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Buying a Commercial Property in Singapore: Personal Name or Company?

For many business owners, buying their own office, shop or industrial unit is a major milestone. It ends the cycle of rent increases and, over time, builds an asset. But one question comes up early and is often decided too quickly: should you buy the property in your personal name, or through your company?

The answer affects your income tax, your GST position and how you finance the purchase, both now and many years down the road. Here is what we walk our clients through before they sign.

Option 1: Buying in Your Personal Name

Rental income and deemed expenses. If you rent the property out (including to your own company), the rental income is added to your personal income and taxed at personal rates of 0% to 24%. The good news is that you can claim deemed rental expenses of 15% of the gross rent, plus the actual mortgage interest, without having to keep receipts for those other expenses. It is simple and, for many owners, generous.

No GST to deal with, but no GST to claim. As an individual who is not GST-registered, you do not charge GST on the rent. However, if you buy from a GST-registered seller, such as a developer, the 9% GST on the purchase price is a cost you cannot recover.

Selling later. Singapore has no capital gains tax, so a gain on a genuine long-term investment is generally not taxed. There are no GST complications when you sell.

Option 2: Buying Through Your Company

Corporate tax rates and actual expenses. Rental income or business use is taxed at the corporate rate of 17%, reduced further by the partial tax exemption. The company can deduct its actual expenses, such as loan interest, property tax, maintenance and insurance.

GST can be claimed upfront. If your company is GST-registered and uses the property for its taxable business, it can generally claim back the 9% GST paid on the purchase. On a $1.5 million unit, that is $135,000 back in the company’s pocket, which is a real cash-flow advantage at the start.

The Catch: GST When You Deregister

This is the part many buyers overlook. A common scenario: years later, you wind down or sell the operating business, but keep the property. The company becomes an investment holding company earning passive rental income. Because that rent is usually well below the $1 million GST registration threshold, the company often deregisters from GST to avoid the ongoing GST filings.

At that point, the company must account for GST on the market value of the business assets it still holds, including the property. Because the GST is based on the property’s value at deregistration, not what you paid, a property that has gone up in value means a larger GST bill than the GST you originally claimed.

Example: your company buys a unit for $1.5 million and claims $135,000 of GST. Ten years later, the business has wound down and the company simply rents the unit out. It deregisters from GST when the unit is worth $2.2 million, and must now pay GST of about $198,000 (9% of $2.2 million), in cash, even though nothing has been sold.

Do Not Forget: Singapore Property Tends to Appreciate

Historically, Singapore property prices have tended to rise over the long term. That is good news for your net worth, but it also means the “GST holiday” you get by claiming GST upfront can turn into a bigger cash outflow later if the company ever deregisters. When you compare the two options, look at the whole life of the property, not just the day you buy it.

Financing Works Differently

  • Personal name: the loan is assessed against your personal income, and the Total Debt Servicing Ratio (TDSR) limit of 55% applies to property loans to individuals. A large commercial loan may reduce how much you can borrow for a home later.
  • Company: TDSR does not apply to a company. The bank looks at the company’s financial statements and cash flow instead. Banks commonly ask directors to give a personal guarantee, and younger companies may be offered a lower loan amount or less attractive terms.

Our advice: speak to your bank about both options before committing, and remember that a personal guarantee means the loan can still become your personal liability.

Questions to Ask Before You Decide

  • Will the property be used by your own business, or rented to third parties?
  • Is your company GST-registered, and is it likely to remain registered for as long as it owns the property?
  • How long do you plan to hold the property, and how might you eventually exit, through a sale or by passing it on?
  • What is your personal income tax bracket compared with the company’s effective tax rate?
  • How much can you borrow under each option, and are you comfortable giving a personal guarantee?

There is no one-size-fits-all answer. The right choice depends on your business, your cash flow and your long-term plans.

How We Can Help You

We help business owners compare the tax, GST and cash-flow impact of buying in their personal name or through a company, before they commit. Contact us to arrange a discussion before you sign the Option to Purchase.

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10 Legal Ways to Reduce Tax in Singapore: A Practical Guide for Start-ups and Business Owners

The tax system rewards people who understand how it works. Singapore already has one of the most business-friendly tax regimes in the region, yet many start-ups and business owners still pay more tax than they need to, simply because nobody told them what they could claim.

Here are 10 legitimate ways to reduce your tax in Singapore, written with founders and growing businesses in mind.

1. Start-ups: Make Your First Three Years Count

If you have just incorporated, this is the single biggest tax advantage you will get, so plan around it.

For their first three Years of Assessment (YAs), qualifying new companies enjoy the Start-up Tax Exemption: 75% of the first $100,000 of chargeable income and 50% of the next $100,000 are tax-exempt. Most locally incorporated start-ups owned by individuals qualify, although investment holding and property development companies do not. After the first three years, the Partial Tax Exemption still applies to every company (75% of the first $10,000 and 50% of the next $190,000).

On top of that, companies receive a 50% Corporate Income Tax Rebate for YA 2026, capped at $40,000. If you employed at least one local employee in 2025, you also receive a minimum cash grant of $2,000 as part of this rebate.

What this looks like in practice: a new company with $100,000 of chargeable income pays tax on only $25,000. At 17%, that is $4,250, and the 50% rebate brings it down to about $2,125, an effective rate of roughly 2%.

Our advice: the early years are when your tax bill is lowest, so it is a good time to invest in the business, keep clean records from day one, and make sure your company is set up to qualify.

2. Do Not Be Afraid to Get Professional Help

Many entrepreneurs try to do everything themselves to save money. But professional fees are generally tax-deductible, including accounting, audit, tax filing, corporate secretarial services and legal fees on day-to-day business matters such as contracts and debt recovery.

That means the real cost of good advice is lower than it looks, and the benefits often outweigh it: avoiding late-filing penalties, claiming reliefs you did not know about, getting your structure right early, and freeing your time to grow the business.

The same goes for other day-to-day running costs such as rent, staff salaries and CPF, software subscriptions and marketing. Keep the invoices, as IRAS may ask for them.

3. Upgrade Yourself: Let the Company Pay for Your Courses

As a founder, the most valuable asset in your business is often you. Learning new skills, whether in digital marketing, finance, AI tools or your own industry, pays off for years, and the tax system supports it.

When the company pays for job-related training and courses for its staff, including working directors, the course and exam fees are tax-deductible for the company. For the employee, company-sponsored training is generally not taxable and does not attract CPF, as long as it forms part of the company’s training and is open to all staff to apply.

This matters even more now: the Course Fees Relief for individuals ended from YA 2026, so paying for a course out of your own pocket no longer gives you any personal tax relief.

Our advice: plan your learning budget through the company, keep the course invoices, and make sure the training is relevant to your work. Avoid bundling a holiday into an overseas course, as the holiday portion is taxable.

4. Travelling to Grow Your Business? Pay Yourself a Per Diem

This is one of the most commonly overlooked items for start-ups. When you or your team travel overseas to meet clients, attend trade fairs or explore new markets, the company can pay a per diem allowance to cover meals, local transport and incidental costs.

  • Per diem paid within IRAS’s acceptable rates for the country visited is not taxable to the employee, and that includes working directors.
  • For the company, it is a deductible business expense.
  • Only the portion above IRAS’s rates is taxable as income.

Our advice: set a simple travel policy, check IRAS’s published daily rate for each country before the trip, and record the travel dates and business purpose.

5. Working from Home? Claim Your Home Office Costs

Many start-ups begin life at the dining table. If you run your business from home as a sole proprietorship or partnership, you can claim the business share of your home expenses, such as electricity, internet and phone bills.

The claim should be worked out on a reasonable basis, for example the space you use for work and the hours you spend working, so keep a simple record of how you arrived at the figure. If your business is run through a company, talk to us about the right way to set this up.

6. Buying a Laptop for Work? Write It Off in Full

Small items you buy for the business, such as a laptop, phone, printer or office furniture, do not have to be depreciated slowly over many years.

  • Items costing $5,000 or less each can be written off in full in the year you buy them, up to a total of $30,000 per YA.
  • Computers and prescribed automation equipment can be written off 100% in one year regardless of cost.
  • Other equipment can generally be written off over three years.

Our advice: if you were planning to upgrade equipment anyway, buying before your financial year-end brings the tax saving forward.

7. Renovating Your Office? You Can Claim It, Including Designer Fees

Fitting out a new office or shop is a big cost for a growing business, and the good news is that much of it is tax-deductible.

  • Qualifying renovation and refurbishment costs can be claimed up to $300,000 for every three-year period (the current period is YA 2025 to YA 2027).
  • From YA 2025, designer and professional fees, such as interior designer and consultant fees, also qualify.
  • You can choose to claim the deduction over three years, or all in one year.

Note that structural works requiring approval from the building authorities do not qualify.

8. Expanding Overseas? Claim Double

Under the Double Tax Deduction for Internationalisation, qualifying market-expansion costs such as overseas business development trips, investment study trips and trade fairs can be deducted at 200%. Up to $150,000 of qualifying expenses per YA can be claimed without prior approval, rising to $400,000 from YA 2027, and the scheme runs until 31 December 2030.

Our advice: pair this with point 4. A well-documented overseas business trip can both reduce your company’s tax and provide tax-free per diem for your team.

9. Giving Back? Your Donation Is Worth 2.5 Times

Donations to Institutions of a Public Character (IPCs) qualify for a 250% tax deduction, now extended to donations made up to 31 December 2029. A $10,000 donation reduces your taxable income by $25,000, so giving to causes you care about also lowers your tax.

10. Plan How You Pay Yourself

As a founder, how you take money out of the company matters.

  • Salary or director’s fees are deductible for the company but taxed in your hands at personal rates of up to 24%.
  • One-tier dividends come from profits already taxed in the company, and are tax-free to you as a shareholder.

The right mix depends on your company’s profits and your other income, and it is worth reviewing each year. You can also reduce your personal tax by contributing to the Supplementary Retirement Scheme (up to $15,300 a year for Singapore Citizens and PRs, or $35,700 for foreigners) and by making CPF cash top-ups (relief of up to $8,000 for yourself and $8,000 for family members). Total personal reliefs are capped at $80,000 per YA.

Tax Planning, Not Tax Evasion

Everything above is about using the reliefs Singapore’s tax laws already provide. Arrangements set up mainly to avoid tax without genuine business substance can be challenged by IRAS, and under-declaring income or overclaiming expenses can lead to heavy penalties. Good tax planning starts with accurate records and good advice.

How We Can Help You

Whether you have just started your business or are ready to expand, our team can review your tax position, help you claim what you are entitled to, and set up your company and your own pay in the most tax-efficient way. Contact us to arrange a discussion.

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Navigating IRAS Audits: Key Focus Areas & Penalties

The Inland Revenue Authority of Singapore (IRAS) has significantly stepped up its risk-based compliance audits. Finance teams and business leaders must ensure their accounting treatments align strictly with tax rules before filing.

Here is a quick look at the top three areas IRAS is scrutinising, and what happens if you are not compliant.

1. Transfer Pricing (TP) and Non-Compliance Penalties

IRAS actively audits related-party transactions to ensure compliance with the arm’s length principle.

  • Mandatory TPD: Businesses with gross revenue exceeding S$10 million (or that were required to prepare Transfer Pricing Documentation (TPD) in the prior year) must complete contemporaneous TPD before the tax filing due date.
  • Exemptions: Specified transactions falling below threshold limits (e.g. S$15 million for related-party loans, and S$2 million for service fees and royalties from YA 2026) may be exempt from detailed TPD.
  • Penalties and surcharges:
    • Failure to prepare, retain (for 5 years), or submit TPD within 30 days of request carries a fine of up to S$10,000 per offence under Section 34F.
    • IRAS also imposes a strict, non-deductible 5% surcharge on any upward transfer pricing adjustments made during an audit.

2. Unpaid Accruals

Under Singapore tax law, expenses are only deductible if they are genuinely incurred, with a definitive legal liability to pay.

IRAS is flagging long-outstanding balances, such as accrued director fees, management charges or bonuses, that sit on the balance sheet for multiple Years of Assessment without cash settlement. If an accrual is deemed contingent or lacks genuine payment intent, IRAS will disallow the tax deduction and reassess prior tax years.

3. Capital Accounts and Non-Income-Generating Assets

Balances in capital and intercompany accounts are under close review, particularly interest-free or low-interest loans extended to directors, shareholders or related companies.

  • Loans to directors: Interest savings on advances provided to directors in their employee capacity are treated as taxable benefits-in-kind (BIK) and must be reported in Form IR8A using IRAS benchmark interest rates.
  • Corporate interest adjustments: If a company incurs bank interest expenses while advancing interest-free funds to related entities or directors, IRAS requires an interest adjustment, disallowing a proportionate share (or all) of the company’s bank interest tax deductions.

Worried About Your Tax Risk? We Can Help

Navigating IRAS audit requirements requires a proactive review before the tax submission deadline.

If you are uncertain whether your company meets the transfer pricing threshold, have long-standing accruals on your books, or carry interest-free intercompany balances, reach out to our tax specialist team today. We can help review your positions, prepare compliant TPD, and safeguard your company against costly penalties.

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FRS 109 and FRS 107 Amendments: Classification and Measurement of Financial Instruments (Effective 2026)

Amendments to the financial instruments standards take effect for financial years beginning on or after 1 January 2026, so they apply to many companies’ FY2026 financial statements. Issued by the Accounting Standards Committee (ASC) in October 2024 as Amendments to the Classification and Measurement of Financial Instruments, they amend FRS 109 and FRS 107 (and SFRS(I) 9 and SFRS(I) 7 for listed entities), mirroring the IASB’s changes to IFRS 9 and IFRS 7.

1. When Is a Payment Derecognised?

The amendments clarify that financial assets and liabilities are derecognised on the settlement date, that is, when the cash is actually received or paid.

There is an optional exception for payments made through an electronic payment system. A company may derecognise a trade payable before the cash leaves its account if all of these conditions are met:

  1. it has no practical ability to withdraw, stop or cancel the payment instruction;
  2. it has no practical ability to access the cash to be used for settlement; and
  3. the settlement risk is insignificant.

If chosen, the policy must be applied to all payments made through the same payment system.

Example

A company instructs its bank on 31 December 2026 to pay a supplier S$50,000. The funds leave its account on 2 January 2027.

  • Default rule: both the payable and the cash remain on the 31 December 2026 balance sheet.
  • With the electronic payment election (if all three conditions are met): both the payable and the cash are removed on 31 December 2026.

Year-end cut-off for payments therefore needs careful review.

2. ESG-Linked and Other Contingent Features

Many loans now carry interest rates that change if the borrower meets sustainability (ESG) targets. The amendments clarify how to assess whether such loans pass the “solely payments of principal and interest” test, so that qualifying loans can continue to be measured at amortised cost rather than fair value. The amendments also clarify the treatment of non-recourse loans and contractually linked instruments.

3. New Disclosures

  • For equity investments designated at fair value through other comprehensive income: fair value gains or losses split between investments sold during the year and those still held.
  • For financial instruments with contingent features (such as ESG-linked terms): a description of the contingent event, the possible range of changes to cash flows, and the carrying amounts affected.

Transition

The amendments apply retrospectively, but comparative figures do not need to be restated. Any cumulative effect is adjusted against opening balances at the date of initial application.

What You Should Do Now

  • Review how payments made around the year-end are recorded, and decide whether to adopt the electronic payment election for each payment system.
  • Review the terms of any sustainability-linked or other loans with contingent interest features.
  • Update accounting policies and disclosures in your FY2026 financial statements.

How We Can Help You

We can review your payment processes and loan agreements, assess the impact of the amendments, and update your FY2026 financial statements. Contact us to arrange a discussion.

References

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FRS 119: Reduced Disclosures for Subsidiaries and Small Entities from 2027

Many Singapore companies prepare full financial statements with extensive disclosures that their readers rarely need. A new standard, FRS 119, allows eligible companies to keep full FRS accounting but provide significantly fewer disclosures, for financial years beginning on or after 1 January 2027.

Background

  • The Accounting Standards Committee (ASC) issued FRS 119 and SFRS(I) 19 Subsidiaries without Public Accountability: Disclosures in October 2024, based on IFRS 19.
  • In August 2025, the ASC amended FRS 119 to extend the same relief to small entities, renaming it Subsidiaries and Small Entities without Public Accountability: Disclosures.
  • Applying the standard is optional. Recognition, measurement and presentation still follow full FRS; only the disclosures are reduced.

Who Can Apply FRS 119?

1. Subsidiaries without public accountability whose parent (local or foreign) publishes consolidated financial statements available for public use that comply with FRS, SFRS(I) or IFRS.

2. Small entities without public accountability that report under full FRS and:

  • are not a public company under the Companies Act 1967;
  • are not a registered charity; and
  • meet at least two of these three size criteria:
    • total annual revenue of not more than S$10 million;
    • total assets of not more than S$10 million;
    • not more than 50 employees.

A company generally needs to meet the criteria for the two preceding consecutive financial years before it can apply FRS 119, so FY2025 and FY2026 figures matter for a December 2027 year-end.

What Changes in Practice

  • Shorter financial statements, with simplified disclosures on areas such as financial instruments, leases and fair value.
  • Lower preparation time and cost, and a more focused review by auditors.
  • Companies currently using the SFRS for Small Entities may consider moving to full FRS with FRS 119 disclosures, gaining full FRS accounting without the full disclosure burden.

Example: A Singapore subsidiary of an overseas group whose parent publishes IFRS consolidated accounts can drop many detailed risk and lease disclosures from its own statutory accounts, while still providing the information the parent needs for group reporting.

What You Should Do Now

  • Check whether your company qualifies, using your FY2025 and FY2026 figures.
  • Decide whether to adopt FRS 119 from 2027 (earlier application is permitted).
  • For subsidiaries, confirm what disclosures your parent still needs in the group reporting package.

How We Can Help You

We can assess your eligibility, advise on whether FRS 119 or the SFRS for Small Entities suits your company better, and prepare your financial statements under the new requirements. Contact us to arrange a discussion.

References

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SFRS for Small Entities (Third Edition): Key Changes from 2027

The Singapore Financial Reporting Standard for Small Entities (SFRS for Small Entities) is a simplified accounting framework used by many private companies. In August 2025, the Accounting Standards Committee (ASC) issued its third edition, aligned with the third edition of the international IFRS for SMEs Accounting Standard. It applies to financial years beginning on or after 1 January 2027.

Who Uses the SFRS for Small Entities?

Private companies without public accountability that meet at least two of three size criteria: total annual revenue of not more than S$10 million, total assets of not more than S$10 million, and not more than 50 employees. Many owner-managed and family companies in Singapore fall into this group.

Key Changes

  • Revenue: a revised revenue section based on a simplified version of the five-step model in FRS 115. Companies will need to identify separate performance obligations in a contract and recognise revenue when (or as) each is satisfied.
  • Fair value measurement: a new section on how to measure fair value and what to disclose, consistent with FRS 113.
  • Financial instruments: the two previous sections are combined into a single section aligned with the classification principles of FRS 109. The option to apply the older recognition and measurement rules is removed. The expected credit loss model is not introduced; instead, more disclosure on overdue receivables (an ageing analysis) is required.
  • Consolidation and business combinations: updated definition of control, in line with FRS 110, and revised requirements for business combinations and goodwill.
  • Leases: no change. Small entities continue to account for operating leases off balance sheet, unlike FRS 116.

Example: Revenue from Bundled Contracts

A company sells a machine together with 12 months of maintenance for a single price. Under the new revenue section, the price is split between the machine and the maintenance service. Revenue for the machine is recognised on delivery, while revenue for maintenance is recognised over the 12 months.

Transition

The changes generally apply retrospectively, with specific transition reliefs, including for the new revenue and fair value sections. Companies with a December year-end should start collecting comparative information for FY2026 so they are ready for FY2027.

Should You Stay on the SFRS for Small Entities?

From 2027, small companies also have a new option: apply full FRS with the reduced disclosures of FRS 119. This may suit companies that prefer full FRS accounting (for example, for leases or impairment) but want shorter disclosures. The right choice depends on your stakeholders, banking relationships and group reporting needs.

How We Can Help You

We can review your contracts and balances for the impact of the new edition, help you decide between the SFRS for Small Entities and full FRS, and prepare your financial statements. Contact us to arrange a discussion.

References

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Foreign Manpower Policy Changes 2023–2027: What Employers Need to Know

Over the past few years, the Ministry of Manpower (MOM) has steadily raised the bar for hiring foreign employees, while giving employers more flexibility in some areas. This article brings together the key changes to the Employment Pass (EP), S Pass and Work Permit from 2023 onwards, including those already announced for 2027 and 2028.

Employment Pass: Minimum Qualifying Salary

Effective (new applications / renewals)GeneralFinancial services
1 Sep 2022 / 1 Sep 2023$5,000 (up to $10,500 at age 45+)$5,500 (up to $11,500 at age 45+)
1 Jan 2025 / 1 Jan 2026$5,600 (up to $10,700 at age 45+)$6,200 (up to $11,800 at age 45+)
1 Jan 2027 / 1 Jan 2028$6,000 (up to $11,500 at age 45+)$6,600 (up to $12,700 at age 45+)

The qualifying salary rises progressively with the candidate’s age, from age 23 up to age 45.

COMPASS Points Framework

Since 1 September 2023 for new applications, and 1 September 2024 for renewals, EP candidates must pass the Complementarity Assessment Framework (COMPASS) in addition to meeting the qualifying salary. A candidate needs at least 40 points, scored on:

  • Salary compared with local professionals in the same sector and age group;
  • Qualifications;
  • Diversity of nationalities in the company’s professional workforce;
  • Support for local employment, compared with industry peers;
  • Bonus points for jobs on the Shortage Occupation List and for firms supporting strategic economic priorities.

Firms with fewer than 25 professional employees receive default points for the diversity and local-employment criteria. Candidates earning a fixed monthly salary of $22,500 or more are exempt from COMPASS.

Fair Consideration Framework

Before applying for an EP or S Pass, employers must generally advertise the job on MyCareersFuture for at least 14 consecutive days and consider all candidates fairly. Exemptions include companies with fewer than 10 employees and jobs paying a fixed monthly salary of $22,500 or more (raised from $20,000 on 1 September 2023).

S Pass: Qualifying Salary and Levy

Effective (new applications / renewals)GeneralFinancial services
1 Sep 2023 / 1 Sep 2024$3,150 (up to $4,650 at age 45+)$3,650 (up to $5,650 at age 45+)
1 Sep 2025 / 1 Sep 2026$3,300 (up to $4,800 at age 45+)$3,800 (up to $5,650 at age 45+)
1 Jan 2027 / 1 Jan 2028$3,600 (up to $5,100 at age 45+)$4,000

S Pass levy: the basic (Tier 1) levy rose from $450 to $550 a month on 1 September 2023, and to $650 on 1 September 2025. A single rate of $650 a month now applies to all S Pass holders.

S Pass quota: 10% of the total workforce in the Services sector and 15% in other sectors.

Work Permit Changes

  • Construction and Process sectors (from 1 January 2024): the Man-Year Entitlement framework was phased out, the foreign worker quota was tightened from 1:7 to 1:5 (83.3% dependency ratio ceiling), and new levy rates were introduced.
  • Non-Traditional Sources (NTS) Occupation List (from 1 September 2023): employers in Services and Manufacturing may hire workers from non-traditional source countries for selected occupations, subject to conditions. The list has since been expanded, for example to include cooks, manufacturing operators and heavy vehicle drivers from 1 September 2025.
  • From 1 July 2025: the maximum period of employment for Work Permit holders was removed, and the maximum employment age was raised from 60 to 63. New applicants must be below 61.
  • Marine Shipyard sector (from 1 January 2026): quota reduced from 77.8% to 75%, with higher levies.
  • From 2028: the two lower levy tiers in the Services and Manufacturing sectors will be combined, and levies for basic-skilled workers in the Marine Shipyard and Process sectors will rise.

Local Qualifying Salary

Only local employees earning at least the Local Qualifying Salary (LQS) count in full towards a company’s foreign worker quota:

  • $1,400 before 1 July 2024
  • $1,600 from 1 July 2024
  • $1,800 from 1 July 2026

Local employees earning at least half of the LQS count as half a worker.

What Employers Should Do

  • Review the salaries of current EP and S Pass holders ahead of their renewal dates, as the higher thresholds apply at renewal.
  • Run a COMPASS self-assessment on MOM’s website before making job offers.
  • Check that local employees are paid at least the LQS, so that they count fully towards your quota.
  • Factor the higher S Pass levy and planned Work Permit levy changes into your manpower budget.

How We Can Help You

Our team can help you review your manpower costs, payroll and CPF records, and plan for the upcoming changes. Contact us to arrange a discussion.

References

Information is correct as at 26 October 2026. Please refer to MOM for the latest requirements.

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Case Study: How a Doctor Became Liable for a $600,000 Loan as a Guarantor

A recent Singapore High Court decision is a clear reminder for business owners, directors and key employees: a personal guarantee is a personal debt in waiting.

What Happened

A doctor at an aesthetics clinic was promoted to medical director. About a month later, he signed a deed of guarantee for a $600,000 loan the clinic took from a finance company. The clinic later stopped making repayments, and the lender called on the guarantee. The clinic’s owner has since been charged, with two others, over allegedly fraudulent loan applications to financial institutions.

The doctor argued that he had not understood he was taking on personal liability, that his boss had assured him he would not have to pay, and that the lender had acted improperly by backdating a form. The court rejected all three arguments and held him liable for the debt.

Three Lessons for Business Owners and Directors

1. Read before you sign. “I didn’t read it” is not a defence.
Once you sign, you are generally bound by the document’s terms. The words “Deed of Guarantee” were printed at the top of the document, and he signed next to the word “Guarantor”. The court found it hard to accept that he did not know what he was signing. Being busy or rushed on the day did not help him.

2. Promises from someone who isn’t a party to the agreement won’t release you.
If a business partner or employer tells you “don’t worry, you won’t have to pay”, that promise does not bind the lender. You may be able to sue the person who misled you, but you will still owe the lender.

3. Small irregularities by the lender won’t cancel the contract.
The court treated the backdated form as an administrative shortcut, not the kind of serious dishonesty that would make the agreement unenforceable.

Before You Sign a Guarantee: A Practical Checklist

  • Could I repay this full amount from my own money if the borrower fails to?
  • Do I understand whether the guarantee is limited or unlimited, and how long it lasts?
  • Have I read every page and asked the lender to explain anything unclear?
  • Have I received independent legal advice?
  • Is there a written agreement with the business on how I would be released or repaid if the guarantee is called?

If the honest answer to the first question is “no”, think carefully before signing. A guarantee should be signed only by someone prepared to treat the loan as their own debt.

How We Can Help You

We help companies review their financing arrangements, director obligations and the related corporate secretarial records, so that directors know what they are committing to before they sign. Contact us to arrange a discussion.

References

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Clearing the Air: Understanding Employment Expense Claims and Avoiding Common Tax Misconceptions

Following recent advisories and compliance reviews by the Inland Revenue Authority of Singapore (IRAS)—as reported by The Straits Times, which flagged over 3,000 taxpayers for making false, incorrect, or unsupported employment expense claims—we want to take a moment to address some prevalent myths circulating online and through misleading text messages.

As an accounting firm dedicated to helping our clients stay compliant and financially secure, we want to clarify what can and cannot be claimed as an employment expense, and why shortcuts or “rules of thumb” shared on social media can land you in serious trouble with the taxman.

Common Misconception: "Can I claim a percentage (e.g., XX%) of my entertainment, meals, or lifestyle expenses?"

The Short Answer: No.

One of the most persistent myths is the belief that employees can claim a flat percentage or blanket estimate of personal expenses—such as dining out, entertainment, client meals, or even general phone and internet bills—under employment deductions.

Under Singapore tax rules, employment expenses must meet strict criteria to be deductible. They must be:

  1. Wholly and exclusively incurred in the production of your employment income.

  2. Incurred for the purpose of carrying out your official duties.

  3. Not reimbursed by your employer.

  4. Not capital or private in nature.

What is NOT Allowable (The Pitfalls to Avoid):

  • Entertainment and Client Meals: Expenses incurred for social purposes, building goodwill, meeting potential clients, or meals shared with colleagues/clients are strictly private/non-allowable in nature. You cannot claim a portion of a dinner or entertainment bill just because work topics were discussed.

  • Personal Meals & Overtime Food: Meals eaten during regular working hours or while working overtime are personal expenses and cannot be claimed.

  • Private Transport & Car Expenses: Public transport for commuting between home and the workplace, as well as private car expenses (e.g., cars with “S” plates) used for work travel, are non-deductible.

  • Estimates & Broad Percentages: IRAS does not accept claims based on arbitrary estimates or broad percentages without proper records.

What Can You Actually Claim?

While strict, IRAS does permit certain genuine out-of-pocket expenses that are not reimbursed by your employer. Examples include:

  • Official Business Travel: Public transport costs (bus, MRT, taxi) incurred strictly when traveling from your office to a client’s location, or airfare/accommodation for overseas business trips.

  • Working From Home (WFH) Incremental Costs: Incremental electricity or telecommunication charges directly attributable to working from home (e.g., the differential increase in utility bills caused by WFH, backed by comparative bills). Note that pre-existing Wi-Fi subscriptions set up prior to WFH generally cannot be claimed.

The Risks of Non-Compliance

IRAS utilizes advanced data analytics and ongoing compliance checks to identify errant claims. Relying on unverified advice, templates, or misleading chat messages can lead to severe consequences:

  • Recovery of tax undercharged plus penalties of up to 3 times the tax undercharged.

  • Legal prosecution, which may carry fines of up to $10,000, imprisonment of up to three years, or both.

How We Can Help

Tax regulations can be complex, and interpreting what qualifies as an allowable deduction requires careful evaluation of your specific employment contract and expense logs. If you have mistakenly submitted incorrect claims or are unsure about what can be legally deducted, it is crucial to rectify them proactively via the Amend Tax Bill digital service on the myTax Portal.

If your business or employees require professional guidance on individual tax compliance, expense policies, or corporate tax advisory, reach out to our team today. Let us help you navigate your tax obligations with complete confidence and peace of mind.

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GST Compliance Check: Have You Paid Your Suppliers Within 12 Months?

As a GST-registered business in Singapore, you are generally allowed to claim input tax based on valid tax invoices or import permits—even before settling the payment with your supplier.

However, under Inland Revenue Authority of Singapore (IRAS) regulations, you are required to pay your supplier within 12 months from the payment due date.

If any amount remains unpaid past this 12-month threshold, you must repay the previously claimed input tax back to the Comptroller of GST.

1. What happens if you make a partial payment within 12 months?

If you have settled a portion of the invoice but the remaining balance is still outstanding after 12 months, you must repay the input tax corresponding to the unpaid portion.

This repayment is calculated using the tax fraction (currently 9/109 at the 9% GST rate):

Repayment Amount = Unpaid GST-Inclusive Amount × 9/109

Example 1: Partial Settlement

  • Invoice total (GST-inclusive): $140

  • Partial payment made: $50

  • Unpaid balance after 12 months: $90

Calculation:

$90 × 9/109 = $7.43

Action Required: You must repay $7.43 of input tax back to the Comptroller of GST in your relevant GST return.

2. Can you reclaim the input tax if you pay your supplier later?

Yes. If you pay your supplier after the 12-month deadline, you are permitted to reclaim the repaid input tax, provided the payment is made within 5 years from the end of the accounting period in which the input tax was originally claimed.

Example 2: Delayed Full Settlement

  1. Original Claim: You claimed input tax in your GST return for the accounting period ending 30 June 2024.

  2. Repayment: Because the invoice was not paid within 12 months of the due date, you repaid the input tax to the Comptroller.

  3. Subsequent Payment: You paid the supplier in full on 1 June 2026.

Outcome: Since 1 June 2026 is within 5 years of 30 June 2024, you can safely reclaim the input tax in your GST return for the accounting period ending 30 June 2026.

Key Takeaways for Business Owners

  • Monitor Aging Payables: Regularly review your Accounts Payable aging report to flag invoices approaching the 12-month mark.

  • Maintain Accurate Records: Track when input tax was repaid to ensure you do not miss the 5-year window to reclaim it once settled.

  • Adjust GST Returns Promptly: Ensure input tax repayments or re-claims are correctly reported in the appropriate accounting periods to avoid non-compliance penalties.

Need Assistance with GST Compliance?

Navigating GST regulations and maintaining accurate tax records can be complex. Contact our team today to ensure your financial reporting remains compliant and optimized.