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| 9 September 2009 |
Issue 07/2009 |
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Dear Valued Clients | |
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In this seventh edition of our e-Newsletter, we would like to highlight Singapore's 2009 Budget, focusing primarily on FRS and Businesses Tax Regulations updates. The changes on Accounting Standards are crucial as they will have a direct impact on your business's cash flows and operations. We have also included the recent update on ACRA's service - Limited Partnership (LP). Please be reminded that it is a legal requirements for directors of every company to present financial statements that comply with FRS, and failure of which, a fine will be imposed. We hope our highlight would alert you to prepare and alleviate your business accordingly so that it will emerge with strength as the global economy recovers. | |
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Effective on or after January 2009, FRS 1: Presentation of Financial Statements (March 2008) - Slight changes in the presentation of financial statements as well as statement of changes in equity.
FRS 23: Borrowing Costs (July 2007) - Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset. Other borrowing costs are recognised as an expense.
FRS 27 Consolidated and Separate Financial Statements (June 2009)
FRS 32 Financial Instruments: Presentation and FRS 1: Presentation of Financial Statements (August 2008) - Puttable Financial Instruments and Obligations Arising on Liquidation.
FRS 101 First-Time Adoption of Financial Reporting Standards (June 2009)
FRS 103 Business Combinations (June 2009) - Scope expanded to include mutual entities and business combinations achieved by contract
Amendments to FRS 107 Financial Instruments: Disclosures (April 2009) - Improving Disclosures about Financial Instruments
Amendments to INT FRS 109 and FRS 39 (April 2009) - Embedded Derivatives
For a full range of details on all the FRSs, please visit the ASC website.
Reminder Under Section 201(1A) of the Companies Act, directors of every company are required to present financial statements that comply with FRS. Failure of which, a director would be liable upon conviction to a fine of up to $50,000 [Section 204(1)]. Auditors are similarly required to state in their Auditor's report whether the accounts comply with the FRS.
Companies may apply for exemption from compliance with FRS under Section 201(14) and Section 202.
For details information, click here.
The ACRA launched Limited Partnership (LP) with effect from 4 May 2009. Limited Partnership (LP) is a new vehicle for doing business in Singapore to give potential entrepreneurs another option as well as to attract foreign investment. It is a partnership consisting of a minimum of two partners, with at least one general partner and one limited partner, no maximum limit. An LP does not have a separate legal entity from the partners, i.e. it cannot sue or be sued or own property in its own name. For details information, http://www.acra.gov.sg/Services/LP/.
Changes to the GST treatment of aircraft and air craft related supplies
Recovery of GST for qualifying funds
GST e-filing compulsory starting from September 2008
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.
Basic Record Keeping Guide For Small Business
- Agency for enterprise development
- For government loans/grants, click here. |
Cut in Corporate Income Tax (CIT) With effect YA2010, CIT is decreased to 17%. More details can be found here.
Jobs Credit The jobs credit scheme is introduce to encourage businesses to preserve jobs in the downturn. The Jobs credit scheme is automatically granted to eligible employers and computed based on CPF contribution data. More details can be found here.
Enhancement of Carry-Back Relief for YA 2009 & YA 2010 Unutilised trade losses and capital allowance for YA 2009 & YA 2010 can be carried back to set off against Assessable Income of 3 immediately preceding YAs up to a limit of $200,000.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.
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.
Enhancement of Tax Deduction for Capital Expenditure Incurred on Renovation or Refurbishment Works. Extension of the Tax Exemption Scheme for New Start-up Companies to Companies limited by Guarantee Tax Framework for facilitating Corporate Amalgamations Enhancement of Capital Allowance Granted in respect of Plant or Machinery Acquired for YA 2010 & 2011 Accelerated Writing - Down Allowance for Acquisition of Intellectual Property for Media & Digital Entertainment Content Extension & Enhancement of Withholding Tax Exemption for Maritime Industry Enhancement of Fund Management Incentive Scheme Enhancement of the List of Specified Income and Designated Investment for Certain Tax Incentive Schemes Review and enhancement to current FSI-HQ Scheme
Extension and Enhancement for the Commodity Derivatives Trading(CDT) Scheme Extension of Tax Deduction for Provisions Made under MAS Notices
Tax Exemption of Foreign-Sourced Income Received in Singapore
Enhancement of tax deduction on donation
Personal Income Tax Rebate For Resident Individual
Flexible GIRO arrangements Taxpayers can approach IRAS to re-work their GIRO instalment plans (up to a max. of 24-month instalments) for tax assessed in YA 2009.
Removal of Income Tax on Net Annual Value Income Tax on net annual value of all residential properties will be removed from YA 2010.
Tax Exemption of Foreign-Sourced Income Received in Singapore
Enhancement of tax deduction on donation
40% Property tax rebate for Owner-Occupied Residential Properties
40% Property tax rebate for Commercial & Industrial Properties
Property Tax Deferral for Land Approved For Development for Businesses
Deferment of Increase in Assessment Rate For Hotel Rooms
We value feedback and welcome any enquiries. - Partner: Tan Chin Ren(Ext.129) - Manager: Sharifa (Ext: 105) - Customer Service Division: Eileen (Ext.103) - Corporate Secretarial Division: Peggy(Ext.115) - Tax Enquires : Jason (Ext.123) - Email : info@tanchan-cpa.com - Address: 26 Eng Hoon Street Singapore 169776
"A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty" |
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