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FAQ – GST change 2023

The amount relating to the option money paid before 1 Jan 2023 is subject to the GST rate of 7%.

The remaining payment will be subject to the GST rate of 8% as the property is only made available on/ after 1 Jan 2023.

If you receive full payment for the banquet before 1 Jan 2023, you should only charge 7% GST to your customer even if the banquet is to be held on/ after 1 Jan 2023.

If you only receive a deposit before 1 Jan 2023 and will receive the balance on/ after 1 Jan 2023, the deposit is subject to 7% GST while the remaining payment is subject to 8% GST.

You should also make clear to your customer that the portion of the banquet price paid before 1 Jan 2023 is inclusive of 7% GST while the balance to be paid on/ after 1 Jan 2023 is inclusive of 8% GST.

The letter of claim is not a bill for payment (i.e. invoice) for GST purposes.

On the understanding that you would only issue the invoice to the developer upon the certification of the work done in 2023 and collect payment from the developer thereafter, the time of supply would be on/ after 1 Jan 2023. Hence, the supply of your construction services would be subject to 8% GST.

However, you can choose to charge GST at 7% as you have completed the construction works before 1 Jan 2023.

As you would only issue the invoice and collect the retention sum from the developer in Nov 2023, the time of supply would be on/ after 1 Jan 2023. Hence, the retention sum would be subject to 8% GST.

However, you can choose to charge GST at 7% on the retention sum as you have completed the construction works before 1 Jan 2023.

You are not allowed to reflect GST at 8% before the rate change effective date of 1 Jan 2023.

The advance invoice pertaining to the services from 1 Oct 2022 to 31 Mar 2023 should reflect GST at 7%.

If you do not receive full payment before 1 Jan 2023, you are required to issue a credit note for the lower of remaining payment or the remaining value of service to be performed on/ after 1 Jan 2023. Thereafter, you are required to issue a new tax invoice in respect of the amount credited out to charge GST at 8%.

Alternatively, you may issue a credit note to cancel out the original invoice and at the same time, reissue new tax invoice(s) for the value of supply subject to GST at 7% and value of supply subject to GST at 8% .

No. You are not allowed to issue a tax invoice with GST at 8% before the rate change effective date.

If you issue a tax invoice before 1 Jan 2023, you should reflect 7% GST on the tax invoice. If the payment is not received before 1 Jan 2023, you will need to issue credit note to cancel the original tax invoice and to issue a new tax invoice for the goods delivered after the rate change, showing 8% as the GST rate.

When you issue the tax invoice to your customer before 1 Jan 2023, you are advised to inform your customer on the potential GST adjustment under the rate change transitional rules to avoid dispute on the GST rate and GST amount payable on the supply.

You are not allowed to reflect GST at 8% before the rate change effective date of 1 Jan 2023. Hence, your invoice that is issued in Dec 2022 should reflect GST of 7% on the rental for the period 5 Dec 2022 to 4 Jan 2023.

Subsequently, assuming payment has not been received before 1 Jan 2023, you should issue a credit note by 15 Jan 2023 to cancel the portion of the rental for the period 1 Jan 2023 to 4 Jan 2023 billed at 7%, and to issue a new tax invoice at 8% for the same period.
The rental can be apportioned based on the number of days as follows:

Portion of rental that is subject to the GST of 7%
= Monthly rental x 27/ 31 days
Portion of rental that is subject to the GST of 8%
= Monthly rental x 4/ 31 days

When you issue the tax invoice to your customer before 1 Jan 2023, you are advised to inform your customers on the potential GST adjustment under the rate change transitional rules to avoid dispute on the GST rate and GST amount payable on the supply.

If you provide rebates to your customer that represent a discount for a past sale, you should calculate the GST on the rebate using the rate that is originally charged on the sale.

On the other hand, if the rebate is used to offset against the value of your next sale to your customer which takes place on or after 1 Jan 2023, you should charge GST at 8% on the net value of the sale.

For returned goods, you should adjust the GST using the rate that is originally charged on your supply of goods and maintain documentary evidence to show whether the goods returned were supplied before or on/after 1 Jan 2023.

Source: IRAS – FAQ

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Different Business Structures in Singapore

There are a lot of factors needed to be considered when it comes to choosing a business structure as there are various types of it and each has its own advantages and disadvantages. There are five different types of business entities in Singapore which are:

1) Sole Proprietorship
2) Partnership
3) Limited Partnership
4) Limited Liability Partnership
5) Company

This guide will cater an overview of the numerous types of business entities in Singapore and the differences among them. 

1) Sole Proprietorship

A Sole Proprietorship, also known as a Sole Trader, is a business owned by one person.

Requirements:

He/She has to be either:

  • a Singapore Citizen
  • Singapore Permanent Resident
  • EntrePass Holder,
  • age 18 and above and
  • is not an undischarged bankrupt.
    •  

If a foreigner wishes to set up a business, he/she must designate a local representative.

The local representative must be:

  • A natural person
  • At least 18 years old
  • Of full legal capacity
  • Ordinarily resident in Singapore (i.e. has a Singapore residential address)
  •  

Closing a sole proprietorship

A sole proprietorship business will cease when the proprietor passes away or wishes to end the business. The Business Registration Act requires any person registered under it who has ceased to carry on business to notify the Registrar of this. Failing to do so is an offence and may result in the imposition of a fine.

If the sole-proprietorship is GST registered, the business owner has to apply for cancellation of GST registration with IRAS first.

Things to note

Sole proprietorship is ideal for those who are planning to start a one-person business and don’t expect the business to grow beyond yourself. It is the easiest and simplest to manage, yet the riskiest compared to the other business entities. Otherwise, one should consider this as a serious drawback and it is not recommended to inspiring entrepreneurs.

Profits are taxed at personal income tax rates ranges from 0% to 22%.

It is not a separate legal entity from the business owner and as such, the business owner is personally liable for all the debts and losses of the sole proprietorship, and the business owner can sue or be sued in his or her own name.

2) Partnership

Business partnerships are formed by the agreement between 2 or more individuals (maximum 20)  to carry on a business as co-owners.

Requirements

They has to be either:

  • a Singapore Citizen
  • Singapore Permanent Resident
  • EntrePass Holder
  • age 18 and above and
  • is not an undischarged bankrupt
  •  

 A local manager has to be appointed and is at least 18 years old and is not an undischarged bankrupt.

Closing a partnership

A partnership business will cease when one of the partners dies or when one of the partners wishes to terminate the business with the agreement of the other partners.

If the partnership is GST registered, the partners has to apply for cancellation of GST registration with IRAS first.

Tax Rates

Likewise, the tax rate imposed will be that of the partner, example; if the partner is an individual, the personal income tax rates will apply, if the partner is a company, corporate tax rates would apply. Personal tax rate ranges from 0% to 22%. The partnership income tax is paid by the partnership, but the profits and losses are divided among the partners, and paid by the partners, based on their agreement.

The risk of a partnership are similar to the Sole Proprietorship, thus it is not recommended for high-risk businesses and businesses with enthusiastic growth plans.

A partnership does not have its own separate legal identity from the partners. Therefore, unless otherwise agreed, the partnership will come to an end each time a partner leaves.

3) Limited Liability Partnership

Limited Liability Partnership is the most recent and most advanced business incorporation structure, as it combines the features of both partnerships and companies. It is a separate legal entity from their owners, which means that owners are not responsible for any debts or losses the business incurs.

Requirements

LLP have to have at least two partners who can be individuals (at least 18 years old) or body corporate (company or LLP) .

Every LLP must have at least one manager. He/She has to be who is an ordinary resident in Singapore and age 18 years and above.

Closing a LLP

An LLP will continue to exist until it is dissolved. Dissolution usually occurs after a process called “winding-up” has been completed.

Winding up begins after dissolution, where all partnership affairs will be settled. This includes the completion of unfinished transactions, payments to creditors, liquidation of assets and the distribution of proceeds to various partners.

Then will the partnership be terminated when all the partnership matters have been fully wrapped up.

Things to note

An LLP is capable of:

    • Suing and being sued in its name;
    • Acquiring and holding property in its name;
    • Having a common seal in its name and
    • Doing such other acts and things in its name, as bodies corporate may lawfully do and suffer.

The key features of a limited liability partnership are as follows:

Limitation of liabilities

The partners of the LLP will not be held personally liable for any business debts incurred by the LLP. A partner may, however, be held personally liable for claims from losses resulting from his own wrongful act or omission, but will not be held personally liable for such wrongful acts or omissions of any other partner of the LLP.

Declaration of solvency

LLP must submit to the Registrar an annual declaration of solvency or insolvency (i.e. being able or unable to pay its debts respectively) which will be made available to the public.

LLP gives owners the flexibility of operating as a partnership while having a separate legal identity like a private limited company.  It is mainly meant for carrying a profession (e.g. accountants, law firms, architects, etc.) where two or more professionals would like to build a joint practice in a common field, and is not suited for businesses that carry a trade. The owners must enter into detailed agreements about how the profits and management responsibilities are divided.

Perpetual Succession

The LLP has perpetual succession, which means that any change in the partners of a LLP will not affect its existence, rights or liabilities.

3) Company

A company is a separate legal entity and can incur debt, sue and be sued. A company’s business line depends on its structure, which can range from a partnership to a proprietorship, or even a corporation. 

Companies may be either be:

  • public; having 50 members or less, or
  • private; can have more than 50 members. 
  •  

Requirements

Likewise, a company must designate a local director that is at least 18 years old and is an undischarged bankrupt. 

Things to note:

A private limited company is the most common form of the company chosen by entrepreneurs and investors, mainly due to the tax incentives that can be applied for.

A company is considered as a separate legal entity which means that the members of the company will not be held personally liable for the debts or losses of the company. 

Unlike all the other business entities, a private limited company can qualify for tax exemption schemes and is taxed at the effective corporate tax rate of 17%.

Perpetual Succession

Members in a company may come and go but the company will still remain and proceed to continue its business forever or until it is closed down. This means that a company has the characteristics of perpetual succession, thus giving the company a safer and a more stable area for investors to invest their money on and enhance the chances of their investment being a success. 

Closing a Company

A company can cease to exist in one of the two options, either by;

  • winding up or,
  • striking off

Comparison

Sole Proprietorship

Partnership

Limited Liability Partnership

Company

  • It is easy to set up and the cost is minimal.
  • Owner has full control of the business.
  • All the profits generated by the business will belong to the sole-proprietor.
  • Profits are taxed at personal income tax rates
  • No separate legal entity.
  • Has unlimited liability.
  • It can sue or be sued in the owner’s name.
  • No perpetual succession.
  • No corporate tax incentives and benefits.
  • It is easy to set up and the cost is minimal.
  • Easier administration and management of the business.
  • Reduced compliance obligations.
  • No separate legal entity.
  • Has unlimited liability.
  • Flexibility of succession is variable.

  •  

  • It is easy to set up and the cost is minimal.
  • Easier administration and management of the business.
  • Reduced compliance obligations.
  • Separate legal entity.
  • Perpetual succession.
  • Flexibility of succession is variable.
  • Difficult to transfer ownership of business.
  • Higher registration cost and its costly to maintain due to more compliance obligations.
  • Limited liability.
  • Excellent tax benefits.
  • Perpetual Succession.
  • Separate legal entity.
  • Annual General Meeting has to be conducted.
  • Annual Return filing with the Authority.
  • Estimated Chargeable Income and Corporate Tax to be filed.

     

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Rental Relief for SME Tenants in Private Non-Residential Properties

For SME tenants (i.e. with not more than $100 million in annual turnover) with qualifying leases or licences commencing before 25 March 2020, the Government will provide a new cash grant to offset their rental costs as stated in Table 1.

SME property owners who run a trade or business on their own property will also be eligible for the new cash grant. Vacant property and land under development will not be eligible.

Implementation of the New Government Cash Grant

The new government cash grant will be disbursed automatically by IRAS to the qualifying property owners.

The amount of grant will be calculated based on the Annual Values of properties for 2020, as determined by IRAS at 13 April 2020.

For property owners whose properties are only partially let out, or whose properties are let out to both SME and non-SME tenants under a single property tax account, they will not automatically receive the government cash grant.

In such instances, the property owner should submit an application to IRAS, and provide supporting documents, including proof of SME tenants within its property. IRAS will pro-rate the government cash grant accordingly.

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How to pass property tax rebate from property owner to tenant

Resilience Budget on property tax

As part of the Resilience Budget announced on 26 Mar 2020, qualifying nonresidential properties (“qualifying properties”) will be granted up to 100% of property tax rebate for the period of 1 Jan 2020 to 31 Dec 2020.

For most properties that are eligible for 100% property tax rebate, this is equivalent to slightly more than one month’s rental.

Owners of qualifying properties are required to unconditionally and fully pass on to their tenant(s) the rebate for the property tax account that is attributable to the rented property, by either reducing or offsetting current or future rentals or through a payment to their tenant(s), within the prescribed time frame.

Prescribed Amount of Rebate for Passing on – Where the Whole Property is Leased or Licensed to Single Tenant

There are two options for the property owner to fulfil his obligation in passing on the prescribed amount of rebate to his tenant(s), Option 1A and Option 2A.

Option 1A

The owner must pass on to a tenant the total of the sums calculated for each month of the year 2020 in which the tenant rents the property.

PTR / 12 X D/D(Month)

“PTR” is:
(a) the rebate amount for the property before any change in circumstances occurs;
(b) Zero, if there is no rebate amount mentioned in (a); 

“D” is the number of days in the month for which the tenant is a prescribed lessee or prescribed licensee of the property;

“D(Month)” is the number of days in the month

Option 2A

The property owner may choose to pass on the whole of the rebate amount of the property to:
(a) The tenant of the property on 3 April 2020;
(b) If there is no tenant as mentioned in (a) for the property, the first tenant  of the property in the period between 4 April 2020 and 31 July 2020 (both dates inclusive); or
(c) If there is no tenant of the property, in paragraphs (a) or (b), then only Option 1A applies.

Prescribed Amount of Rebate for Passing on – Where Part of Property is Leased or Licensed to Tenant or Different Parts of the Property are Leased or Licensed to Different Tenants

There are two options for the property owner to fulfil his obligation in passing on the prescribed amount of rebate to his tenant(s), Option 1B and Option2B.

The property owner has to adopt the same option, either Option 1B or Option 2B, in respect of the different parts of the property.

Option 1B

The owner must pass on to a tenant the total of the sums calculated for each month of the year 2020 in which the tenant is such a lessee or licensee.

𝑁𝑅 × 10% × 𝑃𝑇𝑅(%) × 𝐷/𝐷(𝑀𝑜𝑛𝑡ℎ)

“D” is the number of days in the month for which the tenant is a prescribed lessee or prescribed licensee of the part of the property;
“D(Month)” is the number of days in the month;
“NR” is the net rent* payable by the tenant for the part of the property for the month;
“PTR(%)” is the rate of the property tax rebate granted for the part of the property

*This net rent is the rent, licence fee or similar payment payable by the prescribed lessee or prescribed licensee of the property or part of the property to the owner of the property under the lease or licence agreement between the prescribed lessee or prescribed licensee and the owner which (a) Includes the following amounts payable under the agreement:
(i) any amount determined by the gross turnover (GTO)** of any business carried on by the lessee or licensee at the property or part of the property;
(ii) fees for repair, insurance, maintenance and upkeep of the property or part of the property, and property tax payable by the owner; but
(b) Excludes the following amounts payable under the agreement:
(i) any amount in respect of the provision of services (e.g. cleaning,
refuse disposal and advertising and promotion) by the owner to the lessee or licensee; and (ii)any goods and services tax.

Where for any month, the month amount plus previous months cumulative amount determined using Option 1B for every tenant  would together exceed the rebate amount for the property, the amount of that rebate amount less the previous months cumulative amount is to be passed on to each tenant on a proportionate basis if there is more than one subject tenant; or the tenant in whole, if there is only one tenant

Option 2B

The property owner may choose to pass on the rebate for each part of the property as follows:
(a) Where the part of the property is granted a property tax rebate of 100% or 60%, an amount of at least 1.2 x AR
(b) Where the part of the property is granted a property tax rebate of 30%, an amount of at least 0.36 x AR
to the tenant as follows:

(i) The tenant of the part of the property on 3 Apr 2020;
(ii) If there is no tenant as mentioned in paragraph 9.17(i) for the part of the property, the first tenant of that part in the period between 4 Apr 2020 and 31 Jul 2020 (both dates inclusive); or
(iii) If there is no tenant of the property, in paragraphs 9.17(i) or (ii), then only Option 1B applies. 

“AR”’ is the average net rent* per month payable by the tenant for the part of the tenant’s lease or licence that falls in the period starting on 1 Jan 2020 and the last day of the month immediately before the month in which the owner passes on or begins to pass on the benefit (both days inclusive). If the duration of the lease or licence in the period 1 Jan 2020 and the last day of the month in which the owner passes on or begins to pass on the rebate (both days inclusive) is less than one month, the net rent payable for that part of the month must be used to determine a proportionate amount for the whole month, which is then to be treated as the average net rent per month for the period.

Where the sum total of the amounts determined for all such tenants of the property would exceed the rebate amount for the property, then the amount of rebate must be passed to those tenants on a proportionate basis.

 

 

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IRAS Extends Tax Filing Deadlines

As part of its support for taxpayers in light of the latest measures to manage the COVID-19 situation, the Inland Revenue Authority of Singapore (IRAS) is providing an automatic extension of deadlines for tax filing for individuals and businesses:

Tax Type Original Filing Deadline Extended Filing Deadline
Income Tax for Individuals (including sole proprietors and partnerships)18 Apr 202031 May 2020
Income Tax for Trusts, Clubs and Associations15 Apr 202031 May 2020
Estimated Chargeable Income (ECI) for companies with Financial Year ending Jan 202030 Apr 202031 May 2020
GST Returns for accounting period ending Mar 202030 Apr 202011 May 2020
S45 Withholding Tax Forms due in Apr 202015 Apr 202015 May 2020
Tax Clearances for foreign employee in Apr 2020 -1 additional month
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Singapore Budget 2020 affecting companies

Jobs Support Scheme ("JSS")

Current Treatment

Not applicable

New Treatment

Employers will receive an 8% cash grant on the gross monthly wages of each local employee (applicable to Singapore Citizens and Permanent Residents only) for the months of October 2019 to December 2019, subject to a monthly wage cap of $3,600 per employee.   

Employers do not need to apply for the JSS. The grant will be computed based on CPF contribution data.   

Employers can expect to receive the JSS payment from the Inland Revenue Authority of Singapore (IRAS) by 31 July 2020.

Wages paid to business owners will not be eligible for the grant. 

Enhancement to Wage Credit Scheme ("WCS")

Current Treatment

Under WCS, the Government will co-fund a part of wage increases given to Singaporean employees earning a gross monthly wage of up to $4,000.

  • 2013 to 2015: 40% cap at $4,000
  • 2016 to 2018: 20% cap at $4,000
  • 2019: 15% cap at $4,000
  • 2020: 10% cap at $4,000

Employers do not need to apply for the WCS. The grant will be computed based on CPF contribution data. 

Payouts will be given to employers by 31 Mar of the payout year.

New Treatment

The monthly wage ceiling will be raised from $4,000 to $5,000 for qualifying wage increases given in 2019 and 2020.

  • 2013 to 2015: 40% cap at $4,000
  • 2016 to 2018: 20% cap at $4,000
  • 2019: 20% cap at $5,000
  • 2020: 15% cap at $5,000

Government co-funding levels will also be raised for 2019 and 2020 qualifying wage increases by five percentage points, to 20% and 15% respectively. 

Corporate Income Tax ("CIT") Rebate 

Current treatment

YA2019: 20% of tax payable, capped at $10,000

New treatment

YA2020: 25% of tax payable, capped at $15,000

Automatic extension of interest-free instalments of 2 months for payment of CIT on Estimated Chargeable Income (“ECI”) filed within 3 months from the companies’ financial year-end (“FYE”)

Current Treatment

Tax payable on first ECI e-Filed within

  • 1 months from year end: 10 months
  • 2 months from year end: 8 months
  • 3 months from year end:  6 months
  • After 3 months from year end: No instalments allowed

New Treatment

Tax payable on first ECI e-Filed within

  • 1 months from year end: 12 months
  • 2 months from year end: 10 months
  • 3 months from year end:  8 months
  • After 3 months from year end: No instalments allowed

Increase the number of YAs for which the current year unabsorbed capital allowances (“CA”) and trade losses for a YA (collectively referred to as “qualifying deductions”) may be carried back 

Current Treatment

“Qualifying Deductions” (“QD”) can be carried back for one YA immediately preceding that YA in which the CAs are granted or the trade losses incurred capped at $100,000.

New Treatment

“Qualifying Deductions” (“QD”) for YA2020 can be carried back for three YA  (i.e YA2017) capped at $100,000.

Provide an option to accelerate the write-off of the cost of acquiring plant and machinery (“P&M”)

Current Treatment

A taxpayer who incurs capital expenditure on the acquisition of P&M in the basis period can claim Capital Allowances (CA) over

Section 19A

  • 100% Write-Off in One Year
  • Write-Off Over Three Years

Section 19

  • Write-Off Over the Prescribed Working Life of the Asset

New Treatment

A taxpayer who incurs capital expenditure on the acquisition of P&M in the basis period for YA2021 (i.e. financial year (“FY”) 2020) will have an option to accelerate the write-off of the cost of acquiring such P&M over 2 years.

The rates of accelerated CA allowed are as follows:

a) 75% of the cost incurred to be written off in the first year (i.e. YA2021); and,
b) 25% of the cost incurred to be written off in the second year (i.e. YA2022).

Provide an option to accelerate the deduction of expenses incurred on renovation and refurbishment (“R&R”)

Current Treatment

A taxpayer which incurs qualifying expenditure on R&R during the basis period for the purposes of its trade, profession or business can claim Section 14Q deduction  over three consecutive YAs starting from the year in which the R&R expenditure is incurred, i.e. 1/3 of the R&R expenditure can be claimed in each of the three YAs.

The amount of R&R costs that qualify for tax deduction as a business expense is capped at $300,000 for every relevant three-year period, starting from the year in which the R&R costs are incurred.

 

New Treatment

A taxpayer which incurs qualifying expenditure on R&R during the basis period for YA2021 (i.e. FY2020) for the purposes of its trade, profession or business will have an option to claim R&R deduction in 1 YA (i.e. accelerated R&R deduction).

The amount of R&R costs that qualify for tax deduction as a business expense is capped at $300,000 for every relevant three-year period, starting from the year in which the R&R costs are incurred.

Extend the Mergers & Acquisitions (“M&A”) scheme

Current Treatment

Under the M&A scheme, an M&A allowance will be granted to a company that acquires another company during the period 1 Apr 2010 to 31 Dec 2020 (both dates inclusive). The M&A allowance will be allowed on a straight line basis over five years and the allowance cannot be deferred. Companies must meet certain conditions to remain eligible for M&A allowance for each Year of Assessment (YA) during the five-year write-down period.

  • 1 Apr 2016 to 31 Dec 2020:  The M&A allowance is 25% of the value of acquisition, , subject to a maximum amount of $10 million for all qualifying share acquisitions in the basis period for each YA. Maximum M&A allowance for each YA will be reached with an acquisition of $20 million in that YA.
  • 1 Apr 2015 to 31 Mar 2016: The M&A allowance is 25% of the value of acquisition, , subject to a maximum amount of $5 million for all qualifying share acquisitions in the basis period for each YA. Maximum M&A allowance for each YA will be reached with an acquisition of $20 million in that YA.
  • 1 Apr 2010 to 31 Mar 2015: The M&A allowance is at 5% of the value of acquisition, subject to a maximum amount of $5 million for all qualifying share acquisitions in the basis period for each YA. Maximum M&A allowance for each YA will be reached with an acquisition of $100 million in that YA.

New Treatment

The M&A scheme will be extended to cover qualifying acquisitions made on or before 31 December 2025.

The scheme will remain unchanged for acquisitions made on or after 1 April 2020, except for the following:

  1. Stamp duty relief will lapse for instruments executed on or after 1 April 2020; and
  2. No waiver will be granted for the condition that the acquiring company must be held by an ultimate holding company that is incorporated in and is a tax resident of Singapore. This will apply for acquisitions made on or after 1 April 2020.
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Singapore corporate tax exemptions caa 18 Feb 2020

Partial tax exemption for companies (from YA 2020)

Chargeable income% exempted from TaxAmount exempted from Tax
First $10,000@75%=$7,500
Next $190,000@50%=$95,000
Total $200,000 =$102,500

Tax exemption scheme for new start-up companies (where any of the first 3 YAs falls in or after YA 2020)

Chargeable income% exempted from TaxAmount exempted from Tax
First $100,000@75%=$75,000
Next $100,000@50%=$50,000
Total $200,000 =$125,000

Partial tax exemption for companies (YA 2010 to YA 2019)

Chargeable income% exempted from TaxAmount exempted from Tax
First $10,000@75%=$7,500
Next $290,000@50%=$145,000
Total $300,000 =$152,500

Tax exemption scheme for new start-up companies (where any of the first 3 YAs falls in YA 2010 to YA 2019)

Chargeable income% exempted from TaxAmount exempted from Tax
First $100,000@100%=$100,000
Next $200,000@50%=$100,000
Total $300,000 =$200,000

YA 2020
Companies will be granted a 25% Corporate Income Tax Rebate capped at $15,000.

YA 2019
Companies will be granted a 20% Corporate Income Tax Rebate capped at $10,000.

YA 2018
Companies will be granted a 40% Corporate Income Tax Rebate capped at $15,000

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Government Grants – SkillsFuture Earn and Learn Programme

The SkillsFuture Earn and Learn Programme offers Employers a grant of up to S$15,000 per individual employed under the programe.

Background

The SkillsFuture Earn and Learn Programme is a work-learn programme that gives fresh graduates (within three years of graduation or Operationally Ready Date for National Servicemen) from polytechnics and the Institute of Technical Education (ITE) a head-start in careers related to their discipline of study. It provides them with more opportunities, after graduation, to build on the skills and knowledge they acquired in school, and better supports their transition into the workforce.

Participating employers can recruit local fresh talent, within three years of graduation or the Operationally Ready Date for National Servicemen and prepare them to take up suitable job roles. Participants in the programme can look forward to a structured career progression pathway within the organisation.

Benefits for the Employers

You will be able to groom and retain suitable talent with the relevant skills and aptitude to meet the needs of your company.

You will also receive a grant of up to $15,000 per individual placed in the SkillsFuture Earn and Learn Programme to defray the costs of developing and providing structured on-job-training and to encourage them to set out career progression pathways.

* Terms and Conditions apply

To sign up, please visit ELP portal.

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Changes on statutory requirements for AGM and filing of AR

To provide greater clarity for companies and reduce the compliance burden, the timelines for holding Annual General Meetings (AGMs) and the filing of annual returns will be aligned with the company’s FYE.

Timeline for holding AGMs and filing of annual returns​

Holding of AGMs

Current

For Companies with FYE ending on or after 31 Aug 2018 

(a) Timeline 1: Hold first AGM within 18 months of incorporation, and subsequent AGMs yearly at intervals of not more than 15 months

(b) Timeline 2: Financial statements tabled at AGM must be made up to a date within 4 months (for listed company) or 6 months (for any other company) before the AGM date.

For listed companies: Hold AGM within 4 months after FYE For any other company: Hold AGM within 6 months after FYE

Filing of Annual Returns

Current

For Companies with FYE ending on or after 31 Aug 2018 ​

For companies having a share capital and keeping a branch register outside Singapore
• File annual returns within 60 days after AGM

For other companies
• File annual returns within 30 days after AGM

For companies having a share capital and keeping a branch register outside Singapore:
• File annual returns within 6 months (if listed) or 8 months (if not listed) after FYE

For other companies:
• File annual returns within 5 months (if listed) or 7 months (if not listed) after FYE

Annual return can be filed only:
• after an AGM has been held;
• after financial statements is sent if company need not hold AGM; or
• after FYE for private dormant relevant company that is exempted from preparing financial statements.

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Changing of Company’s Financial Year End (FYE)

With effect from 31 August 2018,

1. companies must notify the Registrar of their FYE upon incorporation and of any subsequent change;

Company A is incorporated on 1 Jan 2019. The company must notify the Registrar of its FYE upon incorporation.

Company B was incorporated on 1 Jan 2018 and has not yet lodged any AR with ACRA.
After new law comes into effect, the company’s first FYE will be deemed by the new law to be 1 Jan 2019.

Company C’s FYE deemed by the new law is 31 Mar 2019 

On 31 Jan 2019, company A wants to change its FYE to 30 Apr 2019  
• Not required to seek Registrar’s approval

• FYE changed to 30 Apr 2019.  

2. companies must apply to the Registrar for approval to change their FYE:

  • if the change in FYE will result in a financial year longer than 18 months; or
  • if the FYE was changed within the last 5 years; and

3. unless approved by the Registrar, the duration of a company’s financial year must not be more than 18 months in the year of incorporation.

Continuing from previous example

On 31 Dec 2020, company C wants to change its FYE to 1 Feb 2021  

Company C must seek Registrar’s approval for the FYE change because this is the second change within the last 5 years of the last changed FYE (30 Apr 2019).  

Company D indicated in its AR filed in 2019 that its previous FY ended on 31 Mar 2019. Its next FYE should be 31 Mar 2020. 

On 31 Jan 2020, company Dwants to change its FYE to 31 Dec 2020. 

Company D must seek Registrar’s approval for the FYE change because this will result in a financial year which is longer than 18 months (from 1 Apr 2019 to 31 Dec 2020). 

4. only FYE of the current and immediate previous financial year may be changed (provided that statutory deadlines for the holding of AGM, filing of annual return and sending of financial statements have not passed).

Company E’s FYE notified in AR last filed with ACRA is 31 Mar 2021. Its next FYE should be 31 Mar 2022. 

On 10 Nov 2025, company E wants to change its FYE for 2022 from 31 Mar 2022 to 31 Dec 2022.  

Company E is not allowed to do so, because it can only change its previous or current financial year.

Company F indicated in its AR filed in 2019 that its previous FY ended on 31 Mar 2019. Its next FYE should be 31 Mar 2020.

On 1 Dec 2020, company F wants to change its FYE from 31 Mar 2019 to 31 Dec 2020.

Company F is not allowed to do so, because the deadline for the holding of AGM, filing of AR or sending of financial statements for the current financial year have passed. 

A company’s financial periods starting on or after 31 Aug 2018 by default will be taken to be a period 12 months for each financial period.

Important information for newly Incorporated companies that have yet to file Annual Returns

Companies incorporated before 31 August 2018 will have their FYE deemed by law to be the anniversary of the date previously notified to the Registrar as their FYE date.

Company G has indicated in its AR previously filed with ACRA that its FYE is 31 Mar 2018.
After new law comes into effect, the company G’s next FYE will be deemed by the new law to be 31 Mar 2019.

In the absence of such notification before 31 August 2018, the anniversary of the date of incorporation will be deemed by law to be their FYE.

Company H was incorporated on 1 Jan 2018 and has not yet lodged any AR with ACRA.
After new law comes into effect, the company H’s first FYE will be deemed by the new law to be 1 Jan 2019.

Companies can change their FYE by notifying ACRA before or after 31 August 2018 .