Viewpoints

Who is liable for Singapore Property Tax? Property tax is a tax on properties in Singapore. All types of properties including Govt. HDB flats, factories, offices and vacant land are subject to tax. If you or your business owns property, you must pay property tax. What are the property tax rates in Singapore? The amount of property tax you have to pay per year is a percentage of the Annual Value of the property. The Annual Value is the estimated yearly rent the property can fetch if it were rented out. The tax rate for owner-occupied residential property is 4% per year. The tax rate for all other properties is 10%. Tip: If you are using your residential home as an office, you pay 4% property tax if you (a) own the home and (b) live in the home. Are There Any Rebates, Relief’s or Refunds? To help keep taxes […]

A dormant company is one that does not carry on business and has no income for the whole of the financial period under review. Even if the company has incurred such costs as bank charges, secretarial fees, and other expenses in maintaining the office. A dormant company must submit its Income Tax Return (Form C-S/ C) unless it has been granted a waiver to file the Income Tax Return by the Inland Revenue Authority of Singapore (IRAS). 1. Obligation to File Income Tax Return (Form C-S/ C) A dormant company is one that does not carry on business and had no income for the whole of the basis period. For example, if a company did not carry on business and had no income for the whole of the basis period ending in year 2015, it will be regarded as a dormant company for Year of Assessment (YA) 2016. A dormant […]

DIRECTORS must comply with the common law and specifically with the Companies Act of Singapore. As most of the company’s powers are vested in the board of directors, they control its affairs and are thus answerable to the company’s shareholders collectively. Fiduciary Duties Directors have a fiduciary duty to their company. This means that they must be loyal to the company and must act honestly and in good faith when exercising their powers. Where a director has a personal interest that may conflict with his fiduciary duties to the company, he should make disclosure to the company and obtain the approval of the company. Statutory Books Every company shall keep a register of its members and the various statutory books at the company’s registered office or some other appropriate place where notice of the place has been lodged with the Accounting and Corporate Regulatory Authority (ACRA). In addition, minutes of […]

Two of the ways in which a foreign company may carry on business in Singapore are by registering a branch office and by incorporating a limited liability company in Singapore. We set out below a brief comparison of the major differences between a branch office and a subsidiary in Singapore.   Legal identities A branch office is a considered an extension of the parent company and is not considered a separate legal entity. Hence, its liabilities extend to the parent company, meaning the parent company can be sued in Singapore. A local subsidiary is a separate legal entity from the foreign company even if the latter may be its only shareholder and will maintain control over its board of directors. This means that the foreign company does not have to bear the losses and liabilities of the local subsidiary.   The branch office must also submit its own accounts, as […]

After a branch office is duly registered. the Singapore Accounting and Corporate Regulatory Authority (“ACRA”) must be kept informed of certain changes in the affairs of the parent company, the Singapore branch and the local agents. A list of such changes is appended hereunder for your reference. Please notify us of any such change as soon as possible in order that we may lodge the necessary forms with ACRA: General Changes  ACRA must be notified of any change or alteration made to: the charter, statutes, memorandum or articles of the parent company or other instrument lodged with the Registrar; the identities or particulars of the directors of the parent company; the identities or particulars of the local agent or agents (including any change of address, passport numbers, citizenship etc.); the situation, address or designation of situation or address of the registered office of the Singapore Branch or of the days […]

In general, a company’s taxable income is not the same as net income (accounting income). The calculation of taxable income for a company begins with net profit/loss in the company’s accounts and then making various adjustments to arrive at the chargeable income subjected to tax during the accounting period. Adjustments are made because some of the expenses incurred by your company may not be deductible for tax purposes. Similarly, some of the income received by your company may not be taxable or it may be taxed separately as a non-trade source income.   From net income to taxable income A Singapore company is taxed on its income accruing in or derived from Singapore and income received in Singapore from outside Singapore subject to applicable exemptions and tax reliefs. Income includes: gains or profits from any trade or business income from investment e.g. interest and rental royalties, premiums and any other […]

Stamp Duty for Sale of Property I’m referring to the IRAS website on Stamp Duty and you’re supposed to pay this tax if: You have purchased an HDB Flat You have purchased a completed property issued with Temporary Occupation Permit You have purchased a property under construction You have purchased a property by way of a sub-sale You have acquired properties an enbloc purchase   The Formula Quick Calculation Formula: Stamp Duty = Sale Price x 3% – SGD5,400 However, if the price of the property falls below SGD360,000, this would be inaccurate. Remember we also have to round up to the nearest hundred dollars before calculating. Example:  Peter bought a walk up apartment at the price of SGD500,000.00, his stamp duty fees will be [(SGD500,000 x 3%) – $5400] = SGD9,600 The real formula would be, 1% of the first SGD180,000, 2% of the next SGD180,000 and 3% of […]

General Overview Singapore corporate tax rate is one of the lowest in the Asia Pacific Region. With effect from Year of Assessment 2010 (Basic period ending 2009), the Singapore corporate tax rate will be 17% (prior to YA2010, it was 18%). Singapore tax system is territorial in nature. I.e. Income tax is levied on the net income of companies from sources within Singapore and on foreign source income if remitted into Singapore. Non-resident Singapore companies and businesses are taxed on the same basis. When deriving chargeable income, expenses incurred wholly and exclusively for the generation of the income are deductible against the incomes. Generally, an expense will not be deductible if it is: prohibited under the Income Tax Act; capital in nature; or a contingent liability. There is no capital gain tax in Singapore. With effect from 2002, Singapore has implemented a one-tier corporate tax system. Under this system, the […]

The establishment of a branch office or a subsidiary company in Singapore are two common options available for foreign companies wishing to establish a business presence here. A Singapore branch office is considered an extension of the foreign company and is not a separate legal entity of its own. This means that the foreign company is responsible for the liability of its Singapore branch office. Additionally, the foreign company can also be sued in Singapore in the case of any dispute. A branch office is also subject to certain compliance requirements, such as the preparation of financial statements and hiring auditors in Singapore to audit its financial statements. In accordance with the Companies Act, the audited financial statements of both the branch and the foreign company must be filed with ACRA. In the case of a local limited liability company, when the company satisfies certain criteria, it can be exempted […]

Both local and foreign companies (an incorporated subsidiary or registered branch) in Singapore are subject to annual filing requirements from Inland Revenue Authority of Singapore (IRAS) and Accounting and Corporate Regulatory Authority of Singapore (ACRA).   ACRA Annual Filing Requirements Each private limited Singapore company must file an annual return with ACRA signed by a director or secretary within one month of its annual general meeting (AGM). The AGM must be held within 18 months from the date of incorporation; subsequent AGMs must be held every calendar year, with interval between each AGM not exceeding 15 months. The directors must table the company’s financial accounts in compliance with Singapore’s Financial Reporting Standards (FRS) framework. Financial accounts consist of Profit and Loss Account and Balance Sheet.   Annual Return is separate from a company’s financial accounts. It includes key information about the company’s legal status such as information about directors, secretary, […]