Globally, Tax Matters are usually very sensitive topics and the situation is no different from here in Singapore. Issues like who is required to file personal income tax, the need to file personal income tax, what to prepare before filing personal income tax return etc, usually arises and sometimes could be a difficult nut to crack. To save you the trouble, we have compiled all the necessary things you need to know about Personal Income Tax with emphasis in Singapore.
Who Needs to File Personal Income Tax Return
Just as the name implies, Personal Income Tax Return is obligatory for individual residents in Singapore. This is done on the basis of progressive resident tax rate as listed below. However, it is important to note that filing for Personal Income Tax Return becomes mandatory only if your annual income is S$22,000 and more. For business owner, the filing obligation is $6,000 net business income. However, you may still have to file a tax return if you were notified by The Singapore Tax Authority to submit personal tax return.
Why You Need to File Personal Income Tax Return
In Singapore, Personal Income Tax is established on a progressive structure and the country has one of the lowest rates in the world. For you to determine your tax status, you need to know your tax residency and the amount of chargeable income, then apply the progressive resident tax on it. Singapore progressive tax starts at 0% and ends at 22% above S$ 320,000. Individuals are only taxed on income they earned in Singapore and there is no capital or inheritance tax.
Tax rules may differ in accordance with the tax residency of each individual and the due date for tax filing is on the 15th April on any given year, or 18th April for e-filing tax payer.
What to Prepare before Filing Personal Income Tax Return
The basic requirement is Form IR8A from your employer, statement of profit and loss for business owner and partnership. We do provide this particular service of preparing such documents for our clients based on request. So, you can get in touch with us if you require tax services.
When is The Due Date to File Personal Income Tax Return
As stated earlier, the due date for personal tax is 15th and 18th April every year. However, for bulk extension; you may have until 30th June if a tax agent is already engaged. IRAS will allow one common bulk extension date of 30th June for all tax agents to file your clients’ individual income tax returns. The bulk extension must be done before 31st March every year; hence the engagement of tax agent must be done before that.
Need more time to prepare your individual tax return? Engage a tax agent before 31 March every year as IRAS will allow one common bulk extension date until 30th June for all tax agents to file their clients’ individual tax returns instead of 15th April or 18th April for e-filing tax payer, subject to IRAS approval.
Where to Look for Such Information and How to Ensure that They are Correct
IRAS website is the reliable and informative but may appear quite complex for the average tax payer to completely go through the whole website and process. Another reason is due to the fact that the website sometimes does include abstract information that is applicable to certain tax payers.
How to Submit Personal Taxes in Singapore
If you are working for a company, you most probably need not worry about reporting income tax as long as your company is included in the auto inclusion scheme. The submission will be submitted on your behalf by your company. However, the most convenient and efficient way to go about the whole submission is to engage a tax agent for proper guidance. We have a personal tax checklist for those who may need tax assistance. Our clients are usually expats or sole proprietors who are not very sure of the rules and regulations. Therefore, if you have such needs, simply get the checklist and fill it up and we could take it from there and offer you further assistance.
Below are the example groups of individuals or sole proprietors who may find our services vital:
- Individuals who earning more than one source of income (required to declare ALL income in your income tax return including employment income and other business/ rental income)
- Commission agent (e.g. insurance agent, real estate agent)
- Direct seller
- Freelancer (e.g. if you receive fees for providing services as a deejay, singer, dancer, fitness instructor, consultant)
- Hawker (you are the owner of a business or a food stall)
- Owner of a business that buys and sells goods and/ or services
- Owner of an online business (I.e. you buy and sell goods or provide services through the Internet)
- Owner of your own practice (e.g. accountant, architect, doctor, lawyer)
- Taxi driver
- Private tuition teacher (teachers who seek their own students of through agencies and do not receive a salary from a tuition centre)
On a general perspective, many of the businesses listed above may not declare their income received since they are not aware of this source of income is subjected to tax in Singapore.
For expatriates, Non-odinary Resident (NOR) Scheme is the most common and recommended scheme for them once they are able to fulfill certain conditions.
At OA International, we help tax payers to revise prior year’s assessment in situations whereby they forget to include business income or are entitled to some tax reliefs but failed to claim it. In such situations, they could revise their assessment for up to 4 years back. We can advise them accordingly as to the correct tax reliefs they are entitled to claim.
To learn more about how we are able to assist you, you are welcomed to speak to our tax person in-charge Yik Xin who is an ATP (income tax) at +65 6914 1111, Extension: 311 and / or drop us an email at firstname.lastname@example.org.