AGaranziaLLP

Frequently Asked Questions (FAQ)

TAX SERVICES

Individuals


When do I need to file my individual income tax? And how to file my tax?

Filing of tax return is an annual obligation for every taxpayer; you may file your tax return using e-filing (usual deadline is 18 April) or filing using a paper tax return (usual deadline is 15 April).

 

As a company director, when should I report the director’s fees payable to me?

The director’s fees need to be included in Form IR8A in the year when the fees are declared and approved at the company’s Annual General Meeting or Extraordinary General Meeting, whichever is earlier. This is regardless of when the payments are made to the directors.

If the director is non-tax resident, withholding tax is applicable for the fees declared.  Company must withhold 15% of the fees and make payment to IRAS within one month of declaration or payment whichever is earlier.

 

Are lump sum payments for Retrenchment taxable to employees?

Retrenchment payments made to employees for their loss of employment are not taxable, however if payment to employees are for benefits such as salary in-lieu of notice and gratuity for past services, they are taxable in hands of the employees.



Corporate

What are ECI and Who and When to file ECI? What if I don’t file ECI?

ECI means Estimated Chargeable Income; it is an estimate of a company’s chargeable income for a Year of Assessment (YA). A company has to furnish ECI within three months after the end of its financial year end. Even if the company estimates its chargeable income as Zero, it stills has to file a “NIL” ECI.

IRAS may issue a Notice of Assessment (NOA) based on their estimation of the company’s income if the company does not submit the ECI within three months from the end of its financial year. If the company does not agree with IRAS estimated assessment, the company must lodge an objection either electronically or write to IRAS within 30 days from the date of the NOA together with reasons for not filing ECI on time. Otherwise, the estimated assessment may be treated as final, even if the actual income based on the Form C and accounts submitted subsequently is lower than IRAS estimates. This means the estimated assessment may not be amended based on the Form C and accounts since there is no valid objection to the estimated assessment within the stipulated time.




What are Form C and Who and When to file Form C?

The Form C is a declaration form for a company to declare its income. All companies carrying on a trade or business in Singapore need to file Form C annually to report their income; even if the company is making losses, it is required to file the Form C.

If the company does not file Form C by the due date, IRAS may issue a NOA based on an estimation of the company’s income. If the company does not agree with IRAS’s estimated assessment, it has to object in writing within 30 days from the date of the NOA. Otherwise, the estimated assessment will be treated as final even if the Form C submitted subsequently shows lower taxable amount.( Is this correct? The way you say is the estimate is the actual income and when the right accounts are submitted, they will ignore your actual income?)

 

Does a dormant company need to submit Form C?

A dormant company is one that does not carry on business and has no income for the whole of the preceding year.  A dormant company must submit Form C unless it has been granted waiver for submission of Form C.

 

What type of tax exemption scheme for New Start-up Company?

A qualifying new start-up company will enjoy full tax exemption on the first S$100,000 of its normal chargeable income for each of its first three consecutive years of assessment (YA) with effect from Year of Assessment YA 2005. The first YA refers to the YA relating to the basis period during which the company is incorporated.

This tax exemption scheme for new start-up company is enhanced with effect from YA 2008, the qualifying company to enjoy tax exemption on the first S$100,000 of its normal chargeable income and 50% partial exemption on the next S$200,000.

However, if the company does not meet the qualifying conditions you will still be given the 50% partial tax exemption on the first S$300,000 chargeable income.

 Good Services Tax

When do I need to register? Is GST registration compulsory?

 The company required to continually assess whether the business needs to do a compulsory registration for GST.  Registering for GST is compulsory when the company taxable revenue for the past 4 quarters exceed S$1 million; or the company is currently making sales and reasonably expects that the taxable revenue in the next 12 months to exceed S$1 million.

The company needs to apply for GST registration within 30 days of the date which your registration liability arises. If the business revenue does not fall under the circumstances above, you do not need to register for GST. However, the company can choose to register for GST on voluntary basis.

 

When do I need to file my GST Return and what if I have failed to file or filed late? Can the company apply for extension of deadline for submission?

The company required to e-file its GST returns and pays any tax due by the due dates. Both GST returns and payment are due one month after the end of the accounting period covered by the return. If the company is on GIRO plan for GST payment, deductions will be made on the 15^th day of the month after the payment due date. Penalties will be imposed if the company is late in filing the GST return and making payment. The company is requires to file a NIL GST return even if there is no business activity during the accounting period.

As one month after the end of the accounting period is a reasonable deadline, no extensions will be granted. The company must write in before the filing due date with the reason and supporting documents to enable IRAS to consider the request of extension.

 

 

AUDIT SERVICES

What is the difference between Exempt Private Company (EPC) and Private Company?

An Exempted Private Company (EPC) is a private company which has at most 20 shareholders and none of the shareholders is a corporation. It can also be a company that is wholly owned by the Government and which the Minister has declares in Gazette as an EPC.

A Private Company is a locally incorporated company where the maximum number of shareholders is limited to 50.

 

Why the company required a Statutory Audit? What is an audit exemption?

The company is required to perform Statutory Audit under the Companies Act Cap. 50. Company exempted from audit requirements are not required to have their accounts audited, instead the company will prepare unaudited accounts for purposes of AGMs and filing with ACRA and IRAS.

The company is exempted from audit if the financial period commences on or after 15 May 2003 but before 1 June 2004 and the company’s revenue is not more than S$2.5 million or financial period commences on or after 1 July 2004 and the company’s revenue is not more that S$5.0 million or any company including an d Exempt Private Company (EPC) that is dormant for the financial year commencing on or after 15 May 2003.

 

What are the benefits of a Statutory Audit?

A statutory audit provides benefits to company, regulators, shareholders and other stakeholders. Those benefits such as a deterrent to fraud and money laundering; a stimulus to openness and transparency; increase in the reliability of accounts and thus their value to all users and protection of the wider public interest etc.

CORPORATE SECRETARIAL

Who can register a business entity and what are the basic requirements?

A business entity must have at least one shareholder and at least one director ordinarily resident in Singapore at least 18 years of age (with effect from 1 March 2009) and must not be an undischarged bankrupt or must have obtained the permission of the High Court or the Official Assignee. If foreigner wishes to act as local director of the company, he/she can apply for an EntrePass from the Ministry of Manpower.

 

When should a company holding its Annual General Meeting and file its Annual Return?

A company must hold its Annual General Meeting (AGM) and file the Annual Return (AR) in accordance with the Companies Act. At the AGM, directors shall present a true and fair view of the company’s accounts to their shareholders.

A company is required to hold its first AGM within 18 months after its incorporation and subsequent AGMs must be held every calendar year and the interval between AGMs should not be more than 15 months. The annual Return must be filed with the Registrar within one month after the AGM. The accounts presented at the AGM shall be made up to a date not more than 6 months before the AGM.

 

Can a company request for an extension to file Annual Return or hold an AGM? What if the company fails to hold its AGM or file Annual Return?

A company can apply for an extension of time to hold its AGM. Upon approval of the application, the company must file its annual return within one month from the new AGM date. Please refer to ACRA website for charges for extension.

A penalty will be imposed for late lodgment as prescribed in the Companies Act, Cap 50. A summon may be issued against a company director for not holding the company’s Annual General Meeting and filing its Annual Return as stipulated under the law.

 

What is XBRL and how does it works?

XBRL stands for eXtensible Business Reporting Language; it is a language for the electronic communication of business and financial data worldwide. From 1 November 2007 onwards, Singapore incorporated companies which are either limited by shares or unlimited must file their financial statements in XBRL for financial periods ending on or after 30 April 2007. There are two options available to prepare financial statements in XBRL; Option A (Full XBRL) or Option B (Partial XBRL). There is a difference for filings in Option B for the financial periods beginning on or before 31 December 2008 and financial periods beginning on or after 1 January 2009. However, the different financial periods stated in Option B do not affect the filing in Option A. With effect from October 2013, Option B has been officially removed by ACRA.

HUMAN RESOURCE

How to apply employment pass and who is eligible?

The Employment Pass (EP) is a work pass for foreign professionals working in managerial, executive or specialized jobs. Foreigners who are interested to work and has a job offer in Singapore may apply for an EP. The applicant must meet the basic requirements in order to obtain the EP.

 

Can a Dependent’s Pass holder work in Singapore?

The Dependant’s Pass (DP) holder wishes to work in Singapore; the employer is required to apply for a Letter of Consent (LOC). The DP holder can only begin working after the employer has received the LOC.

 

Is an employee entitled to another day off if a public holiday falls on a rest day or non-working day?

Yes, if the holiday falls on a rest day, the next working day shall be a paid holiday. If the holiday falls on a non-working day (or off day), the employer may decide to compensate the employee with an extra day’s pay in lieu of that holiday or give the employee another day off as a holiday.

INTERNAL AUDIT

What is Internal Audit?

It is a part of corporate Governance to help evaluate internal controls designs of processes, procedures & policies of an organization.

 

What is Corporate Governance?

A framework of well-designed controls, policies, processes and procedures to monitor an entity, with related reporting mechanism for management steering and accountability.

 

Who needs Internal Auditing?

For Companies listed on the Singapore Stock Exchange having the Internal Auditing function is mandatory

 

What is Risk Management?

It is a process of framework whereby an organization’s risk will be evaluated and prioritize for actions.

 

What is Risk?

Risk is a concern about something making you sleepless.

 

Is there a Life cycle for Risk Management?

Yes there is an a cycle, Initiation, Control, Mitigation, Minimization, Elimination

 

What are risks classified in Internal Auditing?
Generally, there are 2 categories of risks, internal & external, while some people prefer to classify them under 3 categories, Inherent, Operating and Design.