Taxation of Resident Individual
Relief – capped at 80k per YA
Earned income relief (handicapped)
Below 55
55 to 59
60 and above
Qualifying Child Relief (handicapped)
Legal child + > 16 y/o OR studying FT, annual
income ≤ 4k
Working Mother Child Relief (F only)
Child satisfies QCR/HCR conditions
CAP: QCR/HCR + WMCR ≤ 50k
Spouse Relief (handicapped)
Living/supported + annual income ≤ 4k
Parent Relief (handicapped)
Living in same household
Not living in same household (incurred
≥ 2k to support)
Living in SG + ≥ 55 y/o + ann. income ≤ 4k
Grandparent caregiver relief (F only)
Living in SG + children ≤ 12 y/o + no work
Handicapped sibling relief
Same household + incurred ≥ 2k
NS Relief (KAH)
No NS activities
NS activities
Wife/Parent
Life Insurance Relief
Total yearly CPF contribution < 5k, paid for OWN
life insurance premiums, insurer has
office/branch in SG
Quantum
1,000 (4,000)
6,000 (10,000)
8,000 (12,000
4,000 (7,500)
1st – 15%, 2nd –
20%, 3rd and abv. –
25%of mother’s
earned income
2,000 (5,500)
9,000 (14,000)
5,500 (10,000)
3,000
5,500
1,500 (3,500)
3,000 (5,000)
750
Lower of:
1. diff between 5k
and CPF
contribution
2. up to 7% of sum
assured or
premium paid
Course Fee Relief
5,500 max
Related to current or new job
(on self paid amt)
For. Maid Levy Relief (concessionary) (F only)
2 x $265 x 12
(relief is twice of levy paid for every mth)
(2 x $60 x 12)
CPF Relief – OW Ceiling = $6k x 12mths = $72k, AW Ceiling = $102k less
total OW subject to CPF
Employee CPF Rate: ≤ 55y/o – 20%, 56 – 60 y/o – 13%
61 to 65 y/o – 7.5%, ≥ 66 y/o – 5%
SRS Relief -- Capped at: SC/SPR: $15,300 Foreigners: $35,700
Annual income = ALL forms of income – trade, employment, rental,
interest, dividends, pensions (and even FSI)
Earned Income = refers to employment, pension, TBPV [i.e. not passive]
Accoms
Taxability on Perquisites
Generally: rent/AV less employee’s payment, F&F
considered part of rent. If otherwise, tax @
40%/50% of AV for partially/fully furnished
Air
passages
Awards/
Gifts
Loans
Childcare
Per diem
allowance
Car
Benefits
PM =
Private
Mileage
$0.45 –
employer
pay petrol
$0.55 –
employee
pay petrol
Stock
Options
Home leave passage or cash payment in lieu of
home leave passage – ALL TAXED IN FULL
Value ≥ $200 on EACH award or gift – not taxable,
otherwise in full
Direct from employer – not taxable
From bank & employer pay interest – taxable
Childcare – not taxable, student care – taxable
Amt in excess of IRAS acceptable rates - taxable
New car: 3/7 x [(car cost - residual value)/10] +
($0.45 per km x PM)
2nd hand car: less than 10 yrs à 3/7 x [(car cost residue value)/remaining period of car at date of
purchase] + ($0.45 per km x PM)
More than 10 yrs à 3/7 x (car cost/remaining
period of renewed COE) + ($0.45 per km x PM)
Renewed COE car: 3/7 x (residual value + COE
renewal cost)/renewed COE period + ($0.45 per
km x private mileage)
Leased car: (3/7 x rental cost incurred by the
employer) + ($0.10 km x private mileage) à if ER
pay for petrol, take away the $0.10km x PM
portion if EE pay for petrol
No vesting à taxable in year of grant
w/o selling restriction à taxable upon exercise/
vesting | with moratorium à taxable in year
which moratorium is lifted
Calculation: generally market price – price paid
(exercise price). For market price à ESOP take
exercise date, ESOW with vesting take vesting
date, no vesting take grant date, with moratorium
take date of moratorium lifting
Taxation of Foreign Source Income
If all else fails (i.e. if no tax exemption available) à consider
credit relief under s. 50 Credit Code
S.50: how much credit is available? à lower of:
(1) Singapore tax payable on FSI (net of allowable expenses)
(2) actual foreign tax suffered
SG tax payable on FSI = (Gross FSI – allowable expenses) x SETR
SETR = Tax payable on all income taxable in SG (before FTC) / AI
FTC cannot be carried forward/back à complete forfeiture if not
in tax payable position for that Y/A à hence tax payer should plan
timing of remittance
Income
Badges of trade concept: (1) Subject matter of realization (2)
Length of period of ownership (3) Frequency or number of similar
transactions (4) Supplementary work [to increase saleability] (5)
Circumstances responsible for realisation (6) Motive
Deductions
s.14 (1): Expenses wholly and exclusively incurred during that
period in the production of income à allowed for deduction
s. 15 prohibited deductions: capex, depreciation, private/domestic
exp, not wholly & exclusively incurred for income production,
withdrawal of capital, asset improvements, SG/foreign tax paid
Interest: need to apportion if there’s both income + non-income
generating assets à (non-income producing assets / total assets –
cash) x total interest expense
Medical expenses: higher of 1%/2% of total employee
remuneration or actual medical expenses incurred
FRS109 Tax Treatment
1. All gains and losses (incl. forex differences) in respect of financial
assets on revenue account recognised in P&L will be taxable/
deductible.
2. Impairment losses – only credit-impaired (FRS39: specific debts)
are deductible. Subsequent reversals are taxable. Expected credit
losses NOT deductible.
Capital Allowances
S.19: “long form” à IA = 20% (non-deferrable), AA = (80% x cost) /
tax working life
S.19A(1): “3-yr w/o” à AA = 1/3 of cost
S.19A(2): “1-yr w/o” à AA = 100% (computers & automation
equipment only)
S.19A(10A): “1-yr w/o for low value assets” à AA = 100%, cost
per asset ≥ $5k, total low value asset claim capped @ 30k per YA
Tax Assets
Order of setoff: CA, Trade losses, approved donations (FIFO basis
within each category
Unabsorbed CA à c/f indefinitely subject to business continuity
test + shareholding test
Unabsorbed trade loss à c/f indefinitely subject to shareholding
test ONLY
Unabsorbed donations à c/f up to 5 YAs, subject to shareholding
test ONLY
Carryback à up to 1 YA on current year unabsorbed CA and trade
losses (donations CANNOT c/b) Quantum: lower of actual amt OR
amt of AI in preceding year (capped @ 100k in total c/b relief)
Biz Continuity Test: carrying on SAME trade in which CA arose in
the basis period relating to the current YA
Shareholdings Test: no substantial change in shareholders & their
shareholdings at relevant dates
Relevant Dates for carry forward relief
CA
31 Dec of YA which CA
1 Jan of YA which
arose
allowances to be setoff
TL/
31 Dec of calendar year
1 Jan of YA which loss/
Donations which loss was incurred/ donation is to be
donation was made
setoff
Relevant Dates for carry back
CA
1 Jan of YA which CA
31 Dec of YA which
arose
allowances to be setoff
TL/
1 Jan of calendar year
31 Dec of YA which
Donations which loss was incurred
loss is to be setoff
Group Relief
Conditions: (1) Both claimant & transferor SG incorporated co.s (2)
Both C&T same accounting yr end (3) both C&T make an election
for group relief (4) ‘members of the same group’ à both C&T
maintain a shareholding level of ≥ 75% (either directly or indirectly
held) on the last day of the basis period for the Y/A of the claim.
SG incorporated co.s implications: (1) if there’s foreignincorporated entities in the ownership chain à shareholdings by
foreign co is not considered for shareholdings assessment
(2) any direct/indirect shareholdings by a non-company (even if in
SG, eg individual/trade association) à disregarded
2nd
level test: holders of ordinary shares must demonstrate that
they are beneficially entitled, directly or indirectly, to ≥ 75% of
residual profits AND residual assets upon winding up
C&T same accounting y/e: other cos in the group chain can have
diff y/e, only C&T MUST have same y/e
Items eligible for group relief transfer: CURRENT YEAR unutilised
CA/ trade losses/ unutilised donations
Special Deductions (given in absence)
14A
IP registration – 200% for 1st 100k per YA, 100% for
amts in excess – for official & professional fees
(NOT for renewal à renewal of IP is deductible
expense, not special deduction)
14D
R&D – in house: 100% base + 150% only on staff
cost (excl. director fees) and consumables
Outsourced: 100% base + 150% only on 60% of fee
paid OR actual staff cost (excl. dir. fees) and
consumables if amt is more than 60% of fee paid
Conducted wholly overseas: 100% for trade related
R&D, otherwise no deduction for non-trade R&D
14DA
14H
Building mod. for disabled employees – cap @ 100k
across ALL years of operations
14Q
Reno & refurbishment – qualifying exp. capped @
300k for relevant 3-yr period, claim 1/3 per yr à
designer/architect/professional fees + antique/ fine
art ALL not claimable
14U
Expenses before first dollar of income – first dollar
of income from TBPV per basis period in review,
revenue expenses incurred in the accounting year
immediately preceding the deemed date of
commencement is allowed a deduction or further
deductions.
14W
Licensing IP rights
Further Deductions (given in addition)
14B
Approved trade fair, exhibition, mission or maintain
overseas trade office – 100% deduction, for
airfare/accomodations cap @ 2 employees
14L
Relocation/ recruitment of overseas talent
14K
Overseas investment – 100% capped @ 100k per
YA, traveling expenses capped @ max 2 employees
14KA
Salary for employees posted overseas
14R
Training expenditure
Taxation of Non-Residents (Withholding Tax)
Tax Computation for Companies
Net profit per accounts
Adjusted Profits
Add back:
Add: Balancing Charge
Non-allowable expenses
Less: CA (FIFO basis)
Unabsorbed, current yr,
balancing allowances
Expenses of a capital nature
Add: Non s10(1)(a) income
less allowable expenses
Depreciation
= Statutory Income
Less:
Less: Trade losses (FIFO)
Unabsorbed, current yr
Non-business source income
Less: Donations
Receipts of a capital nature
= Assessable Income
Exempt income
Less: Group Relief / Carry back
relief
FSI not remitted/exempted
Less: SUTE / PTE
SUTE: 75% on 1st 100k, 50%
on next 100k (max: $125k)
PTE: 75% on 1st 10k, 50% on
next 190k (max: $102,500)
Special/further deductions
= Chargeable Income
= Adjusted Profit (s.10(1)(a))
Tax @ 17%
Less: Foreign Tax Credit/ CIT
Tax Rebate
= Final Tax Payable
Tax Computation for Resident Individuals
Income from various sources
Trade
Less: CA / trade losses
Employment Income
Other sources of passive income
= Statutory Income
Less: Approved Donations
= Assessable Income
Less: Personal reliefs (capped @ 80k per YA)
= Chargeable Income
Tax on 1st $XXX,XXX
Tax on next $XXX,XXX
Gross tax payable
Less: Rebates
Personal Tax Rebate (none announced for YA 2020)
Parenthood Tax Rebate (5k, 10k for 1st and 2nd child
respectively, 20k per child for 3rd and subsequent child)
Net tax payable