TAXATION SERVICES

Tax residents For tax resident individuals, Singapore's personal income tax rates are progressive, meaning individuals with higher income are taxed at a higher rate. The current highest personal income tax rate is at 24%. The progressive tax rates are available on IRAS site Non tax residents Regarding employment income of a non-resident individual is taxed at the flat rate of 15% or the progressive resident tax rates, whichever is the higher tax amount. Regarding director's fee, consultation fee and all other income, the tax rate for non-resident individuals is currently at 24%. It applies to all income including rental income from properties, pension and director's fees, except employment income and certain income taxable at reduced withholding rates.

A person is a tax resident for a particular Year of Assessment in Singapore if this person is: • Singapore Citizen or Singapore Permanent Resident (SPR) who normally resides in Singapore except for temporary absences; or • a foreigner who has stayed/worked in Singapore: 1. for at least 183 days in the previous calendar year; or 2. continuously for 3 consecutive years; or • a foreigner who has worked in Singapore for a continuous period straddling 2 calendar years and your total period of stay* is at least 183 days. This applies to foreign employees who entered Singapore but excludes directors of a company, public entertainers or professionals. * including the physical presence immediately before and after your employment. Foreigners issued with a work pass that is valid for at least 1 year will also be treated as a tax resident. However, the tax residency status will be reviewed at the point of tax clearance when the employment is ended based on the tax residency rules. If the stay in Singapore is less than 183 days, the foreigner will be regarded as a non-resident.

Generally, an individual is required to submit the Income Tax Return if in the preceding calendar year if: 1. the individual's total income is more than $22,000; or 2. the individual has self-employment income with a net profit more than $6,000; or 3. the individual is a non-resident who derived income from Singapore. Income Tax Return must be filed by all individuals who have received a letter, form or an SMS from IRAS informing them to do so, regardless of how much they earned in the previous year or whether their employer is participating in the Auto-Inclusion Scheme (AIS) for Employment Income.

The individual Income Tax Return filing due date is 18 April. If additional filing time is needed an extension of up to 14 days may be granted.

Failure to file the individual Income Tax Return by the due date is an offence. IRAS may take the following recovery actions for failing to file by the due date: • Issue an estimated Notice of Assessment. The estimated tax must be paid within 1 month. • Offer to compound the offence. • Issue a Notice to Attend Court/Summons.

The corporate tax rate in Singapore is capped at flat 17%. Some attractive tax incentives like partial tax exemptions can reduce the tax amount on the first S$ 200,000 of chargeable income. These tax incentives are higher on the first 3 years for new eligible start-up companies.

There are two main deadlines for the corporate tax filing: • Estimated Chargeable Income (ECI) filing is due 3 months after the financial year end (there is no need to file the ECI for a company if it is nil and the company's annual revenue is $5 million or below). • Final Corporate Income Tax Return must be filed by the deadline of 30 November of the year following the financial year end.

Not all expenses are tax deductible. Generally, tax deductions may be claimed on expenses wholly and exclusively incurred in the production of income. However, some expenses are never tax deductible, as for example: • depreciation expenses (the company may claim instead capital allowances) • motor vehicle expenses (S-plated, Q-plated and RU-plated cars) • personal expenses • private hire car etc.

YES, on-time filing is required even if the company did not carry on business or has incurred a loss. Failure to file the Income Tax Return by the deadline is an offence under the Income Tax Act 1947 and may result in penalties of up to $5,000. Directors remain responsible for accurate and timely filing of the company’s Income Tax Return, even if a tax agent has been engaged. If the company engaged a tax agent, it is the company's resposability to coordinate with them early to meet filing requirements.

Failure to file the Corporate Income Tax Returns together with financial statements and tax computation by the due date is an offence. IRAS may take the following recovery actions for failing to file by the due date: • Issue an estimated Notice of Assessment. The company must pay the estimated tax within 1 month. • Offer to compound the offence. • Issue a Section 65B(3) notice to the company director to submit the required information in the Corporate Income Tax Returns to IRAS. • Issue a Notice to Attend Court/ Summons to the company or persons responsible for running of the company (including the directors). A dormant company is still required to e-File the Form for Dormant Company unless it has been granted a waiver of Corporate Income Tax Return submission.