Informative Posts

Benefiting from Incorporating Offshore Companies in Singapore

By on Nov 30, 2014 in Informative Posts | 0 comments

Singapore is known to be one of the Asian Tigers because of its strategic location and the government has remarkable laws regarding local and foreign businesses. It has major local and international banks, hundreds of businesses and thousands of expats. Singapore is considered as the fourth largest foreign exchange trading region. It has the busiest port in the world. Its official spoken languages are Mandarin, Malay, Tamili, and English. If you have landed on this page, you are probably a business man who wants to expand your company. You may have heard about the clear business policies and its taxation laws of Singapore. Specifically, you may have heard about their law on incorporating offshore companies in Singapore. The following are basic reasons for incorporating offshore companies in Singapore: The government of Singapore offers simple and open tax liability. The government has implemented attractive corporate and personal income tax rate, plenty of tax incentives and relief procedures that business can apply for, and there is no capital gains tax and dividend tax. Since Singapore is following territorial taxation system, taxes are applied to earnings that are accumulated or sourced in Singapore, or a foreign-based earning which is received in Singapore. This foreign-based revenue which is received in Singapore and meets the qualifying requirements is free from taxes. The government is following a single-tier tax system. This means that if the revenue is taxed at the company-level, the dividends may be allocated to the shareholders free of taxes. Hence, the company income tax rate is about 8.5% for income up to S$300,000. It offers flat 17% for company income beyond S$300,000. For new incorporated corporations, they will enjoy zero percent tax rate for the first S$100,000 taxable income for the first three tax filing years as long as the business has maximum of 20 shareholders and at least one of them owned 10% of the total shareholding. You will earn credible business reputation. Offshore company incorporated in Singapore gains credibility in business transactions particularly among stakeholders, bankers, professionals, and employees. The government offers simple, clear, and easy offshore company incorporation policy. Singapore is known to be the easiest country to establish business. It offers efficient, fast and simple registration of company....

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How to Set Up your Business in Singapore

By on Nov 20, 2014 in Informative Posts | 0 comments

As you have landed on this page, you may be looking for some useful tips for starting and setting up a business venture in Singapore. Among other reasons, more and more companies and professional individuals have chosen Singapore to set up their businesses or even expand their companies in Singapore. Popular reasons for choosing Singapore are as follows: Singapore offers unrestrictive business opportunities Singapore has advanced systems and facilities conducive for business transactions and activities Singapore provides flexible and easy immigration system and policy Singapore offers simple and easy system for setting up your company and business Singapore is known as having the most favorable tax rates and tax incentives in Asia Singapore has diversity pools of skilled and professional human resources Singapore offers intellectual property rights protection Singapore is known for its high quality of life in Asia Setting up your company in Singapore If you are seriously considering establishing your company or business in Singapore, you have to know the basic information, such as: All companies or businesses should be registered with Accounting & Corporate Regulatory Authority or ACRA; this applies to any person or corporation or company with business in other countries A foreign company who is interested in setting up a branch in Singapore has to appoint two local agents to act on their behalf; they must be legal residents in Singapore, foreigners with employment or dependent passes from the government You need to get special licenses if your business involves insurance, banking, stock broking, and manufacturing of cigars and firecrackers. To register your business in Singapore, you do not have to be a Singaporean. You just need to send application to get the Employment Pass. There are reliable agencies or consultants who can assist you to get this Employment Pass. They can even help you register your company in Singapore. In Singapore, you will undergo three major steps to register your company: Pre-Registration, Registration, and Post-Registration. Pre-Registration involves providing the government with the fundamental information about your company, such as Name of your Business/Company Company Directors: there should be a minimum of one resident director who is a resident or citizen of Singapore, or an individual with Entrepass, or Employment Pass, or Dependent Pass;...

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GST-Registered Company in Singapore: What is it?

By on Nov 12, 2014 in Informative Posts | 0 comments

Goods and Services Tax or GST is known to other countries as Value-Added Tax or VAT. This form of tax policy was put into effect in 1994, and therefore, it is relatively new in Singapore. This GST Act is inspired on UK legislation on VAT and GST law on GST. How does it work? Being GST registered company, you need to collect GST from your customers for the goods and services you provide and remit the tax collected to tax authority. As an example, the customer buys goods worth S$150, you have to invoice that customer S$160.50, which means S$150 for goods or services and additional 7% or S$10.5 is for GST. The 7% tax collected from the customers must be paid to the Singapore tax authorities every quarter through GST tax filing. Since GST is a self-assessed tax, therefore, all businesses have to keep on evaluating their need to register. GST registration can be either compulsory registration or voluntary registration. Compulsory Registration There is a need to register for GST if : Your company’s taxable supplies exceeds S$1 million for 12 months, which is known as “retrospective basis OR.” You are presently earning and expecting taxable supplies to reach more than S$1 million for the next twelve months, which is known as “prospective basis.” If you fail to register your business for GST, you will be sanctioned to certain penalties. Anti-avoidance schemes have been established by the government to make sure that this is strictly adhered to. Voluntary Registration You may apply to register for GST on a voluntary basis if Your yearly income does not exceed S$1 million, or You are exporting goods outside of Singapore (zero-rate supplies), or You are providing services outside Singapore which met the definition of an international services. If you are registered on voluntary basis, you have to remain registered for about two years and keep all your records for five years, even when you have ended your registration to GST. You are also required to adhere to other conditions that may be imposed by IRAS. Exemption from GST Registration If you are making exempt supplies, you may apply for exemption from GST registration, even if your revenue reach the threshold of...

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Mistakes in Filing GST Returns Companies Should Avoid

By on Oct 15, 2014 in Informative Posts | 0 comments

Goods and Services Tax or commonly known as GST is one of the leading contributors to tax revenues in Singapore. For 2009/2010, GST total amount collected was $6.9 billion and another $154 M in taxes and penalties through GST audit by the IRAS or Inland Revenue Authority of Singapore. Tax penalties may hurt your business especially when you know that you could have avoided these errors. Here are some common errors that companies make in filing GST returns: Omission of festive gifts such as moon cakes and bouquets, dinner & dance prizes, free use of the assets of company for personal purposes; Charging GST at standard rate of 7% to the local consumers when services rendered could have been zero-rated; GST claims on the invoice of the customer in foreign currency based on in-house exchange rate; Exclusion of the 7% on the disposal of fixed assets or trade-in of assets in Singapore; Charging international consumers zero-rate GST when the services rendered could have been standard-rated; Reporting of taxable supplies without supporting export documents for samples, items returned, international repair and loan of equipment, consignment, etc as zero-rated items in GST returns; Increasing taxable purchases by 7% just to attain the GST input-tax amount; Absence of attribution of input tax incurred for exemption of items/supplies or non-business events/activities. The best way to avoid penalties due to errors in filing of GST tax returns, the company should adhere religiously to regulations set by the government. The government is willing to assist companies and businessmen registered in GST in providing them with information regarding the filing of GST returns. In Corpworldbiz, we help our clients in filing GST returns. Should you have any queries in regards to GST, feel free to contact us...

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Mistake Corporate Accountants Make That You Should Know

By on Oct 14, 2014 in Informative Posts | 0 comments

Accounting plays an important role in any business. Well-developed accounting system and policies may denote that the financial components of your business are in place. Equally important is the Accountant who is responsible to administer the policies and the system accordingly. A tangible indication that your Accounting system and policies are in place is that records and documents are kept and transactions are well documented. So that when audit comes, these records and documents are ready. And when it is time for filing tax returns, it is less stressful since everything is well-documented and tax regulations are adhered to. However, there are common mistakes that Accountants may make that you, as the business owner, should know. Even if you have the best Accountant in town, you still have to be on top of your business. Knowing these mistakes will give you lesser headaches to handle later on: Wrong balance in Asset and Liability Sheet – The asset records must contain debit balances and liability accounts must have credit balances. The usual errors for having wrong balances are writing entries to wrong accounts, or misclassifying accounts, or duplicating entries. Examine your Balance Sheet monthly and be sure that assets and liabilities have the right balances. In cases where there is an account with wrong balance, check the details of the account to identify the error. Error in recording transactions in a prior period – It’s a rule of thumb that when you close your books for the fiscal year, you should not re-open the books and correct them. However, there are some Accounting apps that permit you to correct errors you have made but basically these are not allowed. The best thing to do is to review and check with your Accountant’s recorded transactions in a prior period and be sure that the errors are corrected in current fiscal year before officially closing the books. You can also randomly check your prior period Balance Sheet to ensure that there are no changes and alterations. If there are, then you have to investigate. Wrong Balance in Revenue or Expense Balance – Revenue records should have credit balances and expense accounts should contain debit balances. Errors occur when staff posts entries to...

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Common mistakes in filing tax return

By on Oct 13, 2014 in Informative Posts | 0 comments

Famous quotes suggest it is better to do things right the first time. It is more time-consuming and costly to do back jobs or fixing errors. IRAS observed common mistakes that companies make in filing tax returns and as a response, they educate companies on the significance of adherence to tax policies and how to properly file tax returns. IRAS may impose penalties according to the provisions in the Singapore Income Tax Act if these companies that do not adhere to tax policies. Take note of the following common mistakes that companies make in filing tax returns: Understatement of Company Income – To avoid penalties, companies must properly account and report all its income and appropriate invoices for products/good that have been sold or services that have been provided. Official receipts must be supported by correct invoicing and must be recorded while preparing their accounts. Any omission or error of any receipt or invoice issued which results to understatement of earning are punishable under the Law. Declaration of Deduction Against Non-Deductible Expenses – All expenses or costs that are not related to the business like personal expenses of the company director on entertainment or vacation, must properly be classified as private expenses and should not be included in the Form c/Form C-S claims. Excluded also are the vehicle expenses such as insurance, repair and maintenance, parking fees, ERP fees, petrol, and the like of private In-plate cars with non Q-plate cars and business service vehicles with Q-plate cars. Other personal deductions of the company’s directors and shareholders that are not allowed are stipulated in Section 1 of Singapore Income Tax Act are as follows: Travelling expenses with families during holidays or special events, and the like; Parties, social gatherings ad celebrations, meals, and the like; Gifts for families and relatives, for self, for friends, and the like; Personal and family’s credit card expenses; Domestic and residence’s telephone bills, family member’s telephone bills, utility bills, internet bills, and the like; Domestic or residence’s renovation expenses, maintenance and repair expenses, monthly or quarterly contributions to sinking funds, mortgage loan interests, property tax, and the like; Domestic helper’s salaries and levy; Domestic or household purchases like electrical appliances, groceries, furniture and fittings,...

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