D Renewal | Replace the whole of substantially the whole asset | BA = SP < TWDV | Deductible
Shares held by FIC or Individual are disregarded
Cost of replacement to extent it does not attribute to improvement
BC = SP > TWDV | Taxable | *Restricted to CA previously claimed 2nd lvl 75% of residual profits/assets avail for distribution for other
Initial Repairs Bring asset to income prod state ND
Industrial Building Allowance (IBA) Phasing out
Election under S37C(11)
Excludes renewal of P&M subject to CA & Reconstr or rebuilding of Building/Structure in use for a qualifying trade & not in use for non Must make an irrevocable election | Not automatic
any premise, buildings, structure/works of a perm nature
qualifying purposes
* Companies limited by guarantee is not eligible for GR
S14(1)(d) Bad/Doubtful Debts (Impairment)
IA = 25% of CE incurred in BP
Taxation of (local) corporate profits and distributions
D if Trade Debt | Previously included as trading receipt of claimant |
AA = 3% of CE, provided Building/Structure is in use at end of BP
No Integration (Classical two-tier system) tax indiv and company
Biz which debt arose must not have ceased
BA when relevant interest in exp sold | Relevant (Leasehold)
Full Integration S/H taxed directly on coy profits (even if no div)
Recovery Taxable if previously allowed for deduction
interest comes to an end | IB/IS demolished, destroyed or otherwise Partial Integration (Full imputation sys) TDAS - SH tax = refund (SH)
S14(1)(e) Provident Fund (CPF)
ceases altogether to be used
One tier system Profits corp taxed, dividend paid to SH is exempt
D if Approved (CPF) | Employee engaged in production of
CE after 23.2.2010 no IBA | CE before 23.2.2010 eligible for IBA
New Corporate Tax Regime (MUST APPLY TO ALL CI)
employers income | Obligatory | Excess or Non Obligatory ND
until CE fully written off or BA event occurs
Apply to R & NR Co | Dont apply to NR Co inc sub to final WHT
S14(2) Remuneration to related Employees
Deductible to the extent it is reasonable compare with mkt salary Land Intensification Allowance (LIA)
1st $10k 75% Ex | Next $290k 50% Ex | >$300k = $152.5k
CE on const/renov of Building/Structure | On industrial land in URA
Contactual benefits are D whether there is cessation of biz or not
* Total Savings = (Amount transferred NCTR) x Tax Rate
master plan | Promotes intensified use of land for presc. Industries
not in contract
Ex-Gratia
retrenchment payment D | ND if cessation of biz
Qualifying Cond = CE incurred or Planning/Conservation applied
TAX COMPUTATION
S14(5), (6A), (6B), (7), (8) Medical Expenses
after 23.2.2010 | Application to, & approval by EDB
Net Accounting Profit (Before Dep. & Tax)
Lower of Exp or Cap of 1% of total employees remuneration
IA = 25% of CE incurred in BP
Add:
Exp
charged
but
not
D (E.g. Dep, Loss on Disposal)
2% Cap for portable med benefits which continues if employee left
AA = 5% of CE, provided at end of BP taxpayer has relevant int in
Add: Exp charged to produce non S10(1)(a) Income
Expenses not specifically under S14
expenditure & >80% of floor area used for approved trade
Add: Taxable 10(1)(a) Income not included in P/L (FSI remitted)
Allowances
No BA on disposal
Add: Balancing Charge (SP>TWDV, Restricted IA + All AA claimed)
Staff remuneration expenses D (usually Taxable for Employee)
Add: All Donations (Not just approved)
S19B
Writing
Down
Allowances

Intellectual
Property
Sum of $ agreed | Lump Sum | Designated for specific purpose
Less: D Exp not included in P/L (E.g. Rev Exp capitalized to B/s)
CE incurred by company on Intellectual Property Rights (IPR) for TBP
Reimbursement D if Biz purpose | S14S15 (eg Spl cars ND)
Less: S14B Further D | S14Q Special D
WDA p.a. = 20% x CE incurred (over 5 years) | PIC+ Eligible
Foreign Exchange Differences
Less: Non-Taxable/Tax exempted Inc credited (E.g. Gain on Disposal)
PIC Enhanced WDA p.a. = 20% x 300% x CE | CE Combined
Realized
Unrealized
Less: Non S10(1)(a) Income credited (Interest, Div, Royalties)
Cap over 3 yrs YA13-15 $1.2m ($4.8m), YA16-18 $1.2 ($4.8m)
Capital
Loss = ND; Gain = NT Loss = ND; Gain = NT
Adjusted S10(1)(a) Profit/(Loss)
Transfer of P&M or IB/IS between related parties S24
Revenue
Loss = D; Gain = T
Loss = D; Gain = T*
Less: CA brought forward (FIFO Basis)
Election made under S24 | Purpose = Mitigate taxes as group
*Admin practice | Unless company opt out to Loss = ND; Gain = NT
Less: Balancing Allowance (TWDV > SP)
Further Deductions S14B (additional deduction for expenditure alr allowed) Cond = Buyer & Seller must be related parties | Asset used for
production of income before & after trans | Not previously leased by Less: Current yr CA WDA | S19, S19A WTA | PIC (If any) | IBA/LIA
Additional D - 100% of exp incurred (apprv trade fairs/ o/s trade ofc)
n S10(1)(a) Net Income
Seller to Buyer | Not tax motivated Genuine commercial Tranxact
Special Deductions S14H (deduction for expenditure normally not allowed)
Add: Non S10(1)(a) Income (Div, Interest if non exempted)
100% Deduction given for expenditure on building modifications to Buyer and Seller Treated as the same person
Less: Non S10(1)(a) Expenses
Seller:
facilitate work and mobility of disabled employees
Add: Foreign-sourced Income (Gross up unless deductible)
deemed to have sold based on TWDV
Enhanced Deductions S14B (Qualifying Training Expenditure)
Statutory Income (SI)
No BA or BC
300% of training expenditure (incl internal and external)
Less: Trade Loss brought forward (FIFO Basis)
Buyer:
Capped: YA 13-15 1.2m (3.6m) for 3 years | YA 16-18 1.2m
Less: Current year Trade Loss
#
SME (fr YA15): YA 13-15 1.4m (4.2m) for 3 years | YA 16-18 1.8m deemed to purchase asset on TWDV
Less: Approved donations brought forward (Max 6 year carry forward)
Continue to claim CA:
Prohibited Deductions S15(1)
Less: Current year Approved (IPC) Donations @ 250%
(a) Domestic or Pte Exp (b) Exp not wholly & excl incurred in the prod
Assessable Income (AI)
of inc (e) Sums recoverable under insurance or contract of indemnity
Less: Group relief (Current year UCA, then UTL and UDN)
(f) Rent of or repairs of premises not used for the purpose of producing
Less: UCA, UTL carried back | $100k Cap to preceding YA
Income (g) Income tax in SG & elsewhere (k) S/SZ-Plate Car (Not G-pl)
Less: UCA, BL, UD carried forward
No IA allowed
Prohibited D of Cap | Sums employed as Cap S15(1)(c)
Why S24? For seller: No BC, more allowance | For buyer: Alr in loss Chargeable income before NCTR
Revenue Exp Deductible
Less: NCTR partial exemption
position or a lot of CA, do not need more CA
Working src of Inc | Perf Inc producing ops | Acq/Imp/Disp Circ. Cap
14Q Special Deduction Renovation & Refurbishment (R&R)
75% x 1st $10k = $7.5k | 50% x $290k | Max: $152,500
Capital Expenditure ND eg. Legal fees for loan buying capital A

Charging Section S10(1) ITA

A.

B.

1.

2.
3.

TWDV
remaininguseful lifeof asset

Chargeable Income
Tax Payable @ 17%
Less: UTC Lower of Foreign Tax/SETR* x FI-Deductions
Less: DTR from Interest, Branch profits, Dividends
Less: Corporate Tax Rebate (30%) | $30k Cap YA13-15
Net Tax payable
Capital Allowances (Adjustment Event)
Qualifying Capital Expenditure
Less: IA claimed
Less: AA claimed
TWDV at date
Selling Price/Insurance claim/Market Value
Balancing Allowance/Charge (Restricted to total IA + AA)
Capital Allowances (Normal Claims)
Normal AA under S19 | S19A | S19A(2) | S19(B)
Enhanced Allowance (PIC) = 300% x AA (Restricted to $1.2m cap)
Total Allowance for the year
TAXATION OF INDIVIDUALS (EMPLOYMENT INCOME)

Employment vs. TBPV

Extent of control: what work to be done and how to be done
Financial Rewards and Risks (eg. Salary, allowances, bonuses)
Invest in Cap assets or employment of assistants (eg. buy laptops)

Source of Income
Sourced in SG if duties are discharged in SG
Regardless of whether gains received in SG
Duties perf overseas | Part and incidental to SG Emp = SSI | T
Separate/Foreign Emp = FSI | NT
Gains or Profits from any Employment S10(2) ITA
A reward for past, present or future svc in course of discharging duties
Capital Receipts = Not Taxable
No part should be attributed to reward for svc | Substance over name
Inducement Payments Before commencement of employment |
Loss of PMA NT | Payment for future svc T | Conditional T
To compensate for loss of substantial personal rights, status or adv
Restrictive Covenant Payments In return for promise to not join
a competitor or set up competing biz Loss of future income NT
Compensation for Loss of Employment/Office Compensate
employee for premature termination of employees reasonable
expectation of continued employment into the future
*Reasonable expectation? Past svc adq remunerated?
*Taxable Salary in Lieu of Notice of Termination Direct substitution
for that salary if proper term notice is given
Allowance Generally Taxable Employment Income BUT.
Exceptions (i.e not taxable): Subsistence, Travelling, Conveyance
Entertainment Allowance For Biz | IF Prohibit by S15 T (S-plate)
Reimbursement for Biz NT (even S-Plate NT no personal benefit)
Perquisite (Benefits in Kind) Value = cost to Employer
BIK are rewards for employment services | Taxable

S40B at best R rates, if can 2/3 yr concession better cfm R rate

WITHHOLDING TAX

Direct Assessment
Tax directly assessed on Recipient | Gross Amt Recipient

Withholding Tax in SG

Conditions Inc subject to tax in foreign jurisdiction | Headline Tax

Rate 15% | Inc subject to tax in SG s13(7A)/(8) exempt Inc
qualify by forgo exempt | FTC permitted under Treaty (S50) UTCR
(S50A)
Pooled Credit = Lower of Pooled foreign tax & Pooled SG Tax
Must forego s13(8) exemption | NOT ALLOWED IF foreign inc
*SETR = (Tax@17% x CI) /
exempt in their country including tax sparing relief | qualifies for
AI
exemption in SG other than s13(8) | if SG resident incur a loss

Receipt of Inc by NR | Payer responsible to WHT during payment

No obligation if Income is exempt | Lower rate in Treaty prevails
Remitted to IRAS by 15th of 2nd Mth E.g. 1st Aug 15th Oct
Payment deemed Earlier of liab to pay | actual payment | reinvest Foreign Dividend received in SG
Assuming that exemption of S13(8) to (11) DONT APPLY
WHT Borne by NR = Gross x rate | R = Regross x WHT Rate
If UT + DWT Re-grossed Amt | Only DWT Gross Amt
Final WHT No Tax Ret | Non-Final WHT Tax Return for D Exp
Dividends
Treaty Country
Non-Treaty Country
Withholding Tax Rates
cover DT only ->Use Gross Div and claim FTC for DT only
Classical two-tier If IfDTR
DTR cover both DT and UT -> Use Regrossed Div and claim FTC
Generally WHT rate = 17% for NR Co (Non-Final)
for both
Reduced rate if Inc NOT derived through TBP or PE by NR in SG Withholding Tax
DTR Treaty
UTCR S50A(1)

IF NO TREATY:
Non-Final Final
Non-Final
Direct Assessment - TBP or PE
17%
Example
Withholding Tax
CI
S12(6) Interest / Commission loan
17%
15%
Tax @ 17%
S12(7)
Less: CTR
Rent from Movable Property
17%
15%
Royalty/Know-How payments
17%
10%
Less: Tax
Show-How payments
17%
previously
Management Fees
17%
withheld
* Intellectual property right (know-how) No WHT, got cap allowance

SOURCE OF INCOME

TB of NR S12(1) ITA (*Refer to treaty definition, Art 5)

Deemed SSI to ext gains/profits attri to activity derived inside SG
Treaty Country Treaty | No Treaty ITA S2(1)
Permanent Establishment - Min. level of presence (trading svc)
Min level of presence determine by Ext of activities carried out | Assets
owned? | Agency relationship established? | can be enterprise or individual

Trading in SG Biz presence (PE) | @ Indep arms length | SSI | T

Trading with SG FSI | NT
Definition of PE ITA S2(1) * Branch doesnt mean auto PE
Place of Mgmt | Branch* | Office | Factory | Warehouse | Workshop |
Farm/Plantation | Mine, Oil well, Quarry or Place of extraction of Natural
Resources | Building/Work site/Construction, Installation or Assembly Proj
Supervisory activities in connection with Building/Work site...
Person who has & habitually exercises an authority to conclude contracts
| maintains a stock of goods for purpose of delivery | habitually secures
orders wholly or almost wholly for that person or for enterprise controlled
by that person
BUT. Exceptions for s2(1) i.e. considered no PE
Office in SG for purchasing goods | Mere warehousing of goods in SG | Rep
office in SG confined to promotional activity & liaison work permitted

Underlying Tax
If treaty prov
If treaty dont prov

Full Imputation
Underlying Tax

One-Tier
Underlying Tax

DTR Treaty
UTCR S50A(2)

UTCR S50A(2) Sg Co owns

25% Voting Sh Or Minister waiver

Include gross Div (before DT) in SI, claim FTC for DT only!

DTR Treaty

UTCR S50A(1)

If DTR covers DT only, use gross div, no claim of FTC. If DTR covers
both UT and DT, use regrossed div and claim FTC for UT

DTR Treaty

UTCR S50A(1)

Tax Sparing Relief (Can be 1-way or reciprocal, check the treaty!)

Not DTR | Applies when no double taxation in place

Some Treaty provides for Relief | Normally Dev with Deving country
Preserve a tax incentive given in the country of source
Deems Tax suffered even if Tax Exempt Inc in foreign country
Lower of Deemed Tax suffered & SG Tax
GST

Scope of GST S(8) (Multi-stage consumption tax on the value added)

Supply (Collected by Biz) Supply | Gds & Svc | Taxable Supply |
Made in SG | By Taxable Person (GST Reg) | In furtherance of Biz
Importation (Collected by Customs) Gds | Into SG | By any Person

Supply

Definition (Anything done for a consideration)

Free (No consideration) Not a supply unless deemed by GSTA
No Supply W/o obs inv | Theft | Salary | Donation Can rec IPT
Deemed Supply 2nd Schedule to prevent Tax Leakage (i.e. GST)
(only if trader claims Input Tax | No deemed if never claim)
Biz gds disposed off for Free except Biz gift < $200 or
Industrial/Commercial Sample not available for sale to public or free
accommodation, F&B to employees
Biz gds diverted for free to non biz use Pte consumption
Market value/cost taken as value of the deemed supply
Other Income
Types of Supply (determined by place of supply)
Div Source where decision taken to declare div (BOD Meeting)
Out of Scope (OOS) Supply/No Supply
Rent from Immovable Property Where immov Property situated
Sales outside SG | Third country sale | sale of biz as going concern
Branch Profits Subject to Foreign Corp Tax
OPT not chargeable | IPT generally not recoverable
Deemed Source Rules S12(6) & (7)
E.g. Not GST reg | Gds overseas overseas | Pte Txn
Interest | Commissions & Fees relating to Loans & Indebtedness |
Royalty | Know-How Payments | Show-How Payments (SH of some KH Exempt Supply
Supply made in SG | Specifically excluded by S22 & 4th Schedule
(Training) | Management Service Fees | Rent from Movable Property
Tax Accrual of Employment Income
OPT not chargeable | IPT generally not recoverable
ANY CONDITIONS (Any met = Deemed derived in SG | SSI)
S10(1)(b) Income PCY basis
1.
Payer = SG Resident or PE | Exception: Not deemed if payment Exemptions (i.e No GST) Fin Svc (Interest from bank, sale of share R
Contractual Bonus Accrue in the year which svc is rendered
buyer, provision of loan, life ins) | Sale & Lease of EMPTY Residential Property
is with respect to biz outside SG through PE outside SG or with
Non-Contractual/Discretionary Accrue in the yr which is declared
Taxable Supply (Supply made in SG & Not exempt supply)
respect to immovable ppty outside SG OR
Directors Fees Accrue in year which is declared payable
OPT Chargeable | IPT Recoverable
2.
Payment = Deductible against his SG-Sourced Income OR
Tax Planning for Individual
Taxable Supply S21 Zero rated (0%)
3.
For 12(6) Income, loan proceeds are brought in/used in SG
Interest-Free/Subsidized Loans
Exception - S12(6A) & (7A) excludes (Exclude FSI | Not Ex SSI) Export of Gds | Overseas customer where svc performed in SG
Concession Employee no control or influence over Employer | No Loan Guarantee Fee
International Svc International Air Fare | Svc supplied directly in
substantial shareholding in Employer | Scheme open to all staff
connection to land or any improve thereto situated outside SG
Where Svc is performed outside SG, Loan Commission/Fee (Other
Employer Employee | Concession apply | NT
Taxable Supply S16 Standard rated (7%)
than Loan Guarantee) | Show-How Payments | Mgmt Fees
3rd Party Employee (Employer pay interest) | No Concession | T
All Taxable Supplies which arent zero-rated incl sale of cap assets
Satisfying Conditions of S12 (6A) & (7A):
Insurance Premium paid by Employer
Start
End
Place of supply
GST Treatment
1.
Provider = NR Person or not incorporated/formed/reg in SG AND
Benefit Employee/Dependents T (Group Insurance NT)
Singapore
Singapore
In Singapore
7%
2.
Provider doesnt carry on biz in SG & no PE | If have, perf of svc
Singapore
Overseas
In
Singapore
0%
Benefit Employer (Keyman) Reward Employer | NT
must not be through or effectively connected thru biz or PE AND
Overseas
Overseas
Overseas
Out-of-scope
Club Membership Fees paid by Employer
3.
Recipient = SG Resident Person or PE
Annual Subscription Fees T to extent of private use
1) Apply domestic TR 2) Search for Treaty TR 3) Choose lower TR Place of Supply S13, 15
Supply of Gds In SG if gds are physically in SG at time of supply
Indiv membership held in trust for Employer | Entrance Fee NT
Supply of Svc In SG if supplier belongs in SG | Biz or fixed
DOUBLE TAX RELIEF
Individual membership owned by Employee | Entrance Fee T
establishment most directly connected to svc in SG or Suppliers
Employer CPF Contributions
Receipt in SG S10(25) ITA
usual place of residence in SG (Co place of incorp = Resident)
Statutory Exempt in Employee (D for Employer) | Excess T
Regardless whether the src from which the Inc is derived has ceased
GST Registration S9 & 1st Sch
Remitted to, transmitted or brought into SG
Home Leave Passage provided by Employer
Compulsory or Voluntarily through Retrospective or Prospective Test
Taxable based on cost to Employer
Applied in or towards satisfaction of debt iro TB carried on in SG
Concession for Employee who are not SG citizens or PR
Applied to purchase movable ppty brought into SG | T = Gds SG Retrospective Test
Applies on 31/3, 30/6, 30/9, 31/12
T Benefit = 20% of cost | 1 return for self + spouse, 2 for child per yr Methods to relief Double Taxation
Total value of Taxable Supplies (Exclude OOS + Exempt + Cap) for
Expat 1st & Last Trip Relocation/Repatriation | NT
Credit Method Tax @ Gross | Provide Tax credit on Foreign Tax
current & past 3 quarter > $1m?
Housing Benefit (Rent-Free/Subsidized by EmpR | Not Hotel)
Exemption Method Full or Partial Exemption for income
Employee Taxable Benefit
Deduction Method Tax @ Net after FT | Given during Tax Loss position Yes Compulsory reg unless IRAS satisfied TS next 4 qtrs < $1m
Prospective Test
AV/Market Rate of property less total annual rent paid by EmpE
Tax Exemption
Applies at any date | Total value of TS next 12 mths > $1m
Furniture&Fittings Partly F, 40% of AV | Fully F, 50% of AV
S13(7A) Exempt for all FSI received in SG by resident individual
Actual
Expected
Treatment
Ulilities/HP bills/HousekeepR Actual cost paid by EmpR
S13(8) to S13(11) Exemption for the following income:
< $1m
>$1m
Compulsory Registration
Hotel/Serviced Apartment Actual cost by EmpR - EmpE paid
Foreign Dividends Paid by NR Co
>$1m
< $1m
Satisfy IRAS, need not register
Housing Allowance Taxed in full
Branch Profits TB income of overseas branch of SG R Co
>$1m
>$1m
Compulsory registration
Car Benefit (Use of Car provided by EmpR)
Service TBP income derived from fixed place of operations in
< $1m
< $1m
Need not register (Voluntary Registration)
* Note: aggregate taxable supplies of all separate business of the same owners
Taxable Benefit of New Car if Cost of Petrol Borne by
foreign jurisdiction | No fixed place TBP by SG R hence SSI
Compulsory Registration S9 & 1st Sch Para 1
EmpE = 3/7 x [(Car cost RV)/10] + $0.45 x Pte Km
S13(9) Conditions (Need to meet all)
Aggregation of al TS for Sole proprietor & Partnership
EmpR = 3/7 x [(Car cost RV)/10] + $0.55 x Pte Km
Income received in SG by a R person | On or after 1.6.03
Liability to register IRAS notified within 30 days
Coy reimb car owned by EmpE | Driver T = Pte/Total Km x Reimb
Subject to Tax Tax payable from foreign jurisdiction which Inc is
App for exemption from reg where TS mostly ZR less paperwork
Employee Stock Options (Accrues in yr of Exercise)
received | If through 2nd country, depends if tax payable there
Co listed on SGX T = (Last Done EmpE paid) x No. of Sh acq Headline Tax Rate 15% in yr of receipt | Need not be tax suffered Voluntary Registration 1st Sch Para 8 & 9
To claim Input GST | Min. 2 yrs to deregister | incur compliance cost
Others T = (OMV on ex date EmpE paid) x No. of Sh acq
Exemption beneficial to R
Trader Annual TS < $1m | Biz Estab making 3rd cty sale (OOS)
Restrict Sale (OMV date restrict cease EmpE paid)xNo. Sh acq S13(10) Dividends
Div paid by Co R in Foreign Jurisdiction from which Inc is received
Furtherance of Business
Residence of Individual (Apply ALL 3 test in exams)
Tax suffered on Div In C2T, it means DWT
May not be in ordinary course of Biz | E.g. Sale of assets
Qualitative Test (1st)
Corporate Tax on profits out of which Div is paid Underlying Tax Importation & Imports Relief
Normally resides in SG in the PCY of the YA
R if absence = Temp | Reasonable | Not inconsistent with claim
Double Tax Relief
7% GST payable to Customs at pt of importation of gds into SG
Quantitative Test of Physical Presence (2nd)
Dont apply if FSI Tax Exempt or Taxable but not subj to Tax
Regardless of Time of Supply & If GST registered
Physically present 183 days | No need continuous | Part day = 1 day s50 Tax Treaty Relief Bilateral Agreement
Import relief applied at pt of importation Temp Imports | Rerd
Quantitative Test of Employment (3 )
Overrides domestic law to the extent that treaty is fav to taxpayer
Importation of gds temp exported E.g. Exhibition | Imports of GST
Exercises employment 183 days | Dont apply to Non-Exec Director Bilateral | Cannot impose Tax Liability if none exists
suspension scheme (Maj Exporter) | Imports by bona fide traveller
IRAS Administrative Practices (Concession)
Prevents fiscal evasion | Credit Method generally used
Value of Supply
2-Yr R for both yrs if cont period 183 days over 2 consec yrs
s50A Unilateral Tax Credit Relief (UTCR)
Monetary Consi =
VOS
+ GST
3-Yr R for all 3 yrs if continuous period over 3 consec yrs
For SR suffered FSI tax with Non-Treaty country | Credit Method
Normal
107%
=
100%
+
7%
GST absorbed by Trader
100%
=
93.46%
+ 6.54%
Tax Rates
Section 50 Credit Code (Applies to s50 and s50A)
sive

Value
of
Import
(VOI)
=
Carriage
insurance
&
freight
+
custom
duty
Residents Progres , Rebate: 50% capped $1, 000 | NR Flat 20% For SR suffering foreign tax | Gross Amt | Src-by-Src or FTC Pool
GST = 7% x VOI
Donation Non-cash to IPC/non IPC no deduction
Lower of SG Tax (SETR* x gross FSI-deduct) & Foreign tax suffrd
GST Reporting Period S41, R45
Reliefs for Non-Resident Individuals
Prevents Gov from subsidizing Foreign Tax suffered
Generally every qtr Match Fin yr QE 31/3 | 30/4 | 31/7 | 31/10
SG Emp 60 days in PCY S13(6) Exemption for Emply Inc |
SETR* = Tax payable on all Inc before FTC / AI
OR QE 28/2 | 31/5 | 31/8 | 30/11 OR QE 31/3 | 30/6 | 30/9 | 31/12
Dont apply to NR Professional & Entertainer | Only apply to Employ
FETR = Foreign Tax / Gross or Regrossed Foreign Income
Monthly & 6 monthly reporting periods subject to IRAS approval
Inc | Short-term Emp ( does not straddle 3 consec years)
No C/F or C/B | Claim made, not > 2 yrs E.g. YA13 FC YA15
Submit GST Return for every quarter within 1 month of quarter end
60 Days < SG Emp < 183 Days S40B Relief Higher of 15% x FTC Pooling (Election on Annual Basis)
SG Emp Inc or SG Emp Inc R tax rates, claim pers relief
IPT > OPT Refundable within 3 mths of filing return

 IPT < OPT Payable within 1 mth of end of quarter

Time of Supply S11, 12 (7/107 * deposit or amt w gst less
deposit)
Earlier of Date on Invoice/Bill or Payment received
Split Payment = Deposit 107% | Bal = Total GST Previous GST

Value of Supply (VOS) & Value of Import (VOI)

Inclusive of GST: GST=[(x/107) x 7%] Exclusive of GST: GST=[7% x Amount]
If GST is absorbed by trader, Value of Supply = [(100/107) x 100%]
Value of Import = Carriage/Insurance/Freight + Custom Duty

Recoverability of Input Tax

Not added in.

Conditions Trader GST reg | IPT related to Biz input | Input used
in making of TS | input Tax not blocked by Reg 26 & 27
Requires Documentary evidence Suppliers tax invoice | Custom
GST payment Permit
Input Tax not blocked by Reg 26 & 27
Blocked Input Tax (Paid at custom, IPT not recoverable from IRAS)
Sporting & Rec club Fees Entrance + Annual Subscription Fee
Medical & accident insurance premiums | Medical Expenses
(Except: Work Injury Claim, Pre-Employment Screening)
Employees Family benefits E.g. School fees of Expat children
Transactions involving games of chance (Eg. Gambling)
Motor cars, include goods & svc used directly in connection | S/SZplate cars

1)Company both R and NR tax at flat rate of 17%

GST & Income Tax

Input Tax claimed as IPT credit in GST Return?
Yes No Income Tax benefit | ND
No IPT treated as underlying exp | D
Special Scenarios
Blocked IPT IPT = D in Income Tax
S/SZ-plate cars Blocked IPT | IPT = Not D in Income Tax
Not GST reg No IPT | IPT on P&M = Capital hence claim CA

First 300,000 exempt

Up to $10,00 -> 75%
Up to $200,00 ->50%
2)SUTE (Need this??? WHOLE THING HERE)
--3)Foreing indiv <60 days , tax free..
Xx
Xx
X
4) clubs and association

Individiual
Income from various sources: TBPV
Less: wear and tear allowance
LesS: trade loss
Employment
Divid, int, discounts
Pension, charge, annuity
Rent, royalties
Other gains and profits

Less: deductible exp

Statutory income
Less: donations
Assessable income
Less: personal relief
Chargable income
Less: rebate (if applicable)
=Tax payable