budget 2016 highlights & changes affecting companies ... · presentation by inland revenue...

© 2016 Inland Revenue Authority of Singapore. All Rights Reserved. 1

Budget 2016 Highlights & Changes Affecting

Companies (Seminar for Tax Agents)

Presentation by Inland Revenue Authority of Singapore For Tax Agent Seminars held in July 2016

Twitter.com/IRAS_SG Facebook.com/irassg www.iras.gov.sg


Agenda 1. Introduction of SingPass 2FA

2. Budget 2016 Highlights for Businesses

3. Assessing IRAS e-Services

4. e-Filing of Estimated Chargeable Income (ECI) & Income Tax Return (Form C-S/ Form C)

5. e-Filing for PIC Cash Payout

6. Other common e-Services for Companies

7. Tax Agent e-Services New!

8. Top Queries Received at Corporate Tax Frontline

9. Administrative Procedures to Objection and Appeal Process

10.IRAS’ Voluntary Disclosure Programme (VDP)

11.IRAS-Tax Agent Relationship

12.Question & Answer


Introduction of SingPass 2FA


What SingPass 2FA is about 2-step Verification (2FA) is an additional security feature implemented for government transactions involving sensitive data.

Taxpayers will need to verify their identity via a physical OneKey token or an SMS notification

From 5 Jul 2016, those who have not activated their 2FA will have a one-time grace period of 30 days upon first log-in

Please use this grace period to activate your 2FA

After the grace period, individuals who did not set up 2FA will not be able to access government e-Services, including myTax Portal to e-file CIT returns, PIC cash payouts etc

They will need to register for 2FA and wait up to seven to ten working days for a PIN mailer to activate 2FA

For enquiries on SingPass, please refer to www.singpass.gov.sg


For enquires on SingPass, you may call SingPass Helpdesk at +65 6643 0555


Budget 2016 Highlights for Businesses


Summary of Budget 2016 Changes

Tax Changes Summary

Expiry of PIC Scheme The PIC Scheme will lapse after YA 2018

Tapering PIC Cash Payout Rate

Cash Payout rate reduced from 60% to 40% for PIC qualifying expenditure incurred on or after 1 Aug 2016

Mandatory e-Filing of PIC Cash Payout Application

Mandatory e-Filing of PIC Cash Payout applications wef 1 Aug 2016

Mandatory e-Filing of Corporate Income Tax Returns

Mandatory e-Filing of CIT returns (including ECI, Form C-S/ C) in phased approach from YAs 2018 to 2020 • YA 2018: Coy with turnover > $10M in YA 2017 • YA 2019: Coy with turnover > $1M in YA 2018 • YA 2020: All companies

Corporate Income Tax rebate (YA 2018)

• Increase CIT rebate from 30% to 50% on corporate tax payable (except final withholding tax on income)

• Subject to cap of $20,000 each for YA 2016 and YA 2017


Mandatory e-Filing

• More cost effective delivery of public services

• Aligned with Smart Nation vision to harness technology to enhance productivity

• With the availability of e-Filing services, all companies can benefit from reduced compliance costs and productivity gains while enjoying the convenience of going paperless.

Objective

• Mandatory e-Filing of CIT returns (including ECI, Form C-S/ C) in phased approach from YAs 2018 to 2020 • YA 2018: Coy with turnover > $10M in YA 2017 • YA 2019: Coy with turnover > $1M in YA 2018 • YA 2020: All companies

• Mandatory e-Filing of PIC Cash Payout applications wef 1 Aug 2016

Budget Change


Enhancing the Corporate Income Tax Rebate

• To help companies especially Small and Medium Enterprises (“SMEs”) manage cost pressures in this period of restructuring

Objective

• Increase CIT rebate from 30% to 50% on corporate tax payable (except final withholding tax on income)

• Subject to cap of $20,000 each for YAs 2016 and 2017

Budget Change

Administratively: • Companies need not factor in the CIT Rebate when filing the Estimated Chargeable

Income and the Income Tax Return (Form C-S/ C) as IRAS will compute and allow it automatically.

• For companies who had earlier on filed their ECI for YA 2016 or 2017, the revised Notices of Assessment (NOAs) and refunds for excess tax paid on the affected ECIs have been issued to companies by 1st week of July 2016. If the company is paying the tax by instalments, the revised instalment plan will be issued to the company with the revised NOA.


Things to Note: Change in PIC Cash Payout Rate

Businesses who have incurred the qualifying expenditure before 1 Aug 2016 will still qualify for the 60% cash payout rate even if the PIC cash payout application was submitted on or after 1 Aug 2016 (but no later than the tax return filing due date for the relevant YA).

An expense is incurred when the legal liability to pay has arisen, regardless of the date of actual payment of the money.

Please refer to IRAS website for more examples on when an expenditure is considered as “incurred”.

https://www.iras.gov.sg/irashome/Schemes/Businesses/Productivity-and-Innovation-Credit-Scheme/Determining-the-dates-that-expenditure-is-incurred-for-PIC-cash-payout-purposes/


Category : Equipment Purchase Scenario : Payment made on purchase & invoice receipt date Invoice Terms : Cash on Delivery

Rationale The amount paid on 30 Jun 2016 is considered prepayment. The expenditure is considered incurred only when the equipment is delivered (i.e. on 30 Sep 2016), upon which the legal liability to pay arises

30 Jun 2016 30 Sep 2016

PIC Cash Payout Rate

40% Invoice Receipt

Purchase

Payment Delivery

1 Aug 2016

Common examples of when an expenditure is considered “incurred” for PIC Cash Payout

In all the examples, it is assumed that the business’ financial year ends on 31 Dec unless otherwise stated, and the business operations have already commenced unless otherwise stated


Category : Equipment Purchase Scenario : Hire Purchase

Rationale The expenditure conversion cap and cash payout rate to be applied are determined based on the YA relating to the period in which the HP agreement is signed (i.e. on 30 Jun 2016)

30 Jun 2016 30 Sep 2016

31 May 2016

HP Agreement Signed First Repayment

Deposit paid and Equipment

is delivered


60%

1 Aug 2016



Rationale The amount paid on 31 May 2016 is considered prepayment. The PIC cash payout conversion rate is 40% as expenditure is considered incurred only when the employees attend the training on 30 Sep 2016. For the purpose of claiming PIC benefits, the training course must be attended by an employee of the company, i.e. PIC benefits will not be granted if the employee(s) did not attend the training.

Category : Training Payment Terms : Full payment upon registration

31 May 2016 30 Sep 2016

Training Commenced/Conducted

Registration

Payment (in full)


40%

1 Aug 2016



Things to Note: Change in PIC Cash Payout Rate

Businesses submitting PIC cash payout applications on or after 1 Aug 2016, should clearly segregate their PIC qualifying expenditure into 2 categories:

(a) Expenditure incurred before 1 Aug 2016 – 60% rate

(b) Expenditure incurred on or after 1 Aug 2016 – 40% rate Please note that there is a maximum limit of 15 fields in the application form.

For claims with 15 items or less, you may submit a single PIC cash payout application form even if the incurred dates straddle 1 Aug 2016. The PIC e-Service will automatically compute the eligible cash payout rate

If you are filing for >15 items and the items straddle the 1 Aug date, please submit separate forms on two different dates


Accessing IRAS’ e-Services


Corporate Tax e-Services at mytax.iras.gov.sg

Type of e-Services Filing e-Services • File Estimated Chargeable Income (ECI)

• File Income Tax Return (Form C-S/ C, Dormant Company) • Section 45 (Withholding Tax) e-Services

Object to/ Revise Assessment

• Lodge an objection to the Notice of Assessment or make amendments to the ECI and/ or Form C-S/ C filed

Application e-Services • PIC Cash Payout

• Certificate of Residence (COR) • Waiver to Submit Income Tax Return by a Dormant

Company

Viewing Communications/ Status

• View Correspondence/ Notices • View Return Status • View Donations • View Research & Development Allowance Account • View Officer-in-Charge • View Document Identification Number (DIN)

Payment e-Services • Payment via internet banking

Update Corporate Profile/ Contacts & Alerts

• Update company’s particulars, contact details and financial year end


How to Access IRAS’ e-Services?

Company Administrator

e-Services Authorisation System (EASY)

Company Staff/ Tax Agent

Login to mytax.iras.gov.sg

Use e-Services

Access code* and SingPass/ IRAS Pin

Authorise

SingPass/ IRAS Pin

START!

*Access Code is a unique password issued and sent to company’s registered address shortly after its incorporation. Please request a new Access Code if you have misplaced your access code or its existing Access Code is no longer valid. The request form is available at IRAS website: www .iras.gov.sg > e-Services > Businesses > Companies > EASY

http://www.iras.gov.sg/



Online system that allows organisations to authorise their employees/third party to access e-Services on their behalf

All authorisations of staff and directors/ tax agent must be done at EASY

Taxpayer needs to log in to EASY using the company’s Access Code

Access Code application form

Log in using your individual SingPass OR IRAS Pin


Preparer

Approver IRAS

• A Preparer prepares the application/ form for submission to an Approver

• The Preparer does not have the rights to submit directly to IRAS

• An Approver will approve or edit, and submit the application/ form to IRAS

• The Approver can also prepare the application/ form and submit it to IRAS (for companies without the Preparer role)

e-Services Authorisation System (EASY) e-Services Authorisation System (EASY)


Filing Obligations Filing of Estimated Chargeable Income (ECI) Filing of Income Tax Return (Form C-S/ C)


e-Filing Estimated Chargeable Income (ECI)


Estimated Chargeable Income (ECI)

All companies are required to file an estimate of chargeable income (ECI) within 3 months after end of financial period E.g. Financial year ending 30 Jun 2016 ECI for YA 2017 must be filed by 30 Sep 2016

IRAS will issue ECI reminder letter in last month of financial year

Companies do not need to file ECI if: • Annual revenue is not more than $1 million; and • ECI* is nil

Companies that do not qualify for the above concession must file their ECI within 3 months after end of financial period, even if they do not receive the ECI reminder letter

* before deducting exempt amount under the partial tax exemption or tax exemption

scheme for new start-up companies


e-Filing of ECI Compulsory e-Filing will be implemented progressively from YA

2018 onwards. e-File by 26th of the month to enjoy more instalments* to pay your estimated tax

E.g. Company’s financial year ended on 30 Jun 2016

YA 2017 ECI filed by

e-Filers YA 2017 ECI filed by

Paper-Filers

26 Jul 10 24 Jul 5 26 Aug 8 24 Aug 4 26 Sep 6 24 Sep 3 After 26 Sep No instalments After 24 Sep No instalments

* A company must sign up for GIRO to enjoy paying its estimated tax by instalments. The first few instalments could be combined and deducted on the first GIRO deduction date, depending on the date of filing of ECI.

Corporate Tax Obligations


How to e-File ECI?

Log in to https://mytax.iras.gov.sg using your SingPass / IRAS Pin after you have been authorised by the company at EASY. 1

2

https://mytax.iras.gov.sg/


How to e-File ECI?


How to e-File ECI?

2

1 2017 ᵥ

2015 ᵥ

YA 2017 and YA 2017


How to e-File ECI?

4

3

Enter ECI to be taxed at 17% before deducting exempt amount.

2017

2015

ᵥ

ᵥ


How to e-File ECI?

2017

2015


How to e-File ECI?

2015

2017

03/12/2016 11:50:51


e-Filing of Income Tax Return


Income Tax Return (Form C-S/ C)

All companies have to file a tax return by 30 Nov of each year A NIL return is required Due date for filing tax return for YA 2016: 30 Nov 2016 No extension of time beyond 30 Nov 2016

Exception: If you e-File Form C-S/ C, the filing due date is extended until 15 Dec 2016


Income Tax Return

File Form C and Appendix on Additional Information on Income & Deductions (Form IRIN 301)

File Form C-S (Simplified Tax Filing for Small Companies) For companies that meet qualifying conditions

OR

Income Tax Return (Form C-S/ C)


Qualifying Conditions for Filing Form C-S

Company: Does not claim any of the following:

• Is incorporated in Singapore • Has an annual revenue* of

$1 million or below • Derives only income taxable

at 17%

• Carry-back of Current Year Capital Allowances/Losses

• Group Relief • Investment Allowance • Research & Development Tax

Allowance • Foreign Tax Credit and

Tax Deducted at Source

* Revenue refers to the main income source of the company excluding separate source income such as interest

Note: Companies that do not meet the conditions have to submit to IRAS a full set of tax return comprising the Form C, financial statements, tax computation and supporting schedules.


Form C-S is a shortened 3-page Income Tax Return for small companies

Not required to submit financial accounts, tax computation and supporting schedules with Form C-S but still need to prepare and submit to IRAS upon request

You can e-File Form C-S for YA 2016 via mytax.iras.gov.sg

e-Filing of Form C-S at mytax.iras.gov.sg


e-Filing of Form C Companies that do not meet the conditions for filing Form C-S have to submit Form C A complete set of Income Tax Return (Form C) consists of:

Form C Form IRIN 301 (Additional Information on Income & Deductions) Audited/ Unaudited financial statements Not required to be submitted if full set of financial statement

has been filed with ACRA in XBRL format Detailed profit and loss statement Tax computation and supporting schedules Relevant forms (e.g. group relief form, R&D claim form)


3 Modes of e-Filing of Form C Implemented 3 modes of filing:

Online Form C (similar to e-Form C-S)

Complete the Form C template online at mytax.iras.gov.sg Form C (Upload)

Download from IRAS’ website a softcopy of Form C (PDF version) onto your PC / laptop Complete it at your convenience Upload the completed Form C and relevant attachments at mytax.iras.gov.sg

External Value Network

Bulk submission by tax agent through a dedicated platform, which bypasses EASY


e-Filing of Form C (Upload) 1. Download Form C (Upload) (PDF

format) file from our website and complete it at your own time and convenience, in your local machine

2. Log in to www.mytax.iras.gov.sg (Ensure you are authorised via EASY system)

3. Upload these documents online

Form C (Upload)* tax computation audited/ unaudited financial statements detailed profit or loss statement other supporting documents

* Do not upload scanned copy of Form C

4. Click ‘Submit’

http://www.mytax.iras.gov.sg/


Failure to file Income Tax Return

Estimated assessment will be raised and/or Enforcement actions may be taken Summons issued to company and/or Director for failure to

file Income Tax Return

With effect from YA 2008, Section 94A(3) is enforceable on companies that do not file the Income Tax Return for any YA within 2 years from filing due date:

Penalty = Double the amount of tax that the Comptroller may, to the best of his judgment, assess to be payable by the taxpayer for that YA; and

Fine not exceeding $1,000


Common Mistakes on Form C/ C-S Completion and Deduction Claims


Common Mistakes to Avoid 1. PIC Claims

Claiming both PIC Cash Payout and base & enhanced allowance/ deduction on the same qualifying expenditure

Note: Cannot claim base and enhanced tax deduction/ allowance if already opted for cash payout on the same qualifying expenditure incurred

2. Section 14Q Deduction – Renovation & Refurbishment

Claim exceeds the expenditure cap of $300,000 for every relevant three-year period

Claim on non-qualifying R&R costs

Deferring claim for S14Q deduction

Balancing adjustment is computed in the year of disposal of R&R works


Common Mistakes to Avoid 3. Chargeable Income (“CI”) Before Exempt Amount/ After

Exempt Amount

Incorrectly declaring CI after exempt amount as CI before exempt amount in Form C

Results in double-claiming of tax exemption and lowering of tax payable amount

An illustration of a tax computation for YA 2016: Example - Partial Tax Exemption:

$ $ CI before exempt amount 11,700 Less: 1st $10,000 @75% 7,500 Next $1,700 @50% 850 ( 8,350)

CI after exempt amount 3,350

Tax @17% 569.50

Less: CIT rebate @50% 284.75

Tax payable 284.75


Common mistakes small companies make in their tax returns A. Illustration of a wrong declaration

$ 3,350

$ 3,350

B. Illustration of a correct declaration

$ 11,700

$ 11,700

Extracted from YA 2016 Form C


Common Mistakes to Avoid 4. Receipts Claimed as Not Taxable

Did not include ‘Receipts claimed as not taxable’ in Form C, e.g. disposal of properties, shares or other investments

Did not exclude tax exempt income from Box 26 above, e.g. one-tier exempt dividend



Common Mistakes to Avoid 5. Not Declaring Foreign Income Received in Singapore (Box

2a) when Claiming Foreign Tax Credit (Box 12) in Form C

Did not ensure that foreign income received in Singapore is declared in Box 2a instead of Box 1a



Basic Tax Calculator (BTC) BTC is an excel workbook that is intended to help companies/ tax agents prepare tax computations and supporting tax schedules

Includes explanatory notes and validation checks against common errors

Customisable BTC for Users

What functions do you want to

see in the BTC?

What do you like about the BTC?

Have you used the BTC

before?


e-Filing of PIC Cash Payout


How to e-File PIC Cash Payout 1. Log in to myTax Portal (https://mytax.iras.gov.sg)

2. Select My Organisation’s/Business’ Tax Matters or

My Client’s Tax Matters

3. Log in with your (a) SingPass or (b) IRAS PIN by clicking the

respective buttons

Compulsory from 1 Aug

2016

https://mytax.iras.gov.sg/


How to e-File PIC Cash Payout 1. Click Apply for PIC Cash Payout on the left-hand menu to start with the PIC

cash payout application Learn how to do a quick submission of your PIC cash payout application by viewing this PIC Cash Payout e-Submission Video

https://elearn.iras.gov.sg/iraslearning/web/courseware/viewCourse.aspx?cid=pic


Other common e-Services for Companies

e-Application for Certificate of Residence (COR)


e-Application for Certificate of Residence (COR)

How to Apply? • Employee or tax agent must first be authorised via EASY • Apply for a COR at mytax.iras.gov.sg • Can apply for current YA, next YA and prior YAs

When will I receive the COR?

• For e-Filing application, we will process the COR within 7 working days • COR will be sent to the company’s registered address

How to View COR?

• Softcopy of the COR will also be made available at mytax.iras.gov.sg



Other common e-Services for Companies



To View Corporate Profile/ Contacts & Alerts

• View the companies’ particulars and contact details (e.g. company’s status, registered office address, financial year end and telephone number) at mytax.iras.gov.sg

To Update Corporate Profile/ Contacts & Alerts

• Company’s staff or tax agent who have been authorised with an ‘Approver’ role can also update the company’s: contact details (i.e. name of contact person, telephone number and

email address), and financial year end

• The contact details and financial year end will be updated immediately upon successful submission


Tax Agent (TA) e-Services


Objectives of TA e-Services Current e-Services designed with taxpayers in mind and may not fully meet the needs of TAs

Lack summary overview of all clients – TAs need to enter individual client’s UENO number to check status/ correspondence

TAs call us on routine matters instead of self-help

TA e-Services will encourage TAs to self-help

Providing information from the perspective of a TA staff

Summary overview of the outstanding ECIs and Form C-S/ C of all clients the staff is authorised to view

Include recent notices/ correspondence sent by IRAS

Target Launch Date: Last Quarter of 2016


Highlights of TA e-Services

- Summary listing of the authorised TA staff’s clients

- Company dashboard which provides information on each client’s filing/ assessment status, Giro, financial year-end

- Overview of all clients’ filing/ assessment status for ECIs and Form C-S/ C

- Links to perform transactions to e-File ECI and Form C-S/ C

- Provides information on Last Completed Year of Assessment

- Viewing of latest Notices/ Correspondence/ myTax Mail


Preview of TA e-Services


Top Queries received at Corporate Tax Frontline


Q1. My client has ceased business and intends to apply for strike-off. What should I do? The company needs to apply to the Accounting and Corporate Regulatory Authority (ACRA) for strike-off. Please ensure that all of the following requirements are met: 1. All outstanding Income Tax Returns (Form C-S/ C) have been submitted. If

the company is filing Form C, the accounts and tax computations must also be submitted;

2. Financial statements and tax computations have been submitted up to the date of cessation of business (i.e. for the period(s) where IRAS has not yet issued an Income Tax Return);

3. All outstanding tax matters* have been settled with IRAS (e.g. answered all queries raised by IRAS, ensured all assessments are finalised and paid etc); and

4. GST registration has been cancelled and there are no outstanding GST matters

Please refer to IRAS’ website for more information on how to check if the company has any outstanding filing and tax liabilities.

Applying for Strike-Off

https://www.iras.gov.sg/irashome/Businesses/Companies/Managing-Taxes-for-Dormant-Companies-or-Companies-Closing-Down/Companies-Applying-for-Strike-off/-to-Cease-Registration/


Q1. My client has ceased business and intends to apply for strike-off. What should I do? (cont’d)

4. GST registration has been cancelled and there are no outstanding

GST matters *Please do not close the company's bank accounts until all outstanding matters are settled. Once the company's bank account is closed and there is a tax credit owing to the company, IRAS will not be able to pay over the tax credit to a third party (e.g. director, shareholder). When the company is dissolved, the tax credit due to the company will be paid over to the Insolvency and Public Trustee's Office (IPTO). The shareholders of the defunct company may approach IPTO if they wish to claim the tax credit.

Please refer to IRAS’ website for more information on how to check if the company has any outstanding filing and tax liabilities.

Applying for Strike-Off

https://www.iras.gov.sg/irashome/Businesses/Companies/Managing-Taxes-for-Dormant-Companies-or-Companies-Closing-Down/Companies-Applying-for-Strike-off/-to-Cease-Registration/


Q2. We are a newly incorporated company and would like to file our tax return in the year of incorporation. How should we obtain a copy of the return? New companies will receive the Form C-S/ C filing package only two years after its incorporation, as most new companies do not close their first set of accounts in the year of incorporation. However, if the company closes its first set of accounts in the year of incorporation and has commenced business or was in receipt of income, please submit a request for an income tax return filing package from IRAS by May of the year following the year of incorporation. The form “Request for Income Tax Return (Form C-S/ C) and Notification of New Financial Year End” can be obtained from IRAS’ website. Please note that IRAS will not be able to process the request over the phone/ email/ over the counter.

Requesting a copy of the Income Tax Return

https://www.iras.gov.sg/irashome/Quick-Links/Forms/Businesses/Corporate-Tax-forms/Form-C-S/


Q3. How do I obtain the Document Identification Number (DIN) for the purpose of completing the paper Form C-S/ C? A DIN is required only if the company is downloading a copy of the Form C-S/ C and submitting the paper form to IRAS. You can retrieve the DIN from the “View DIN” e-Service. Please note that IRAS do not accept request for DIN over the counter/phone/email. Should you require the DIN and it is not available from the “View DIN” e-Service, please submit the “Request for Income Tax Return (Form C-S/ C) and Notification of New Financial Year End” form.

Requesting for a Document Identification Number

https://mytax.iras.gov.sg/ESVWeb/default.aspx?target=PORDINSearch


Q4. Does website development cost qualify for PIC?

From YA 2014 to YA 2018, PIC benefits can be claimed on capital expenditure incurred on developing a website, including costs incurred for the one-time registration of a domain name for the website. The following are not PIC-qualifying website development costs: - Renewal of domain name - Online advertising / marketing services (e.g. Search Engine

Optimization (SEO),Search Engine Marketing (SEM), etc); - Routine updates; and - Maintenance and support services

*For other equipment, please use equipment search function our website. This database (non-exhaustive) will tell the business whether the equipment falls in/ our of the prescribed list, and whether it is a commonly approved equipment under the case-by-case route.

PIC

http://www.iras.gov.sg/irasHome/page04.aspx?id=16169


Q5. Does the cost to revamp a website qualify for PIC? The revamping of an existing website does not qualify for PIC as it is not provision of a new website. However, if there are costs incurred on addition of e-commerce functions to the website or enhancing it to become mobile responsive, these costs will be eligible for PIC.

Q6. Does web hosting fee qualify for PIC? Fees paid for web hosting services do not qualify for PIC benefits. However, if you are able to provide a breakdown of the web hosting fees, PIC benefits may be granted on costs incurred for the acquisition/ leasing of PIC IT and Automation Equipment such as software and server.

PIC


Q7. Will my client be able to claim PIC cash payout if the PIC IT and Automation equipment is not in use?

From YA 2016, to qualify for cash payout on PIC IT and Automation equipment, businesses will need to show that the equipment is in use by the business at the point when they elect for cash payout. This condition reinforces the objective of encouraging businesses to increase their productivity by using automation equipment in their businesses.

PIC


Q8. How is PIC cash payout being computed for equipment acquired on hire purchase?

For PIC IT and automation equipment acquired on hire purchase, the cash payout conversion rate to be applied is based on the date on which the HP agreement is signed. For example, the cash payout conversion rate for an equipment acquired via a HP agreement signed on 1 Jul 2016 is 60%. If the HP agreement is signed on 1 Aug 2016, the cash payout conversion rate will be 40%. The amount of cash payout for each YA will be computed based on the principal amount paid during the basis period for that YA, even if the repayment schedule extends beyond the period for the last qualifying YA (i.e. YA 2018). Please refer to IRAS’ website for examples on cash payout claims on equipment acquired on hire purchase.

PIC

https://www.iras.gov.sg/irashome/Schemes/Businesses/Productivity-and-Innovation-Credit-Scheme/Six-Qualifying-Activities-under-PIC/Acquisition-and-Leasing-of-PIC-IT-and-Automation-Equipment/%23title8


Q9. How do I apply for PIC Cash Payout on my client’s behalf? Q10. Has my client’s PIC cash payout application been processed? Q11. Could you send my client a copy of the PIC cash payout notice? With the new PIC cash payout e-Services, you can now log in to mytax.iras.gov.sg to help your client to: • “Apply for PIC Cash Payout” • “View PIC Cash Payout Application status” • “View PIC Cash Payout Correspondence/ Notices” Note: • To apply for PIC cash payout and view the application status, you must be

authorised for “PIC Cash Payout Matters”. • Firms that are already authorised for “Corporate Tax Matters” can access PIC

Cash Payout Correspondence/ Notices without being authorised for “PIC Cash Payout Matters”.

PIC Cash Payout Application Matters

https://mytax.iras.gov.sg/ESVWeb/default.aspx


Q12. What is the status of my client’s YA YYYY tax assessment?

You can check the status via: 1) mytax.iras.gov.sg “View Return Status”; or 2) 24-hr toll-free automated answering services (1800-3568622)

“Corporate Tax Integrated Phone System”: Assessment status (Option 1); Status of Form C or Form C-S & Accounts (Option 2);

For details, refer to the IRAS website. You can use these services to find out the submission and processing status of your client’s ECI and Form C-S/ C filed. (Note: You may also check the status of your client’s tax assessment via the Tax Agent e-Services, which will be launched in the last quarter of 2016)

Return/Assessment Status

https://mytax.iras.gov.sg/ESVWeb/default.aspx




Administrative Procedures to Objection and Appeal Process


Objection & Appeal (O&A) Process

1 • Objection

2 • Review

3 • Litigation

4 • Finalisation


Administrative Procedures to Objection & Appeal (O&A) Process

Assessment

Objection

Litigation (Income Tax Board of

Review /Courts)

Review

Agreement / Settlement Finalised

Assessment Tax Certainty

Judgment No Agreement



Objection Stage

Comptroller (CIT) issues a Notice of Assessment (NOA)

Usually accompanied by a tax computation or letter to explain tax adjustments made

If taxpayer agrees with NOA - no action is needed

If taxpayer disagrees with NOA - file objection

Note: Whether or not objecting to NOA, payment of tax must be made within 1 month from date of NOA



Objecting to an assessment Limitation of right to object to an Amended Assessment [section 76(2A) of Income Tax Act] Ensure finalisation of assessment

Section 76(2A): If the objection is made to any assessment, being one which:

(a) is made on or after the date the Income Tax (Amendment) Act 2011 is published in the Gazette; and

(b) amends a previous assessment in any particular, then a person’s right to object to the assessment is limited to a right to object against the assessment in respect of, or matters relating to, that particular.



Filing an Objection: Taxpayer must file within 2 months from the date of NOA (administrative concession)

NOA will indicate the 2-month objection deadline



Objection Stage An objection should provide the following details:

Year of Assessment

Description of the item(s) under objection

Amount of income/deduction for each item under objection

Reason to explain why deduction/ allowance/ relief ought to be allowed

Reason why income should not be subject to tax

Supporting documents Note: CIT may request revised income tax computation as it will help expedite the

review process



Filing an Objection

Acknowledgement of an Objection via:

e-Objection at mytax.iras.gov.sg Recommended! – Instant acknowledgement

Objection Form – acknowledgement within 14 days from date of receipt of Objection Form (screenshots of the form are available in the Annex)

Letter – no acknowledgement will be issued

Note: Both e-objection & Objection Form include a list of questions which assists taxpayer to ascertain whether an objection filed is valid or otherwise Taxpayers/ Tax agents are encouraged to file objections via e-Objection or Objection Form



Review Stage

CIT - to review taxpayer’s objection and convey its decision on the tax issue under dispute within 6 months from the date of receipt of complete information from TP

Taxpayer - has 3 months from the date of CIT’s letter to decide whether to accept CIT’s position (re: decision on tax issue under dispute)



Review Stage

To ensure closure of an objection, Notice of Refusal to Amend (IR 23) will be issued when: Taxpayer does not reply to CIT’s decision on the tax issue

under dispute

Taxpayer’s agreement to CIT’s decision is qualified

Taxpayer does not provide information after 2 years from date of receipt of objection

Note: CIT has adequate guidelines/ internal procedures to ensure Notice of Refusal to Amend are issued judiciously (eg. reminders will be sent to taxpayer before issuing the Notice of Refusal to Amend)



Litigation Stage Once Notice of Refusal to Amend (IR 23) is issued, taxpayer has the option to: Drop the objection

Pursue objection at: Income Tax Board of Review (ITBR) High Court Court of Appeal

(in specified order)

Taxpayer must lodge the Notice of Appeal within 30 days from the date of IR 23 should he wish to appeal to ITBR.



Finalisation Stage

Assessment is final and conclusive when: Assessment has been made and agreed by taxpayer

No valid objection is filed within the statutory time limit or

such extension of time allowed

No Notice of Appeal has been filed with Income Tax Board of Review or High Court, as the case may be, within the statutory time limit

An assessment has been determined on appeal


Administrative Procedures to Objection & Appeal (O&A) Process Key Points to Note

• 2 months from date of NOA Extended Objection deadline

• Issued for objections filed via e-Objection or Objection Form Acknowledgement

• Within 6 months from date of receipt of complete information (exception: complex cases)

CIT’s response

• Within 3 months from date of CIT’s letter (re: decision on tax issue under dispute)

Taxpayer’s response

• Issued under specific circumstances • CIT will send a final reminder to taxpayer before

issuing Notice of Refusal to Amend

Notice of Refusal to Amend (IR 23)


What to do if you Discover Errors in the Tax Declaration:

IRAS’ Voluntary Disclosure

Programme (VDP)


IRAS Voluntary Disclosure Programme (VDP)

• Aims to encourage taxpayers that have made errors in their tax returns to voluntarily come forward to correct their errors and set their tax matters right, in exchange for reduced penalties

• Applicable to - Individual Income Tax - Corporate Income Tax - Goods and Services Tax (GST) - Withholding Tax - Stamp Duty

Overview of VDP

• Voluntary disclosure must be timely, accurate, complete and self-initiated by taxpayer;

• Cooperate fully with IRAS to correct the errors made; and

• Pay or make arrangements with IRAS to pay additional taxes and penalties imposed (if any), and honour such arrangements till all payments are made.

Qualifying Conditions


IRAS Voluntary Disclosure Programme (VDP)

Reduced Penalties

Voluntary Disclosure Made

Penalty Treatment

Within 1 year from statutory filing date

No penalty imposed

> 1 year from statutory filing date

Reduced penalty of: • 5% p.a. for Income Tax* • Flat 5% for GST and

Withholding Tax

* For Income Tax, reduced penalty is 5% of tax undercharged for each year that income was late in being brought to tax.

Stamp Duty: For a voluntary disclosure pertaining to late stamping or underpayment of Stamp Duty that meets the qualifying conditions under IRAS' Voluntary Disclosure Programme, the reduced penalty is 5% p.a. computed on a daily basis on the stamp duty payable. There is no grace period applicable to Stamp Duty.

Refer to IRAS website for more information on VDP: Home > Businesses > Companies > Getting it Right > Voluntary Disclosure of Errors for Reduced Penalties

https://www.iras.gov.sg/irashome/Businesses/Companies/Getting-it-right/Voluntary-Disclosure-of-Errors-for-Reduced-Penalties/


IRAS-Tax Agent Relationship


IRAS-Tax Agent Relationship • Tax agents are our partners in the administration of the

Singapore tax system and in facilitating tax compliance • Play an important role in ensuring companies are

prepared for compulsory e-Filing of CIT returns • Come on board early and start e-Filing!

Partnership

• To have sound and effective tax policies that help taxpayers grow their business and wealth

• To encourage maximum voluntary compliance

Common Goals

• IRAS disseminates latest information via email updates regularly

• Complete a simple form “Profile of Tax Agents” to include yourself in our database

• Form will also include details that will help us understand your specific profile and needs better

Understand & Communicate

Send the completed “Profile of Tax Agents” form to us via: • Fax: 63514360 or • Email: [email protected]. Refer to IRAS website for more information: Home > Quick Links > Tax Agents > IRAS-Tax Agent Relationship > Enhanced IRAS-Tax Agent Relationship

https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/About_Us/Profile%20of%20Tax%20Agent.pdf

https://www.iras.gov.sg/IRASHome/Quick-Links/Tax-Agents/IRAS-Tax-Agent-Relationship/


Assistance and Service Channels

Website www.iras.gov.sg

• [email protected] for general tax matters • [email protected] for payment matters • For Productivity and Innovation Credit matters: • For companies:

• [email protected] • For self-employed/partnership:

• [email protected]

Email

• For companies: 1800-356-8622 • 8.00am to 5.00pm from Mondays to Fridays • Best time to call: 8.30am – 10.30am • Best day to call: Friday

Helpline

• Home > Businesses > Companies • Home > News & Events > Budget 2016 – Overview

of Tax Changes

Email


Please complete our online Feedback Form here after the seminar: https://www.iras.gov.sg/irashome/Feedback/Corporate-Tax-Seminar-For-Tax-Agents/

Your feedback will assist us in planning and organising our future seminars.

This information aims to provide a better general understanding of IRAS’ practices and is not intended to comprehensively address all possible tax issues that may arise. This information is correct as 14 July 2016. While every effort has been made to ensure that this information is consistent with existing law and practice, should there be any changes, IRAS reserves the right to vary our position accordingly.

https://www.iras.gov.sg/irashome/Feedback/Corporate-Tax-Seminar-For-Tax-Agents/

https://www.iras.gov.sg/irashome/Feedback/Corporate-Tax-Seminar-For-Tax-Agents/


Annexes


(1) Points to Note When e-Filing


Points to Note When e-Filing

Filing Deadline • Extended filing deadline of 15 Dec, instead of 30 Nov

when you e-File Form C-S/C

Online Help • Click on the iHelp icon < >; or • Click on " Ask IRAS" at the top of the page

Save Draft Facility • If you are not able to complete your filing in one

session, please save the Form C-S/C as ‘draft’ and access it anytime till 15 Dec

• The draft will be retained in myTax Portal up to 15 Dec

i

https://www.iras.gov.sg/askiras/CustomerPages/IRAS/askIras.aspx



Timeout

• The session will expire if you leave it idle for more than 20 minutes

• You will be required to log in to mytax.iras.gov.sg again if the session expire

New Companies Filing First Tax Return • If the company’s first set of financial accounts covers a

period of more than 12 months from its date of incorporation, please indicate “Yes” in the “For Newly Incorporated Companies filing its first Tax Return” section of General Information

• You will need to attribute the company’s adjusted profit/ losses to two YAs and complete the fields required for two YAs as the basis period for each YA should generally not exceed 12 months



Acknowledgement of Successful e-Filing

• Upon successful e-Filing, you will receive an instant acknowledgement of receipt

• The same acknowledgement will also be available at mytax.iras.gov.sg


(2) e-Filing of Witholding Tax (S45)


Logon to MyTax Portal

Select Withholding Tax

2 1 Complete Withholding Tax Form

Submit for Approval (if you are the Preparer)

Approver to logon to MyTax Portal for approving

3

5 4

Print Consolidated Statement

Submit to IRAS

Print Acknowledgement page

6

7 8

Complete your e-Filing in

8 Easy Steps

Withholding tax must be e-Filed 1. Overview for e-Filing of Withholding tax


BENEFITS Paper filing (before 1 Jul 2016)

E-Filing (Compulsory)

Faster and More Convenient

Mail the completed paper form and reach IRAS by

the due date

Free! Instant submission

24/7

Receive confirmation that you have filed

No Yes, there is instant acknowledgement after

submission of form

Improve filing accuracy

No Yes, there are validation checks to ensure

completeness and accuracy

Faster Confirmation of Payment

Issued within 21days after the payment is receipted

Issued within 7 days after the payment is receipted

More Payment Modes Cheque and electronic payments (Telegraphic

Transfer)

GIRO, Cheque, electronic payments (e.g. Internet

Banking, Telegraphic Transfer for overseas payments)

Withholding tax must be e-Filed 2. Benefits of e-Filing


Withholding tax must be e-Filed 3. Contact Modes

Contact Mode Contact Details

S45 Helpline 6356-7012: Select option 6 to speak to an

officer and tax type option 5.

Email [email protected]

In Person Visit Taxpayer Service Centre. E-filing assistance is provided at the atrium.

Website www.iras.gov.sg > e-Services > Others > Withholding Tax

mailto:[email protected]

http://www.iras.gov.sg/

budget 2016 highlights & changes affecting companies ... · presentation by inland revenue...

Documents