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30 December 2008

                                   Issue

                                  06/2008

Dear Valued Clients,

Tan, Chan & Partners & D&I Corporate Services Pte Ltd hereby wishes you a Happy & Prosperous New Year!

In this sixth edition of our e-letter, we highlight changes of ACRA Filing Of Financial Statements in XBRL, the outline of Budget 2008 that may be of interest and your business, some update of issues relating to IRAS, CPF and other regulatory bodies compliance. There are also FRS update will take effect from 1.1.2009. The year ahead is going to be the toughest year in the history for most of companies. On the macro aspect, there is nothing much you can do, on company level, we should prepare to cut costs, pay attention to review cash flow position, cut down capital commitment that may not bring profits, tap assistance from government agencies if you need financing. Most importantly, be positive and do what are essentials to stay competitive.

Effective on or after January 2009,

- Slight changes in the presentation of financial statements as well as statement of changes in equity.

 

- Puttable Financial Instruments and Obligations Arising on Liquidation.

 

- The cost of an investment in a subsidiary, jointly controlled entity or associate.

 

- Reclassification of financial assets.

 

For a full range of details on all the FRSs, please visit the ASC website.

 

 

Cut in Corporate Income Tax (CIT)

Budget 2007 states that with effect YA2008, CIT is decreased to 18% and the Partial Tax Exemption threshold is increased from $100,000 to $300,000. More details can be found here.

 

Tax Deduction For Loan Cost

Interest on loans used to buy equipment that enhance profits is now tax deductible. From the 2008 tax year, other borrowing costs that are paid as a substitute for interest expense will be deductible for tax purposes as well. Click here for more details.

 

Benefits for All Companies

The concession permitting writing down allowances for acquired intellectual property has been extended from 31 October 2008 to 31 October 2013. The qualifying period for the investment allowance incentive has also been increased from five to eight years, for assets acquired on hire-purchase basis.  This is effective for assets purchased on hire-purchase terms from 15 February 2007.

 

Tax Exemption for Start-ups

Besides being tax exempted on the first $100,000 of chargeable income, start-ups can now enjoy another 50% tax exemption for the next $200,000 of the chargeable income. More information is available here.

 

DIVIDEND

Click here to see the differences between One-Tier Corporate Tax System and Imputation System.

 

Changes to Form C Filing deadline and installment payment of tax based on estimated chargeable income

 

 

CPF Changes and workfare

1)   To help the majority of Singaporeans save more for their future needs, the employer component of CPF contribution rates will be increased by 1.5% from 1 July 2007.

  • 1% will go into the worker’s Ordinary Account (OA) and 0.5% will go into the Medisave Account (MA).

  • This will not apply to older low-wage workers – those who earn $1,500 or less and are also above 35 years old.

 

2)   The budget debate in March 2007 concluded that from 1 January 2009, CPF members aged 55 years or older who sell their properties are required to refund the CPF moneys used in buying the properties to make up the Minimum Sum. This is to help members build up the Minimum Sum to meet their retirement needs. More details can be found available at the CPF Board website.

 

 

Implementation of SME Rebate Scheme

The SME Rebate Scheme is a 2-year assistance scheme to help locally registered SMEs adjust to rising business costs due to the increase in employer CPF contribution rate. Eligible firms will receive cash rebates pegged to their total employer and employee CPF contributions made over two years between 1 July 2007 and 30 June 2009.  More details on the scheme can be found here. Further details of the application process and eligibility may be downloaded here.

 

Compulsory Filing of Financial Statements with ACRA in XBRL And Financial Statements (“FS”) Manager

Singapore incorporated companies which are either unlimited or limited by shares will be required to file their financial statements in XBRL for the purposes of AGM and subsequently to file with ACRA with effect from 1 November 2007 only if the financial period concerned ends on or after 30 April 2007.

(A)       Incentives for All Companies to Do R&D

1.      Tax Deduction for R&D Expenditure (for all companies)

2.      R&D Allowance for All Companies (main benefit for SMEs)

3.      R&D Incentive for Start-Up Enterprises (RISE)

(B)       Enhancing Business Competitiveness For All Companies

1.      Tax Incentive for Fixtures and Fittings (main benefits for SMEs)

2.      Foreign Tax Credit for Foreign-Sourced Income

3.      Overseas Talent Recruitment Scheme

4.      Equity Remuneration Incentive Scheme (ERIS)[1]

(C)       Developing the Maritime Hub

1.      Enhancements to the Maritime Finance Incentive Scheme

2.      Tax Certainty on Treatment of Gains from Sale of Vessels

3.      Enhancing to Shipping Incentives

(D)       Tax Incentives to Support Start-Ups

1.         Start-Up Tax Exemption Scheme

(E)       General Tax Changes

1.         Tax Deduction for Portable Medical Expenses.

2.       Further tax deduction for talent relocation expenses

More information on this scheme is available here.

For more information from points (A) to (E), please see Budget 2008 – Benefits for Business.

(F)       Personal tax initiatives – Benefits For Individuals And

            Households

1.      Growth Dividends (GD)

2.      Course fee relief

3.      Not Ordinarily Resident (NOR) scheme

All benefits in-kind (except directors’ fees) will be eligible for the time-apportionment concession under the scheme with effect from YA 2009. Download “Not Ordinarily Resident (NOR) Scheme”

4.      Personal Income Tax (PIT) Rebates

5.      LIFE Bonus (L-Bonus)

6.      Encouraging Voluntary Savings

Further details on point (F) can be found in Budget 2008 – Benefits for Individuals and Households.

 

 

 

Zero GST For Containers

Servicing, sales and lease of airs and sea containers to both foreign and local customers (previously only to foreign customers) will now qualify for zero-rating of GST. This change has been effective from 1 April 2007. More details are available here.

 

GST Assistance Scheme for SME

This assistance scheme was launched in late February by SPRING Singapore to provide a grant for SMEs voluntarily registering for GST (capped at $5,000 per SME) to support up to 50% of GST registration-related costs, such as hardware, software, Internet connection and IT implementation consultancy and training. It is open to all Singapore-based SMEs who become voluntary GST registrants between 01 March 2007 and 31 March 2009. For further details, please log on to our website.

 

GST e-filing compulsory starting from September 2008

All Goods and Services Tax (GST) returns will have to be filed online by September 2008, but the deadline for large firms is even sooner.

From next January 2009, companies with annual turnover above $5 million will have to ditch paper forms and file on their computers.

For further details, please log on to our website.

 

 

Essentials for Business Seminar

This seminar organized by ACRA was held on 19 November 2008 to provide entrepreneurs and businesses alike with the knowledge, skills, inspiration and networks needed to build an innovative enterprise. The presentations of the seminar can be found here.

 

Basic Record Keeping Guide For Small Business

This guide was published to assist business in preparing businesses in preparing and keeping their records. The guidelines set out the minimum records required to be kept to comply with Singapore tax laws. You have to keep sufficient records to enable your business income to be readily determined. Please download “Basic Record Keeping Guide for Small Business” for more details.

 

 

We value feedback and welcome any enquiries.
You can reach us at Office Tel:+65 6533 7393

- Partner: Tan Chin Ren(Ext.129)

- Customer Service Division: Eileen (Ext.103)

- Corporate Secretarial Division: Peggy(Ext.115)

- Tax Enquires : Jason (Ext.123)

- Address: 26 Eng Hoon Street Singapore 169776

 
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