Singapore Budget 2015 Overview of Tax Changes (For Businesses)

Among the highlights of tax changes affecting businesses, as announced by Singapore’s Minister of Finance, Tharman Shanmugaratnam on 23 February 2015 are as follows:

1) Corporate Income Tax rebate (YA 2016 and 2017)

A 30% corporate income tax rebate will be provided for YA 2016 and YA 2017 at a reduced cap of $20,000 per company per YA. This is a reduction from the previous cap of $30,000 per company per YA. Therefore, companies will have to pay more taxes.

2) Expiry of Productivity and Innovation Credit (PIC) Bonus

The PIC Bonus will expire in YA 2015. This means that no more dollar-to-dollar claims for qualifying PIC expenditures from YA 2016 onwards. However, companies are still eligible to claim 60% PIC Cash Payout, limited to qualifying expenditures up to $100,000 per YA.

3) Extension of the Wage Credit Scheme (WCS)

The Wage Credit Scheme (WCS) will be extended for another two years. The Government will co-fund 20% instead of 40% of wage increases given to Singaporean employees earning a gross monthly wage of $4,000 and below. In addition, employers will continue to receive co-funding at 20% for wage increases given in 2015 which are sustained in 2016 and 2017. This means a reduction in the amount that businesses can claim for giving salary increments to their employees.

4) Tax deduction for donations

The tax deduction will be increased from 2.5 times to 3 times for qualifying donations made from 1 Jan to 31 Dec 2015 to Institutions of a Public Character (IPC) and other approved recipients. The 2.5 times tax deduction for qualifying donations will be extended for another 3 years from 1 Jan 2016 to 31 Dec 2018. If businesses have extra funds, please do your corporate social responsibility part and can lower your taxes at the same time.

5) Simplifying pre-registration GST claim rules for GST-registered businesses

GST incurred on purchases of goods and services prior to GST registration is referred to as pre-registration GST. To ease compliance, the claiming of pre-registration GST will be simplified to allow a newly GST-registered business to claim pre-registration GST in full on the following goods and services that are acquired within six months before the GST registration date of the business:

a) Goods held by the business at the point of GST registration; and

b) Property rental, utilities, and services, which are not directly attributable to any supply made by the business before GST registration.

Thus, businesses no longer have to apportion the pre-registration GST on the above goods and services even if these goods and services have been used to make supplies straddling GST registration or these goods have been partially consumed before GST registration. This is provided the use of these goods and services after GST registration is for the making of taxable supplies and not exempt supplies. For other purchases of goods and services prior to GST registration, including those acquired more than six months before the GST registration date of the business, existing pre-registration GST claim rules will apply.

This change will take effect for businesses that are GST-registered from 1 Jul 2015. These changes will help to make it clearer as to what pre-registration GST incurred can be claimed. It will also increase compliance levels and reduce mistakes in claiming pre-registration GST by newly GST-registered businesses.

For any assistance related to GST filing services in Singapore, get in touch with us now!


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ACRA Cancels Registration of Filing Agent and Qualified Individual for AML/CFT Breaches

The Accounting and Corporate Regulatory Authority (ACRA) had cancelled the registrations of filing agent (RFA) and qualified individual (RQI) on 18 January 2024. The registrations were cancelled in view of breaches of anti-money laundering and countering the financing of terrorism (AML/CFT) controls under the ACRA (Filing Agents and Qualified Individuals) Regulations 2015 (the “ACRA Regulations”).

Some of the basic AMT/CFT controls that a RFA and RQI are required to exercise are as follows:

(a) perform additional customer due diligence measures when a customer is not physically present during onboarding;

(b) inquiring if there exists any beneficial owner in relation to some of its customers; and

(c) perform risk assessments i

RQIs and RFAs provide corporate secretarial services for business entities, such as helping customers to incorporate companies, file annual returns and fulfil other filing requirements under the Companies Act 1967 or other Acts under ACRA’s purview. RQIs and RFAs are required to perform customer due diligence measures in accordance with the ACRA Regulations, and conduct their business in such a manner as to guard against the facilitation of money laundering and the financing of terrorism. RQIs and RFAs must also satisfy statutory requirements such as being fit and proper persons, to be registered or continue to be registered.

RQIs and RFAs who breach their statutory obligations may be subject to enforcement actions, such as financial penalties of up to $10,000 or $25,000 per breach respectively or have their registrations with ACRA suspended or cancelled.

Therefore, RQIs and RFAs play an important role in helping to detect and combat illicit activities.

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