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6 BADGES OF TRADE (transaction = taxable

profit bears badges of trade)


TAX COMPUTATION
1. Subject matter of the transaction
Net Profit as per P/L
2. Length of period of ownership
Tax adjustments:
3. Frequency of similar transactions
Less: Credit items included in P/L but not4. Whether supplementary work on or in
taxable,
connection with the property realised had
been preformed
e.g. loss on disposal
Less: Credit items included in P/L but5. Circumstances responsible for realisation
exigencies?
taxable as
6. Motive at time of purchase
separate source
7. Others: financing, feasibility studies LT
Add: Income not included in P/L but taxable, Loan, repayment ability?
e.g. FSI remitted
Subsidiary v Branch
Add: Expenses included in P/L but notSubsidiary: usually R unless mgt & control
outside Sg
deductible,
Foreign coy with Branch: usually NR unless
e.g. dep, donations
mgt & control in Sg
Less: Expenses not included in P/L but
deductible
Less: Further deductions (Add back BCP/E: FOREIGN ENTERPRISES DOING BIZ IN
SG Trading IN or WITH
here)
P/E: Minimum level of activity that would
Adjusted Profits
render a foreign enterprise taxable in
Less: Special Deductions, s14Q R&R another country (see treaty)
Asset test fixed place of business
Expenses
maintained by enterprise
Less: Capital Allowances, IBA, BA,
Agency/Relationship test dependent agent
S10(1)(a) income (net)
acting on behalf of enterprise
Add: Non-s10(1)(a) income, e.g. dividends, Activity test supervisory? Purchasing unit?
Existence of business - concept of P/E
interest income
Not P/E: warehousing, mere purchasing
Statutory Income
function, representative office (s2(1))
Less: Unabsorbed business losses b/f
Asset test: Fixed place of biz
Less: Approved donations (250%)
Activity
test:
construction,
Less: Group Relief, Carry back
installation/assembly project >6mth;
Assessable Income or Chargeable Income
Substantial equipment is being used or
b4 Exempt Amount [b]
installed
Less: Exempt Amount (75% of $10,000 + 50% Agency: person acting on behalf in SG, who
Has & habitually exercise authority to
of next $290,000) $152.5k
conclude contract
Chargeable Income
- Maintains stock of goods for delivery
Tax Payable @ 17%
- Habitually secures orders
Less: Foreign Tax Credit, e.g. s50A or DTR
Dependent agent regularly concludes
contracts (PE). Not PE if act in the
Tax Payable/Refund [a]
ordinary
course
of
his
biz
Singapore Effective Tax Rate = [a] [b]
(Independent agent)
Corporate Tax rebate (lower of 30% or
If activities are confined to auxiliary/support
$30,000) YA15 (Lower of 30% Or $20k) servicerep officeNT
YA16/17
If refer orders to company for acceptance or
mere storage/purchase of goods not PE
Net Tax Payable
CHARGING SECTION: S10(1)
(a) gains or profits from Trade, Business,
Profession, Vocation (TBPV)
(b) gains or profits from employment
(d) dividends, interest or discount
(e) pension, charge, annuity
(f) rent, royalties, premiums and other profits
arising from property
(g) gains or profits of an income nature not
falling within (a)-(f)
TAX RESIDENCE OF COMPANIES
s2(1): Control & Management of
business is exercised in Singapore
-place of General Meeting

whose

TAX RESIDENCE OF INDIVIDUALS (s2: two


tests)
1. Qualitative test
Resides in Singapore except for such
temporary absences there from as may be
reasonable and not inconsistent with his claim
to be resident
2. Quantitative test
(a) Physically present 183 days in
preceding calendar year; or
(b) Exercises an employment (except
company director) 183 days in preceding
calendar year
3. Administrative concessions (2 or 3-year tax
rule for non-residents)
4. 50% tax rebate on tax payable (capped at
$1k/individual)
CAPITAL VS REVENUE RECEIPTS
1. Fixed vs Circulating capital
(a) Fixed Capital Assets retained or used
in the business for the purpose of producing
profit
(b) Circulating capital Assets purchased in
ordinary
course
of
business
for
resale/manufacture of a final product to be
sold
2. Tree vs Fruit analogy (asset = business
permanent structure = capital)
TAXABILITY OF RECEIPTS: 5 WWPs
(Capital or Revenue Receipt)
1. Payment for sale of assets of a business are
prima facie capital receipts
2. Payments received for the destruction of
recipients'
profit-making
apparatus
are
receipts of a capital nature*
3. Payments in lieu of trading receipts are of a
revenue character*
4. Payments made in return for the imposition
of substantial restrictions on the activities of a
trader are on capital account
5. Payments of a recurrent nature are more
likely to be treated as revenue receipts
*Note: Cancellation of contracts (WWP 2 and 3)

remuneration. YA08 onwards - 2% if satisfy Industrial building or structure (IBS):


TMIS and PMBS. Restricted to Sporean building or structure must not be used for a
workers, up to statutory contribution amt.
non-qualifying purpose, s18(6) - except
Foreign Exchange Differences: Capital Sentosa hotel, land
- Dwelling, retail shop, showroom, hotel,
nature () Revenue nature ()
IRAS concession. If not, revert to old: FX admin off or ancillary purpose
- Subject to the 10% rule, s18(7)
diff of revenue nature must be realised =
taxable/deductible
Pre-commencement
Expenses:
Not
deductible ()
Concession: Deduction allowed () for
expenses of a revenue nature incurred from
first day of a/cg year - derives its first $ of
trading receipts

Owner can claim Construct IBS Buy new


IBS Buy used (2nd hand) IBS
- Owners own qualifying trade leased out
for use in qualifying trade
- Lessee use IBS for its qualifying trade
- Must have relevant interest at the end
of the basis period concerned

IBA Claimable when the asset is in


use
Person who constructed IBS: 25% IA, 3%
AA
Person who bought IBS (>1 Jan 2006), AA
- $300,000 for every 3-year period (3 year claimable, IA claimable only if previously not
write off on straight line basis)
claimed
- Must not involve structural change where BA/BC, s18(9): Add back notional
BCA approval is needed. - Can be brought allowance in the years not claimed
forward if unutilised. No group relief or carry
back. Prohibited: Designer/Professional fee, Non-Qualifying Cost for IBA
- Cost of land, stamp duty, legal expenses,
antiques, work of fine art
interest expense for construction (claimable
Further deductions: Additional deduction under s14(1)a)
for expenditure already allowed under s14
INTELLECTUAL PROPERTY RIGHTS (IPR)
or allowed as special deduction:
-s14B: Approved Trade Fairs, exhibitions, S19B WDA
Capex on acquiring IPR claimed over 5 years
maintenance overseas trade office
-s14R: Qualifying Training Expenditure (20% per YA),
Net of legal and registration fee. Enhanced
(Under PIC)
S14
(1):
100%
of
Expenditure WDA = 20% x 300% x Exp (PIC Scheme)
incurred
PRODUCTIVITY & INNOVATION CREDIT
S14R: 300% of (expenditure
(PIC)
incurred/relevant cap*, whichever is
300% for PAE (s19A(10A)) and IPR (s19B)
lower)
Base = 100% & Enhanced = 300% or cap
*Relevant Cap is $400k/YA ($1.2m from
(whichever is lower)
YA13-15 & YA16-18)
INTENSIFICATION
ACT
(LIA)
Approved Donations s37: Cash to LAND
institutions
of
a
public
character, Replace IBA from 23/2/10
shares/units, Computers, gifts to approved IA 25%, AA 5% *Asset must be in use
Qualifying period: 1/7/10 to 30/6/15. Apply
museums. No lucky draw!! () 250%
from 23/2/10 onwards
Productivity & Innovation Credit YA10
Qualifying
ind:
pharmaceutical,
to 18
petrochemical, aerospace, semiconductor
PIC+ Scheme: SP/Partnership/Co carrying on
For
new
building/existing
trade whose biz turnover <$100m &
building/renovation/extension
employment size is < 200 employees.
Relevant Cap: Increased from $400k to UNABSORBED CAPITAL ALLOWANCES
$600k. YA13-15/YA16-18: Relevant cap AVAILABLE OPTIONS IN SEQUENCE FOR
s15(1) EXPENSES PROHIBITED
annual = $1.4M/$1.8M
UCA AND UBL, e.g. YA08
a) Private or domestic expenses
1. Loss Transfer under Group Relief Scheme
b) Expense not wholly and exclusively for
CAPITAL ALLOWANCES
[s37C]
purpose of acquiring income
PLANT: Apparatus usedin carrying on his 2. Carry-back to YA 2007 [s37E]
c) Capital withdrawn or sum employed or
businessfixed or movable, live or dead, 3. Carry-forward to YA 09 [s23(1) & 37]
intended for capital... income
keeps in permanent employment in his
d) Capital employed in improvements
(A) LOSS TRANSFER SYSTEM OF GROUP
business
e) Sums recoverable under an insurance or
RELIEF s37C
- Business Use Test (apparatus used for
contract of indemnity
Companies must belong to same group
carrying on the business)
f) Rent or repairs to premises not occupied
(>75%) (NOT in foreign countries)
- Business Premise Test (not part of the
for producing income
1.
Current
year
unabsorbed
capital
place, setting or premises)
g) Singapore or foreign income tax (tax
allowances
- Apparatus kept for permanent employment
expense)
2. Current year unabsorbed business losses
in business, stock in use
j) s12(6) payments (interest and other
including Further Deductions, exception:
- Functional Test
borrowing costs) paid by person outside Sg
unutilised s14Q expenses cannot be
Plant: blinds, carpets, escalator, lifts, MV,
to another person outside Sg unless
transferred
movable ramps, partitions...
accounted under s45 WHT
3. Current year unabsorbed donations
Not Plant: fountains and water features,
k) Car expenses
sanitary fittings, stairs, lights...
Qualifying Group Companies
e) Exceptions taxis, cars for driving
instruction, private hire cars, cars registered s19 Capital Allowances: IA = 20%, AA = - Singapore incorporated companies (cannot
foreign incorporated)
outside Sg and used extensively outside Sg
(Cost-IA) Tax Life
(claim AA, asset has to be - Shareholdings - Ordinary shares only
s14(1) GENERAL DEDUCTION FORMULA AA deferrable
(cannot have fixed dividends)
used at the end of BP*)
(Source by source concept)
- Members of same group - same accounting
Deducted all outgoings and expenses s19A Capital Allowances (on due claim) year-end
wholly and exclusively incurred during s19A dun need *end of BP
Maintain
75%
shareholding
level
that period by that person in the 1 year write-off 100% specific assets,
throughout basis period
production of the income
s19A(2)-(10)
- Elect to transfer loss items s37C(11)
Interest expense s14(1)(a): Any sum - Computers, website, prescribed automated
Ordinary Shareholding Requirement
payable by way of interest upon any money equipment (PAE)
borrowed by that person where the - Power supply generator in event of power - >75% ordinary share capital in one
company is beneficially held, directly or
Comptroller is satisfied that the interest was failure
payable on capital employed in acquiring - New replacement of existing diesel-driven indirectly by the other
- >75% ordinary share capital in each of the
goods vehicles and buses
income
- Assets costing not more than $5,000/item 2 companies is beneficially held, directly or
Repairs and Renewals s14(1)(c): subject to $30,000 maximum
indirectly by a 3rd SIC
Repairs of premises, plant, machinery or 3 years write-off (33 1/3%) end of BP
Transferor coy: must specify order of
fixtures, Renewal, repair or alteration of Qualify for CA: capital improvement to priority to claimant s37c(12) Claimant coy:
implement, utensil or article
cannot specify amount, only decide who first
existing plant/machinery
Initial repairs: Law Shipping case (Cap) : Exchange loss incurred
(B) CARRY-BACK RELIEF (s37E)
Odeon Theatres case (Rev)
: Incidental cost
eg purchase
tax, Maximum relief of $100,000 [s37E(5)]
Improvements: not deductible ()
installation, delivery cost
Order of set-off , s37E(2): UCA, followed by
Original
Item(ND)
Replacement Motor vehicles (except S-plate cars) UBL (no donations)
item(deductible)
s19A 3-year write off from YA09
Carry-back against assessable income of
Bad & Doubtful debts - s14(1)(d): Balancing Adjustment s20
immediate preceding YA. (E.g. YA2015 c/b
Conditions: debt incurred in any TBPV and Balancing Charge = Selling price > TWDV
to YA14)
Balancing
Allowance
=
TWDV
>
Selling
price
on revenue acc. Relate to a debt that had
Must satisfy following tests

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

months > $1m; notified within 30 days


of the beginning of that period
2. Voluntary 1st Sch. Paras 8 & 9
(Beneficial for export company with lotsa
GST suppliers)
TIME OF SUPPLY s11&12: When to
account for output GST
Earliest of the following 3 dates:
- Date of tax invoice
- Date payment is received From 1/1/11
- Goods removed or madeonwards
available or
when services are performed (*)
Exception: 14-day Rule
- Use tax invoice date if the tax invoice is
issued within 14 days of (*)
- Payment received prevail this 14-day rule

Zero-rated supply (0%), s21: look at


subject matter
- Export of goods (freight charges),
international services-s21(3)
-Service by SG firm rendered o/s SG (even if
engaged by a SG firm)
- Input tax is recoverable (unlike exempt
supply)
Standard-rated supply, s16: 7%, incl
sale of capital assets not amt to transfer of
business,
service/goods
provided
by
overseas to SG company.
VALUE OF SUPPLY (VOS)
-Value of supply + GST = Cash consideration
- If absorbed by trader: 93.46% +6.54% =
100%
-Value of supply = OMV consideration (net of
discount, GST excl)
-VOS includes cost, insurance, freight
charges, duties
Out of pocket expenses
If incurred in course of making supplies,
charge GST
If paid on custs behalf to 3rd parties,
expenses are disbursements => do not
charge GST

TYPES OF SUPPLIES (Determined by


Place of Supply)
Out of Scope supply: Sale of biz as
going concern, sales outside sg
Exempt Supply: Supply made in Sg
excluded under s22 and 4th Sch
- Sale and lease of residential properties
- Financial services to staff or related coy
(except brokerage fees-GST)
PLACE OF SUPPLY
-Interest earned from bank
- Input tax not recoverable (exempt output Supply of goods is made in SG if the goods
are physically located in SG at the time of
tax, cannot claim input tax)
removal

Supply of services is made in SG if the


supplier belongs in SG.
CONDITIONS FOR RECOVERING INPUT
TAX - s19, 20
GST-registered person
Used for the purpose of business
Attributable to taxable supplies
Documentary evidence, i.e. tax invoice
Input tax must not be blocked Reg 26 &
27
BLOCKED INPUT TAX - Reg 26 & 27
Club subscription fees (trade association
fees not blocked)
Medical and accident insurance premiums
(unless obligated under Work
Injury
Compensation Act)
Medical expenses (except work-injury
compensation, pre-employment check-ups
and compulsory annual medical check-ups)
Employees family benefits
Motor cars (E/S/Q/SZ plates/private hire
cars not claimable, except for vans,
motorcycles and heavy
vehicles, X/Y/Z plates are claimable)
Gifts of Goods - Deemed Supply, 2nd
Schedule, para 5: GOODS ONLY
Gift of goods being a business asset is
treated as a supply of goods unless

- Gift not >$200 and does not form a series


(>3 times within 3 months) to the same
person
-Private use of supplies
- Entitled to claim input tax credit of the
good given away
- Deemed output tax paid by vendor
GST Return
Submit within 1 mth after quarter ended
If input GST is attributable to the making of
an exempt supply, input GST is not
recoverable
If it is a non-GST registered co., it will not
be able to claim a refund for its input tax.
In other words, the co. will end up bearing
the input GST as an exp.