Académique Documents
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Culture Documents
whose
S24
election.
Sale
is
deemed
to
be
the
been included in the income of trader in
- Same Business test, s37E(11) Unutilised
year it was derived. Debt became bad in transfer price, aka TWDV.
CA (UCA) only
basis year (irrecoverable). Biz must beBuyer can claim 19A CA/19 CA on TWDV
Shareholders
continuity
test
for
Balancing charge is restricted to amt of carried out in basis year.
companies, s37E(12) UCA/UBL (Same
Recovery is T in year recovery was made. allowances previously granted
Shareholders must hold >50% issued
For debts of company taken over by
INDUSTRIAL BUILDING ALLOWANCES shares at both relevant dates)
purchasing coy becomes bad: ND and NT
(IBA)
Specific provisions for doubtful trade debts
Relevant dates for Unutilised CA CARRY Definition: manufacture, processing,
are deductible if comptroller is satisfied that
BACK to 2007:
storage, prescribed purpose
it is unrecoverable. General arbitrary
- First day of YA in which CA arose incurred
Other qualifying IBS: staff canteens, R&R
(made by taking a % of total outstanding
(1 Jan 2010)
rooms,
childcare
facilities,
washroom,
trading debt and debiting this amount to
- Last day of YA in which CA is utilised (31
carparks, roads, fences (structure)
revenue account.
Dec 2007)
Initial Allowances (IA): 25%, s16(1) - when
Employers Contributions to Pension & qualifying activity commence
Relevant dates for BUSINESS LOSS for
Provident Funds s14(1)(e)
Annual Allowances (AA): 3%, s16(4) CARRY-BACK:
Restrictions
of
Expenses:
Medical when building is in use (full QC) - (as at - First day of loss/calendar year in which loss
expenses s14(5) - 1% of total employee end of BP)
was incurred (1 Jan 2009)
Special
deductions:
Deduction
of
expenditure that would not be allowable
under general deduction formula: (S14Q
Deduction on R&R)
- (Service) Fixed place of operations in for each YA upon the income of any person received in
SG from outside SG.
foreign jurisdiction (PE)
- If no fixed place of operation in FJ, then
1) Quote sec10 (25) to prove received in SG; if not give
income is Sg-source
conclusion
s13(9) CONDITIONS
2) Examine whether exemption, DTR, UTR or
1. FSI subject to tax in country from which deduction is applicable (an FI will qualify for UTR if
the income is received
both exemption & DTR is not applicable)
2. Headline tax rate of FJ at least 15% in 3) Conclusion: report gross up amount of __. Quantity
year in which income is received
each relief if possible
3. Comptroller is satisfied that tax
exemption is beneficial for taxpayer
TAXATION OF INDIVIDUALS
[Concession: condition satisfied if tax Source of Employment Income
exemption is a direct consequence of FJ - Where the employment is exercised, s12(4)
(C) CARRY FORWARD (UCA - s23/BL being granted tax incentive for carrying out - Gains or profits from any employment
s37)
substantive biz in FJ]
exercised in Sg shall be deemed to be
Same Business Test: Taxpayer carries on
Fixed Place of Operation: Refers to a derived from Sg whether the income is
same TBP UCA only
place of mgt, an office, or a certain amount received in Sg
Shareholders Continuity Test: >50% of the
of floor space at the disposal of person Allowance (T)/Reimbursement (NT)
issued shares... UCA/UBL
carrying on a TBP of rendering services thru Personal benefit taxable Business related
not taxable, unless excess
Relevant dates UCA for CARRYwhich employees perform income activities
Club
membership
(personal
benefit
FORWARD to 2011:
- Must have features of permanence
allowance
unless
its
4
- Last day of YA in which CA arose (31 Dec
- Be at the disposal of the person on an derived?);
subsistence,
travelling,
conveyance/
2010)
ongoing basis
- First day of YA in which CA would
- Is used regularly by person to carry on entertainment on purposes other than those
prohibited under S15
otherwise be claimed (1 Jan 2011)
his TBP of rendering services
PERQUISITES
(2) TAX CREDIT METHOD
Relevant dates BUSINESS LOSS for
1) ACCOMODATION/HOUSING BENEFIT,
Non Treaty: s50A Unilateral tax relief:
CARRY-FORWARD to 2011:
Applicable to following income of Sg - Taxable benefit = AV Rent contributed by
- Last day of loss year in which losses was
resident from non-treaty countries (for employee
incurred (31 Dec 2009)
dividends, royalities*, overseas branch - F&F in residential ppty: Taxable benefit = X
- First day of YA in which loss would be
profits or income from any professional, % x AV
deductible (1 Jan 2011)
(40% - partially furnished & 50% - fully
consultancy...)
(D) DONATIONS (s37)
- *Not borne directly/indirectly by person furnished)
Only carry forward. Cannot carry-back for
2) Interest Subsidy Interest-free or
resident in Sg or P/E in Sg; or
donations!!
- *Not deductible against any Sg-source subsidised loan
Set-off in following order after deducting
- Scheme available to all employees on
income
business losses, s37(7):
Note: claim s50A credit where s13(8) tax similar terms - Not Taxable - Scheme
- Donations of prior YAs (FIFO basis),
available ONLY to specific persons - Benefit
exemption does not apply
s37(9)
Rule: Lower of Singapore and foeign Taxable
- Current year donations
tax payable on the FSI (foreign tax on 3) - Employees income tax liability
- Transfer of current years donationsTaxation of Non-Residents
FSI
versus
(SETR%*Re-gross/Gross borne by employer - Taxable
under Grp Relief Scheme, s37(8)
Withholding tax when person makes S12(6)/
- Insurance premiums (NOT taxable if ER is
6 years to claim deductions, i.e. carry (7) payments to person not known to be R in FSI))
beneficiary)
(2a) S50C-foreign tax credit pooling:
forward for 5 YAs, s37(8) - Must satisfy SG. Or hard to collect.
Condition: Subject to foreign tax; Headline - Car benefit = 3/7 x [(Cost RV)/10] +
substantial shareholders test
NWTR17% (if PE in SG): show-how;
tax in source country 15%; Subject to tax $x/km x pte km
Relevant
dates
UNABSORBED management fees, technical assistance,
in SGP;
eligible for FTC under tax (x = 0.45 employee pay & 0.55 employer
service
fees
DONATIONS for CARRY-FORWARD:
treaty/UCTR Lower of: aggr of actual foreign pay)
May file tax return to claim
- ESO: Taxable benefit = [(Last done price on
- Last day of year in which donation was
tax and aggr of SGP tax
expenses
listing date(SGX listed)/MV on date of
made
(3) TAX SPARING RELIEF: Tax credit given exercise(Others) Price paid by employee] x
DA(direct
assessment)
(17%)
if
NR
carrying
- First day of YA in which loss would be
under treaty. Deem tax paid in
foreign No of shares acquired under option)
on
TBP
in
SG
or
PE
applies
to
IRAS
for
waiver
deductible (1 Jan 2011)
country
on WHT
- Subsidy/allowance for licensed childcare
(E)
SUBSTANTIAL
CHANGE
IN Conditions for final WHT: income not derived
(4) DEDUCTION METHOD
Tax exempt
SHAREHOLDERS AND SHAREHOLDINGS
by NR from a TBPV carried on in SG and not
Taxable on net foreign income received
-Home leave passage: Under IRAS
- UCA cannot be c/f s23(4)
effectively connected with PE in SG of NR
No need to gross-up for foreign tax
concession, the taxable benefit of leave
- Losses and donations will be disregarded
Final 10%: royalty; know-how payments
Indirect deduction given for foreign tax passages is computed as 20% of their value
s37(12)
paid
12(7)(a) & (b)
if the passages are to the employees home
- Once disregarded, not allowed in any
Used when a resident person elects not to country. The concession is limited to only
Final 15%: interest 12(6); rent of movable
subsequent YA - s37(13)
be
granted
tax
credit
method,
s50(8)
or
1passage each for the employee and his
property 12(d);
(Or treaty rate for those final, whichever is when no other method of relief (ie. tax wife and 2passages for each
exemption, DTR, UTR) is available
child annually. Any extra trips is fully
lower)
OTHER INCOME
taxable.
DIVIDENDS
Withholding tax: When to pay IRAS?
Conditions for S12(6) interest and S12(7)
By 15th of the second month following the Underlying Tax: Tax that is payable on the OTHER PAYMENTS
payments
Inducement payments: Compensation for
month in which the income is paid or profits out of which the dividend is paid
i) Borne directly or indirectly by person R in
Dividend Withholding Tax: Tax that is permanent loss of status/ Forgo a personal
deemed paid
SG or PE in SG except in respect of biz
withheld on the dividend paid, and remitted advantage - Capital Nature (not taxable)
(E.g. 10 March 2015 -> 15 May 2015)
carried on outside SG or PE outside SG or
Payment for future service (Taxable)
to the tax authorities
immovable property outside SG OR
1) This amount ______ will be a knowhow/ showhow or
DTR cover UT, regross dividend in SI. DTR Restrictive covenants (Capital)
ii) Deductible against income accruing
royalty payment
dont
cover
UT,
gross
dividend
in/derived from SG
TERMINATION PAYMENTS
(Royalty payment the 20% SG company annual gross
MOF 1977 Press Statement -not
- Compensation for loss of employment:
receipts is paid for the use of, or the right to use Foreign
deemed SSI, no WHT
Retrenchment pay relating to cessation of
companys name and registered trademark in marketing
an
employment (a source of income) will be
and selling the bottled oils and essences. Thus, it is a
capital receipt even if contractual or amt
royalty payment)
12(6)(a) interest: where the item in 12(6)2) Deemed to be derived from SG as it falls under the
calculated on length of past service
(a) is performed outside SG, hereby not
- Payment in lieu of notice - Taxable
1st/2nd of 12(7)(b) or 12(7)(a), which covers _____. This
treated as covered by the provision of sec payment is borne directly by __, a company resident in SG
- Gratuity for past services Taxable
12(6)(a)
3) This payment will be taxable in SG under sec10 (1) and
NON-RESIDENT
EMPLOYEES
S12(7)(A) royalty: type payment that are since __ is a NR, this income will be subjected to
Up to 60 days: employment income
for licensing of movable property, where withholding tax of __%. GIVE REASON (whether can file
exempted from tax, s13(6)
there is no transfer of ownership.
tax return to claim expenses)
>60 days: employment income taxable
12(7)(b)1st limb: know how payments.
4) DISCUSS deductibility for the other party (if no deduct
(S40B)
12(7)(b)2nd limb: Show-how, payment
then consider cap allowances)
- NR: Greater of 15% on EI or tax payable
technical assistance
5) Conclusion: __ has to withhold __% of __. The notice
on EI on resident basis
Management or assistance fee S12(7)(c) of deduction of tax has to be given to the comptroller. The
- Resident: tax on resident basis for the EI
amt withheld is to be paid to IRAS on the 15th day of the
payment to persons outside SG not
DIVIDENDS
2nd month following the date of payment to __.
associated with the payer in SG are
Distribution
by
a
company
to
its GOODS AND SERVICES TAX
outside the scope of 12(7)(c)
shareholders in money or money's worth
DOOUBLE TAXATION RELIEF
Conditions: 1.
representing a share of its profits, otherwise
Transactions/assistance/service performed received in Singapore - s10(25):
than by a return of capital
(a) remitted to, transmitted or brought into - Accrues on the date it is declared payable
outside SG; 2. arms length transactions;
Singapore
3. not with intent to siphon off SSI
- Location of the source is where the
(b) applied in or towards satisfaction of any company is resident
debt incurred
- A Sg resident company pays a Singapore
in respect of a trade or business carried on dividend
in Singapore;
Types of Corporate Tax Systems
(c) applied to purchase any movable
One-tier system (exempt, not taxable)
property which is brought into sg
- Corporate tax paid by company is a final
GST Registration Cost-Benefit
tax
Analysis
Claiming Relief under Tax Treaties, s49: - Can claim tax credit for Underlying Tax paid
1. Compulsory s9 and 1st Sch Para 1: If
by company
Claimant - Singapore resident
total value of taxable supplies exceeds or is
Foreign tax paid/payable in foreign - Expenses incurred to earn exempt dividend
expected to exceed $1million
income = not deductible
country
Retrospective Test (applies on 31/3, 30/6,
Foreign income remitted or deemed to be Imputation System (dividend taxable)
30/9, 31/12)
remitted into Singapore
- Corporate tax paid by company is not the
o Total value of supplies (exclude sales
final tax (no underlying tax)
of capital assets) > $1m for the
METHODS OF RELIEF FROM DOUBLE - Claim tax credit for tax paid by company
current and last 3 quarters; notified
TAXATION
(i.e. tax deducted at source)
within 30 days of the end of the
(1 S13(8) TAX EXEMPTION
- Expenses incurred in earning dividend
quarterregister, Unless < $1m for next
- Foreign sourced dividend income (paid by income = Deductible
4 quarters
non-Sg resident company)
- Foreign branch profits (only trade/business Classical system: Tax on two levels: Prospective Test (applies on any date)
o
Total value of supplies (exclude sales
Company & Shareholder
income of branch)
of capital assets) expected in next 12
- Foreign-sourced service income (in the According to s10(1), the 2nd limb states that income tax
course of TBP)
shall be payable at a rate or rates specified hereinafter
- 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 years 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