Singapore Accounting And Tax
Devino streamlines accounting for ACRA compliance.
Singapore’s tax system is not only transparent but also incorporates low tax rates to encourage business growth. Providing a favorable environment for both individuals and enterprises to thrive.
- Simplified taxation
- Favorable policies and Low tax rates
- World class system
As qualified accounting service providers, we assist you comprehensively through the following process:
- Time saving: Our efficient process helps you focus on your core business.
- Cost effective: Streamlining processes to lower your expenses.
- Ensuring compliance: We strictly adhere to regulations, ensuring full compliance for your business.
- Comprehensive support: We provide accounting services along with professional guidance, ensuring smooth business operations.
According to Singapore’s latest accounting standards
When a Singaporean company is formed, the company must follow the rules of the Singapore Companies Act. Compliance involves annual filings with ACRA and IRAS. As per Singapore law, original accounting and tax certificates must be kept for at least 5 years, organized chronologically or by contract occurrence.
- Bank statements, Contracts, Invoices
- Receipt, Payment Voucher
- Logistics Documents, Shipping Waybills, Bills of Lading, etc
- Letter of Credit, Credit Card Receipt
- Payroll Calculation Summary
- CPF Contribution Receipt, CPF Calculation Statement
- Year-end Bonus Calculation Sheet
- Details of Changes in Shareholders’ Equity, such as: Capital Increase, Transfer, Additinal Issuance, etc
- Certificate of Shareholders’ Paid-up Capital Payment
- Others if applicable
- If a company fails to submit its annual financial report on time, ACRA in Singapore may impose fines on the company. In severe cases, legal actions may be taken against the company.
💡Our services include:
- General Ledger Maintenance
- Accounts Payable Ledger Maintenance
- Accounts Receivable Maintenance
- Bank Reconciliation
- Fixed Assets Ledger Maintenance
- Cash Flow or Budgeting
- Financial Statements and Reports
- Management Reporting
- Differences in industries and company characteristics will impact the content and format of financial statements.
The corporate income tax in Singapore is based on a company’s profits, with a rate of 17%
Although most companies aim to comply with their tax obligations, occasional errors may still occur due to lack of diligence or awareness. Errors can sometimes result in penalties for companies, such as receiving subpoenas from tax authorities. Utilizing the expertise of tax professionals, your company can effectively avoid the issues.
The Inland Revenue Authority of Singapore (IRAS) has announced CIT Rebate of 50% of the corporate tax payable will be granted to all taxpaying companies, whether tax resident or not, for YA 2024. Terms and conditions as below: The company must have made CPF contributions for at least one local employee (Singapore Citizen or PR) in 2023, excluding shareholders who are also directors.
Our services include:
- Submit an estimated chargeable income
- Calculations of tax, including income statements and income tax returns
- Liaise with the Income Tax Department regarding tax assessments, objections and correspondence
Tax exemption schemes for new companies
Any eligible newly registered company (as described below) is entitled to enjoy tax exemption in the first three years, as determined by tax authorities. Eligibility requirements:
- Incorporated in Singapore
- Residency tax in Singapore
- The company should have fewer than 20 shareholders, with at least one individual shareholder holding a minimum of 10% of ordinary shares.
| Chargeable Income (SGD) | Effective tax rate |
| First $100,000 | 4.25% |
| ＄100,001 – ＄200,000 | 8.5% |
| ＄200,001 – thereafter | 17% |
Regarding the compliance of corporate income tax filing obligations for companies
- The deadline for filing tax returns is November 30 each year
- Mandatory for all companies to file electronically
- The deadline for filing Estimated Chargeable Income (ECI) is within 3 months of the end of the company’s financial year
- If your company meets certain criteria, it’s not required to submit ECI. Avoid common mistakes such as false claims for non-deductible expenses
- If the annual income for the fiscal year does not exceed 5 million SGD, then ECI is none.
Singapore’s corporate consumption tax is known as the Goods and Services Tax (GST).
Goods and Services Tax is a broad-based tax levied on goods imported into Singapore (collected by Singapore Customs) and on almost all goods and services in Singapore. In other countries, consumption tax is called Value Added Tax (VAT).
💡The current GST in Singapore is 9%.
Register for GST
All companies with an annual taxable income exceeding S$1 million or anticipated to exceed S$1 million must register for the Goods and Services Tax (GST). These companies are required to register for GST within 30 days of reaching this threshold.
- You also have the option to voluntarily register for GST. Approval for voluntary registration will be at the discretion of the Comptroller of GST in Singapore. Once approved, you’ll need to maintain the registration for a minimum of two years.
- You must file your GST return with IRAS within one month of the end of each prescribed accounting period, usually quarterly.
- You should reimburse your output and input tax on your GST return.
- The difference between output tax and input tax is net GST payable to or refunded by IRAS.
- Business records for 5 years, or records of all GST-related transactions, need to be kept. Records include tax invoices, receipts, and credit documents.
GST Billing and Charges
Once you register for GST, you’re required to charge GST at the prevailing tax rate on your supplies. This tax charged and collected is referred to as Output Tax. It needs to be remitted to the IRAS after collection.
GST generated from your business purchases and expenses (including imported goods) is referred to as Input Tax. If your business meets the conditions for claiming Input Tax, you can claim Input Tax on your purchases and expenditures. This mechanism of offsetting Input Tax ensures that taxation occurs only on the value added at each stage of the supply chain.
Our services include:
- GST registration or cancellation.
- Prepare GST calculation forms and file GST returns.
- If a business does not submit GST on time by the prescribed deadline, the penalty for late payment is S$200. Subsequent monthly GST filings will result in an additional penalty of S$200 per month, up to a maximum of S$10,000.
Corporates can appropriately estimate and manage estimated tax payments based on business and revenue situation.
It is the estimated taxable income of the company by the Inland Revenue Authority of Singapore (IRAS). IRAS obliges companies to file ECIs electronically through the MyTax Portal.
From January 2017 onwards, this declaration became mandatory.
Income refers to the primary sources of revenue for the company, excluding items like gains from selling fixed assets. For an investment holding company, the main income sources would typically be investment earnings (such as interest and dividend income).
- If there are no audited financial statements, you can refer to the company’s management accounts to report the amount of revenue.
- If the amount of income reported according to the audited financial statements is different from the amount of income reported on the ECI form and there is no change in your ECI, you do not need to modify the income figure.
Everyone is responsible for paying personal income tax. Personal income tax in Singapore is calculated based on an individual’s income level and the corresponding tax rate. Considering the potential tax savings, government incentives, and complex tax implications, it would be wise to consult with a tax expert. This helps you declare your income more efficiently and maximize the tax savings you are entitled to.
Our services include:
- Prepare personal income tax calculations and submit tax returns.
- Coordinating with the Inland Revenue Department (IRD) for matters related to income tax assessment, objections, and follow-up procedures.
Tax Resident or Non-Tax Resident
Tax residents and non-tax residents are subject to different personal income tax rates in any given tax year (fiscal year or assessment year). You would be considered a tax resident if you meet the following conditions:
- Singapore Citizen
- Singapore Permanent Resident (SPR) if you have applied for permanent residency in Singapore.
- Or if you have resided in Singapore for at least 183 days in the preceding tax year, excluding company directors.
According to Singapore’s tax standards, if you do not meet any of these criteria, you will be considered a non-tax resident.
Personal income tax rate for non-tax residents
- Employment Income: You are required to pay personal income tax on your employment income at a rate of 15% or the resident personal income tax rate, whichever is higher.
- Other Income: Consultancy fees, advisory service fees, and other income. You are required to pay personal income tax to the IRAS at a rate of 20% on the director’s fees and consultancy service fees you receive.
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© 2024 by Devino International Consultancy Pte Ltd. All Rights Reserved.
© 2024 by Devino International Consultancy Pte Ltd. All Rights Reserved.