Businesses throughout Singapore are going to have the opportunity to take advantage of a 250% taxed deduction just by committing to sending their employees to do volunteer work.

Yes, you’re reading that correctly. The government of Singapore (through the new Business and IPC Partnership Scheme) is committed to making sure that businesses are able to reap significant rewards by encouraging their employees to volunteer at IPC partnership scheme volunteer opportunities.

Businesses large and small are going to be able to save 250% in the form of a tax deduction on wages and related expenses when they actually send out their employees to provide services through the Institution of Public Character.

Professionals are going to be able to provide services across a wide variety of areas, including legal services, human resources, accounting, and consulting programs. Those that lead more blue-collar style jobs are also going to have the opportunity to take advantage of this program, providing “hands-on” assistance through these volunteer organization that are in high demand as well.

Initiative to improve the amount of volunteers contributing to the growth of Singapore

Singapore has always (likely will always) have a serious eye to the future when they rollout programs like this.

Recognizing that they are volunteer numbers were dipping across the board, the overwhelming majority of individuals in the Singapore government banded together to come up with this scheme to encourage business operations, large organizations, and entrepreneurs throughout the nation to help reverse the tide.

The government hopes to establish a real culture of volunteerism throughout Singapore, and though they anticipate that this culture will take at least five years to really establish and some met, they are pouring all kinds of resources into the program to make sure that it gains tremendous momentum.

Businesses and volunteer organizations benefit – as do the volunteers themselves

Even though it may look like (on the outside, at least) that the businesses of Singapore and the volunteer organizations that receive volunteers are the main benefactors of this program, it would be a huge disservice not to mention the many benefits that the volunteers are going to enjoy along the way.

With these tax benefits coming to the businesses much of those rewards are going to trickle down to the employees themselves. On top of that, they are also going to get a tremendous amount of outside experience that they wouldn’t have received otherwise sitting in their office all the time and never getting the opportunity to see the impact of their career, their work, and they are ability’s firsthand.

A caring, cohesive, and community focused culture has always been important in Singapore. Businesses and employees (as well as those throughout the government) recognize that everyone has the opportunity to enjoy a much greater role in meeting the social needs of Singapore and really fostering the kind of close knit culture that is so important here.

The benefits of the program are many, and none should be surprised to learn that other nations adopt the same kinds of programs in their country to enjoy the same benefits as well!

With April comes that dreaded time of the year again where many people in countries across the planet file their taxes. In Singapore, the process is no different. Or, perhaps it is. Taking steps to make filing income tax easier and simpler, the IRAS have announced a series of new measures to speed up the process. This includes being able to file your income tax using your phone, and more. Let’s take a moment to review some of these changes so you have a better sense of what filing for 2015 will be like.

Filing Today

Before we begin, let’s review a few of the important dates coming up. If you are filing online, then be sure to have all your information in and submitted by April 18. If you decide to submit your information via paper, then be sure to have the information sent by the April 15 deadline. Be sure, especially if you submit the paper, to file early. This will help you beat the typical rush of people trying to get their information in on time.

Tax Bill Preview

Want a preview of your tax bill presented online? The IRAS is making that possible, providing quick results for the nearly 1.4 million people and growing who use the no-filing service scheme. With an average return time of 3 business days, it has ever been easier to get tax results back, planning your finances accordingly and with greater predictive certainty.

‘File For You’ Easier

If you have someone file your taxes for you, or you file people’s taxes, then you are in luck as well. The IRAS has gone out of their way to provide an easier process for those who are commission earners who file taxes. In addition, the numbers of organization filing taxes for people and their early submission dates have nearly doubled, providing a faster system and quicker results for everyone involved.

Easier Time For Owners Of Tenant Residential Properties

Do you own one or more residential properties that have tenants? Also known as tenant rental properties, IRAS has taken steps to make there be a simplified tax filing structure. With more options available to those filing an online tax forms now available, filing your taxes will be easier than they have ever been in the past.

Immediate Confirmation For Personal Reliefs

There is a range of personal reliefs that people can apply for, including child relief, grandparent caregiver relief, and foreign maid levy relief. Typically, people would have to wait and hear back through their tax forms whether or not they qualified. IRAS now offers a program that provides instant yes or no responses depending on your situation. Simply fill it out, plan your finances accordingly, and rest assured that you qualify.

File On The Go

Last but not least, IRAS is offering a mobile platform for people to use to pay their taxes. Simple, straightforward, and easier than ever before, more and more people are getting their taxes in on time thanks to the mobile file on the go system put in place.

Business leaders, entrepreneurs, and economists all over the world have long considered Singapore to be one of the world’s most brightly shining lights as far as a government friendly to business is concerned.

This nation has always fully embraced everything that they are businesses have to offer, and for decades they have worked diligently to create the kind of business friendly environment that has helped to attract business leaders from all over the world to her shores.

Many people believe that this is the reason that Singapore has been able to establish itself as maybe three most influential nation in the Pacific as far as international business is concerned – and new tax breaks for companies and firms that are looking to push forward incredible innovations in Singapore are going to only further cement this theory.

Singapore looks to attract even more foreign investment with these initiatives
The amazing thing about Singapore is that it has been able to almost effortlessly grow not only their local economic base by fostering entrepreneurial tendencies, creativity, and innovation in their own citizens but that they’ve also been able to do the exact same thing by attracting foreign investments as well.

This is a significant challenge for the overwhelming majority of countries out there, as they usually have to find ways to prioritize one group or the other.

Singapore, on the other hand, has been able to almost effortlessly attract foreign investors while at the same time supporting local businesses, capitalists, and entrepreneurs – and they’ve been doing so for decades.

This new tax initiative (called the Economic Expansion Incentives Act) is going to really help improve the amount of tax relief that businesses are going to be able to enjoy if they bring their “pioneering activities” to Singapore.

Bringing the headquarters of companies into Singapore

The major push that this new tax initiative is going to focus on is finding ways to attract foreign companies to not only set up satellite organizations and offices in Singapore, but to actually base themselves out of this very business friendly country.

In this way Singapore hopes to establish clusters of new industries, create fantastic jobs for the people of Singapore, and bring in a lot of extra revenue that wouldn’t have existed previously.

Singapore is able to do all of this so efficiently and effectively because they have been following a systematic plan to improve the conditions for businesses in their country over the past few decades. This is in no way, shape, or form a departure from “regular business” from the Singapore government, but is instead a natural extension of all of the previous initiatives that they have already put into play.

In fact, the Economic Expansion Incentives Act is a clarification on the tax relief extensions that were offered 20 years ago under the Development and Expansion Incentive scheme. Singapore is, has always, and likely will always support business innovation and fostering capitalists – and this tax break is only going to help them do so moving forward!

The core aim of the tax policy within the Singapore tax system is to raise revenue. 89.8% of this revenue is taken from the taxes imposed on Singapore citizens. This revenue is then distributed to important government operations in order to facilitate economic growth whilst still preventing inflation, maintaining a balanced budget and most importantly to deliver essential public services and goods. A lot of the revenue raised is put into the education system as highly educated citizens is considered of high importance by the Singapore government. A section of the tax revenue also goes towards national healthcare, and environmental protection as well as housing programmes.

Further Tax Policy Objectives

Although the primary aim of the Singapore tax policy is to provide funding for government operations, there are still other objectives that are considered important.

Economic and Social Goals

A highly important objective is the desire to increase economic growth by imparting a sense of economic and social goals within the citizens of Singapore. The government has used the tax system in order to reach this goal.

• The Singapore government has gifted certain business with an accelerated capital allowance. This means that they receive funding for any assets that are used regularly by the business.
• Parents have been provided with a tax rebate after the birth of every child up to the fifth child. The aim of this is to encourage families to have more children which will in turn increase social mobility and economic growth, as well as increasing the amount of highly educated adults.

Competitive Rates

By keeping corporate rates competitive, the government aims to encourage more foreign investment to give the economy an important financial boost. As well as, the government counteracts this by consistently keeping individual rates low in order to encourage tax payers to work harder.

Tax Breakdown

Income

• Income Tax – This is a tax that is imposed on every individual that works within Singapore. Income tax is also charged to businesses. The amount of tax charged will be dependent on the level of income.

Property

• Property Tax – The government estimates the rental value of all properties that are privately owned. The final estimate of this represents the property tax that is charged to owners.

• Estate Duty – The estate duty tax comes into play when the value of a deceased’s assets exceeds a pre-determined set amount.

• Stamp Duty – When legal documents relating to stocks, shares and immovable property are concerned the stamp duty is imposed.

Automobiles

• Motor Vehicle Tax – Motor vehicle tax is imposed of automobile owners for two reasons. The first reason is to restrict the level of car ownership throughout the country and the second reason is to tackle the problem of extreme road congestion.

Goods

• Goods and Services Tax–Whenever money is given in exchange for goods including imports then the goods and services tax will need to be paid. This also includes products that have already been subjected to customs and excise duties. Therefore this can be considered a tax on consumption.

Every corporate entity residing in Singapore, being resident or non-resident, is required by IRAS to file a separate tax return every calendar year on all his incomes including gains or profits from a trade or profession and earnings from employment. This tax return filing must be done in respect to the tax compliance and preceding year given by IRAS.

Corporate Tax Rates
Beginning 2010, all corporate income in Singapore is taxed at a rate of 17%. However this can be reduced further if companies take advantage of several government’s corporate tax schemes and subsidies available.

Save on corporate tax benefits scheme for your company

In order to be encouraging new investments and maintain a conducive business environment, the Start-up Tax Exemption Scheme was introduced in the year 2004, which aids newly incorporated qualified companies on their taxable profits in the first 3 years of their newly startup operations.

Tax exemption is given on normal chargeable income of up to a maximum of S$300,000 for each of the first 3 consecutive years of operation:

Full tax exemption on the very first S$100,000 profit made by the company:

• For the first S$100,000, there will be a 100% exemption and the exempt amount is S$100,000
• For the next S$200,000, there will be a 50% exemption and the exempt amount is S$100,000
• Therefore, the total exempt amount for income up to S$300,000 will be S$200,000

The Government has also introduced the Partial Tax Exemption Scheme in the year 2008 for Small and Medium-sized Enterprises (SME) in Singapore.

• For the first S10,000, there will be a 75% exemption and the exempt amount is S$7,500.
• For the next S$290,000, there will be a 50% exemption and the exempt amount is S$145,000
• Therefore, the total exempt amount for income up to S300,000 will be S$152,500

Avoid double taxation

At times, the foreign income of a Singapore resident company may be subjected to taxation twice. This happens once overseas, and a second time when the income has been remitted into Singapore.

In such case, a foreign tax credit scheme by the Inland Revenue Authority of Singapore (IRAS) allows a company to claim a credit for tax paid in the foreign country against the Singapore tax that is payable on the same income.

Under this, there are three types of credit or relief that can be claimed:

Foreign Tax Credit (FTC):

Companies may claim FTC to avoid being taxed twice. However anyone claiming has to be eligible and satisfy the following conditions:

1. The individual must be a tax resident in Singapore for the relevant basis year;
2. Tax has been paid or is payable on the same income in the foreign country; and
3. The income is subject to taxation in Singapore

Double Tax Relief (DTR):

This credit relief aids in countering double tax scenarios

Unilateral Tax Credit (UTC):

This scheme affects foreign tax paid by Singapore tax residents in countries without DTA.

UTC is allowed only when repatriated income is being generated from a professional, consultancy or other services which is not borne, directly or indirectly by a resident in Singapore. It is not deductible against any income accruing in or derived from Singapore such as employment income and dividends income.

Productivity and Innovation Credit Scheme:

One of the very popular ways to maximize your corporate tax benefits in Singapore is applying for PIC.

PIC (Productivity & Innovation Credit) is a scheme that has been implemented by the government to help businesses cope with rising operating costs such as rent and wages. For business to claim the PIC Cash Pay-out, one should fulfil the following any of the 6 qualifications:

1. Lease or acquire IT (Information Technology) equipment.
2. License/acquire IP (intellectual Property) Rights.
3. Training fees.
4. Registering of designs, patents and trademarks.
5. Design projects.
6. Research and development activities.

This scheme aids businesses which invest in productivity and innovation by having their operations upgraded to create new value by providing tax deductions/exemptions for the 6 qualifying activities. Under this scheme, companies can enjoy 60% cash payouts or 400% tax deductions/allowances for investing in productivity and innovation improvements.

In order to qualify for PIC, the expenditure has to be incurred on the basis period of the Year Assessment that has qualified. Next, the business needs to be active with at least sales revenue. The company should also consist of at least 3 local employees with CPF contributions during the last month of the quarter or the whole year where the payout option relates.

To apply, the company should prepare the following documents that is required by the Inland Revenue Authority of Singapore (IRAS):

• PIC cash payout application form ( Can be printed out from IRAS website )
• Employee’s CPF contribution statements
• Minimum of 3 copies of NRIC (Singaporean)

Corporate Income Tax Rebate

This scheme was introduced in year 2013. For year assessment of 2013 to 2015, the CIT rebate (Capped annually at S$30,000) grants a 30% relief to all Singapore incorporated companies.

Corporate Income Tax Rebate has been extended to year assessment of 2016 to 2017 with a 30% relief and capped annually at S$20,000.

 Research Incentive Scheme for Companies

Similar to PIC, this scheme aims in encouraging and to assist businesses to set up Research and Development centres in Singapore in strategic areas of technology.

A proposed project must bring in R&D capability that is strategic on enhancing the competiveness of the company. Also, the programme has to be long term commitment by the company and result in measurable benefits. Training and increasing of research scientists and engineers as well.
In terms of support that the RISC provides:

30% support for equipment, materials and software costs

50% support for manpower-related cost

30% support for professional services

30% support for intellectual property rights

Pioneer Incentive

This incentive aims to provide corporate tax exemption on income from qualifying activities. Any applicants who wishes to apply for this incentive are required to submit plans for new substantive contributions, including commitments that is significant in incremental capital expenditure. Also one has to submit their business spending and skilled jobs present in Singapore.

There are three categories of foreign income that are exempted from the Singapore tax. People should learn about this information, so they can know their tax status. Three foreign income categories that are exempted from tax are foreign dividend, foreign profits, and also foreign sourced service income.

Several Important Conditions for Getting the Tax Exemption:

According to Section 13(9) of the Income Tax Act in Singapore, the tax exemption can be approved when three conditions are met. There are three different conditions that people have to consider when they want to apply for this tax exemption. Here are top three conditions that should be met by Singapore companies.

1. The highest corporate rate that is received from the foreign country is about 15% or more of the foreign income that is received in Singapore.
2. The foreign income is subjected to tax in the other countries where these incomes were received. In certain cases, the tax rate of the foreign income is different from the company tax rate. This situation is also acceptable as the condition for the tax exemption.
3. The comptroller agrees that the tax exemption is beneficial for the person living in Singapore.

Administrative Procedures:

There are several procedures that people have to do when they are planning to apply for tax exemption in Singapore. All procedures should be done properly to avoid any problems in the future. There are several important information that should be submitted in the income tax return form (Form C), including:

1. Sum of all incomes received
2. Country where the income comes from
3. Highest tax rate in the foreign country
4. Confirmation letter to confirm that the foreign tax has already been paid in the original country

All people should also fill in the Form C-S or Form C based on their conditions. This form should be submitted with all required information as mentioned above. All information should be submitted to IRAS upon request. It is important to contact this official to learn more about how to submit all documents to IRAS properly.

After people fill out all of that information on the right form, the Comptroller is going to decide whether the foreign income can be subjected to tax or not. In order to complete all procedures, people have to fill the income tax return (Form C of Form C-S) completely before they submit their application. They also need to submit all documents that are required by IRAS department. These documents should be submitted based on the request.

Certain documents that should be submitted to IRAS:

1. Confirmation letter that is declared from the foreign country. This letter is going to be used to prove that the tax is already collected at the foreign country. This situation may happen because all the business activities are done in that particular country. Because of that reason, the foreign country is responsible to get all taxes from the business activities. Therefore, people need to submit this confirmation letter to enjoy the tax exemption in this country. There is no double tax in any types of business activities. After people pay their tax for their foreign-business activities, they don’t have to pay another tax in Singapore.
2. Copy of the approval letter or tax incentive certificate from the foreign country. This is another important document that should be submitted to IRAS. When it is possible, people need to submit the dividend voucher. This voucher is going to state that the dividend can be exempted from tax in this country. Dividend can be used as an incentive for being involved in the business activities in foreign country. This document is very important in the case of the foreign-sourced dividend.

After reading this article, you will get a better understanding of how to get tax exemption in Singapore. There are some other information that you can read from IRAS in Singapore. You can refer to the e-Tax guide for IRAS at www.IRAS.gov.sg. This site is specially created to help all Singaporeans in paying tax for their business activities. All visitors can read all important information about Singapore tax in this site. Before you can enjoy the tax exemption for any foreign business activities, you have to report all details to IRAS Singapore.