Merry Christmas 2011


 

 

Dear Valued Clients and Friends

On behalf of WHM Consulting Pte Ltd, I wish all of our readers a Merry Christmas.   Christmas calls for celebration with our loved ones!  So, let’s take this time to express our gratitude to those who have made our Christmas so special.

Best regards
Jack HM Wong
Founder and Lead Business & Tax Advisor
WHM Consulting Pte Ltd
E-mail: jack.wong@whm-consulting.com

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Double Tax Agreement between Singapore and Panama came into force on 19 December 2011


 

 

Dear Valued Clients and Friends

Singapore has now 68 Double Taxation Agreement (“DTA“) with the rest of the world after the DTA with Panama came into force on 19 December 2011.  This DTA includes the internationally agreed Standard for the exchange of information for tax purposes upon request.  Other salient features of this DTA include the following:

Article 5 – Permanent Establishment (“PE”)

  • A building site, a construction, assembly or installation project, or supervisory activities in connection therewith will be deemed to be PE if they last for more than 9 months
  • The furnishing of services, including consultancy services, by an enterprise of a Contracting State through employees or other personnel engaged by the enterprise for such purpose will be deemed to be PE  such activities continue within the other Contracting State for a period or periods aggregating more than 270 days in any 12-month period.
Article 8 – Shipping and Air Transport
  • Profits derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic is taxable only in that State.
  • Scope of income under this article includes the following:
    • Interest on funds connected with the operations of ships or aircraft in international traffic
    • profits from bareboat charter
    • Profits from the use, maintenance or rental of containers if they are incidental to operation of ships or aircraft in international traffic.
Article 10 – Dividends
  • 4% Withholding tax (if shareholder is the beneficial owner holding directly at least 10% of capital of the dividend paying company).
  • 5% withholding for all other cases

 

Article 11 – Interest

  • Maximum withholding tax rate of 5%

Article 12 – Royalties 

  • Maximum withholding tax rate of 5%

We trust that the above information is useful to you.

As always, we are pleased to assist you or your company in resolving any potential tax issues.  Please contact us at jack.wong@whm-consulting.com if you would like to discuss any of your/ your company’s concern on tax issues.

Best regards
Jack HM Wong
Founder and Lead Business & Tax Advisor
WHM Consulting Pte Ltd
E-mail: jack.wong@whm-consulting.com

Amendment to Income Tax, GST and Stamp Duties Legislation


Dear Valued Clients and Friends

The following Acts that were passed by the Parliament on 22 November 2011 had been assented to by the President on 8th December 2011:

  • Income Tax (Amendment) Act 2011
  • Goods & Services Tax (Amendment) Act 2011
  • Stamp Duties (Amendment) Act 2011

They were all first published electronically via egazette on 20 December 2011.

We trust that the above information is useful to you.

As always, we are pleased to assist you or your company in resolving any potential tax issues.  Please contact us at jack.wong@whm-consulting.com if you would like to discuss any of your/ your company’s concern on tax issues.

Best regards
Jack HM Wong
Founder and Lead Business & Tax Advisor
WHM Consulting Pte Ltd
E-mail: jack.wong@whm-consulting.com

A Growing Trend in IRAS’ Audit and Investigation: What Should Taxpayers Do?


 

Dear Valued Clients and Friends

2011 will be coming to an end in a fortnight’s time.  As most of our clients will be closing their financial year end this month, we believe that it may be worth to reiterate the growing trend in the Inland Revenue Authority of Singapore’s (IRAS’)’ audit and investigation activities.

By now, most (if not all) companies should have already filed their income tax return and computation for the Year of Assessment  (“YA“) 2011.   On 21 December 2011, I will be conducting the final run in this year for the Institute of Certified Public Accountants of Singapore (“ICPAS“) on the subject regarding common pitfalls of the Singapore income tax compliance process and the aim of this course is to highlight certain common risks associated with incorrect preparation of income tax returns and computations by some companies and at the same time, emphasize the importance of maintaining proper records and documents in the event of IRAS’ investigation.  This is one of the more popular tax courses in ICPAS and the good news is that you are still in time to sign up for this course.  Simply go to our Page “Upcoming Seminars and Workshops” for details.

Some of you are aware that in 2009, IRAS issued an e-Tax Guide concerning the Voluntary Disclosure Programme (“VDP”).  The purpose is to help some taxpayers who might be ignorant or negligent in terms of their tax reporting obligations by encouraging to come forward in a timely manner to disclose errors and/or omissions made in their tax returns. Penalties due to incorrect tax returns may be reduced on a discretionary basis by IRAS.  It should also be noted that this programme applies to both income tax (including withholding tax) and Goods and Services Tax but  does not apply to tax evasion cases,which is a criminal offence punishable under the law.

According to IRAS, the following will become the area of focus in compliance:

  • Classification of income and expenses by companies enjoying tax incentives
  • Related-party transactions and allocation of development cost by real estate developers
  • Income declaration by companies whose principal activities are that of tutoring services or tuition agencies.

As part of its efforts in educating the public and encouraging more taxpayers to participate in the VDP, IRAS has also taken active steps in publishing landmark cases on its website to highlight the manner in which certain taxpayers had attempted to evade taxes and the penalties imposed on such taxpayers after successful prosecution by IRAS.

We trust that the above information is useful to you.

As always, we are pleased to assist you or your company in resolving any potential tax issues.  Please contact us at jack.wong@whm-consulting.com if you would like to discuss any of your/ your company’s concern on tax issues.

Best regards
Jack HM Wong
Founder and Lead Business & Tax Advisor
WHM Consulting Pte Ltd
E-mail: jack.wong@whm-consulting.com

Additional Buyer’s Stamp Duty on Residential Property Effective from 8 December 2011


Dear Valued Clients and Readers

On 7 December 2011, the Government has announced the implementation of additional buyer’s stamp duty (“ABSD“) to be paid by certain profiles of people who buy or acquire residential properties (including residential land).  The new measure will take effect from 8 December 2011.

Who are the Affected Buyers?

a) Foreigners, companies, partnership and societies

b) Singapore Permanent Residents (“PR“) who already own 1 or more residential properties, whether owned wholly, partially, or jointly with others

c) Singapore Citizens (“SC“) who already own 2 or more residential properties, whether owned wholly, partially, or jointly with others

The new ABSD is payable by affected buyers at fixed rates on the actual price paid or market value of the property whichever is the higher.  The ABSD rate will be 10% for (a), and 3% for (b) and (c), on the total price or market value of the property.

Please note that Buyer’s stamp duty (“BSD“) will continue to be payable by all property buyers at unchanged rates.

When is the Effective Date of Implementation of ABSD?

ABSD will apply to Contracts or Agreements (whichever is earlier), or Documents of Transfer*, dated on or after 8 December 2011.

Where an Option To Purchase has been granted on or before 7 December 2011 and exercised on or before 28 December 2011, ABSD will be remitted upon application.

*Where Contracts or Agreements are not applicable

Summary of BSD and ABSD

page5image3128
Transaction
On and before 7 Dec 2011
page5image8064

On or after 8 Dec 2011
BSD* rates on the total purchase price or market value (whichever is higher)
BSD* rates on the total purchase price or market value (whichever is higher)

page5image16016

ABSD† rates on the total purchase price or market value (whichever is higher)
Foreigners and non- individuals (corporate entities) buying any residential property
1% on first $180,0002% on next $180,0003% for the remainder
1% on first $180,0002% on next $180,0003% for the remainder

page5image26392page5image26936

+10%

page5image30120

PRs owning one and buying the second and subsequent residential property

page5image32376page5image32648

+3%

page5image35536

SCs owning two and buying the third and subsequent residential property

page5image37768page5image38040

+3%
PRs buying the first residential property
1% on first $180,0002% on next $180,0003% for the remainder
page5image46648

1% on first $180,0002% on next $180,0003% for the remainder

page5image49472page5image49744page5image50448

page5image51680

NIL

page5image52944

SCs buying the first and/ or second residential property

Inland Revenue Authority of Singapore has issued the relevant E-Tax Guide on ABSD here.

We trust that the above information is useful to you.

As always, we are pleased to assist you or your company in resolving any potential tax issues.  Please contact us at jack.wong@whm-consulting.com if you would like to discuss any of your/ your company’s concern on tax issues.

Best regards
Jack HM Wong
Founder and Lead Business & Tax Advisor
WHM Consulting Pte Ltd
E-mail: jack.wong@whm-consulting.com

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