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What Is Making Singapore a Tax Haven?

The low taxes and other incentives of Singapore for foreign investors qualify it as a tax haven. For residents, personal income is taxed at a progressive proportion with a top marginal rate of 22%. The highest tax bracket, as of the 2019 tax year, has been defined as incomes above $320,000 US dollars. Capital gains are not generally taxed.

This island city-state has become a global hub for international investment and business as a result of its tax policy and its position, which makes it a gateway for companies looking to expand into emerging Asian economies.

You can get the help and support of Morrison Management for doing a proper tax audit of your company so that you may not end up paying any penalty for any non-compliance.

The corporate rates of Singapore

Singapore has a flat 17% corporate income tax rate. Other benefits are given by Singapore’s Inland Revenue Authority, however, may reduce the effective corporate tax rate.

For the first three years of business, start-up enterprises in Singapore can benefit from a tax exemption of up to $125,000 on the first $200,000 in revenue.

Companies must be formed in Singapore and have a maximum of 20 shareholders to qualify for the start-up tax exemption. An individual who owns a minimum of 10% of the company’s stock must be a shareholder.

How to make changes after filing or receiving the tax bill

Please re-file via myTax Portal if you need to make modifications to your original Income Tax Return. If you disagree with your tax bill, you have 30 days from the date of your tax bill to make an amendment via myTax Portal’s “Object to Assessment” digital tool.

You may only re-file once if you have already filed your online Income Tax Return by using myTax Portal. Re-filing has to be done within 7 days of your last submission or before 18th Apr, whichever is earlier.

Steps for re-filing your Income Tax Return:

  • First, log in to the myTax portal.
  • Select as ‘Individuals’ and then ‘File Income Tax Return’.
  • Then just follow all the instructions displayed on the screen for re-filing.

When you are going to re-file, you need to include all the details about your income, expenses, and donations, and other relief claims, wherever applicable. After you have successfully re-filed, your new submission is going to override the previous submission.

Details to provide

If you are sending your adjustments to IRAS through email, make sure to explain why you are making the changes and include the following information (where applicable):

1. Income

Your income from employment

  • Nature and type of income
  • Amount of income
  • Supporting documents for all.

2. Lump-sum payments

If your income is a lump sum payment, which you must have received from any of your ex-employer, then provide the following:

  • Circumstances and nature leading to the payment
  • Amount of your payment
  • Basis of arriving that amount
  • Whether or if the payments were made in compliance with any contract terms or agreements. If so, please send a copy of the relevant contract or agreement.
  • A copy of any correspondence concerning the payment (e.g. termination agreement).

3. Profession trade, business, or vocation income

  • Your nature of business
  • Name of business
  • Registration number of your business
  • Accounting period

Your account statement is in the following format:

  1. Revenue
  2. Allowable business expense
  3. Gross profit/loss
  4. Adjusted profit or loss = c minus b

4. Other income

  • Type and nature of your income
  • Amount of income

Please use the rental calculator for submitting details of the rental income and also rental expenses.

5. Expenses 

  • Your nature of expenses
  • Purpose of incurring your expenses
  • Your basis of arriving at your amount
  • Dates of the expenses that were incurred

Please utilise the employment expenditures schedule to submit your claims for employment expenses.

More on your expenses

  • Business expenses
  • Employment expenses

Please use the Rental Calculator to input details of your rental income and expenses.

6. Reliefs/rebates that are obtainable by all taxpayers

  • CPF or provident fund relief meant for employees
  • Course fees relief
  • Handicapped brother or sister relief
  • Parent or handicapped parent relief
  • Life Insurance Relief

Oversight in Singapore

Due diligence is required of banks and financial institutions in the city-state to assist prevent money laundering and other international criminal activity.

Financial organisations are not required to grant access to personal data about individuals under Singapore legislation because records are private. However, when foreign authorities request it, Singapore makes exceptions to banking confidentiality agreements in circumstances where accounts were used to hide illegal conduct.

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