Snapshots of Hong Kong Budget 2012-2013 delivered on 1 February 2012


Dear Valued Clients and Friends

Mr. John Tsang, the Financial Secretary of Hong Kong Special Administrative Region, has just delivered the Budget for the financial year 2012-13 today.

According to Mr. Tsang, for 2012-13, there will be a small deficit in the Consolidated Account but will largely achieve a fiscal balance. The estimated government revenue will be HK$390.3 billion. On the other hand, operating expenditure for the coming year is estimated to be HK$315 billion, which represents a 6% increase over the revised estimate for 2011-12. Recurrent expenditure will be HK$264.3 billion whereas capital expenditure will be HK$78.7 billion. Total estimated government expenditure for the coming year is forecast to be HK$393.78 bullion. The government’ fiscal reserves are estimated at $658.7 billion by the end of the following financial year, representing approximately 34% of GDP or equivalent to 20 months of government expenditure. In terms of the economic highlight, the forecast GDP growth is 1–3% and the headline inflation rate is estimated at 3.5%.

Continue reading Snapshots of Hong Kong Budget 2012-2013 delivered on 1 February 2012

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Happy and Prosperous New Year


 

 

Dear Valued Clients and Friends

In less than 12 hours, we will celebrate the arrival of 2012.  On behalf of WHM Consulting Pte Ltd, I take this opportunity to wish all of you a Happy and Prosperous New Year.

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

Another taxpayer was penalized for making GST errors


 

 

Dear Valued Clients and Friends

It is reported in the Inland Revenue Authority of Singapore’s (“IRAS‘”) website today that a local company that is in the business of promoting and organizing shows and other entertainment acts failed to state the correct amount of Goods and Services Tax (“GST“) output tax in its GST returns during 2005 and 2006, resulting in an underpayment of GST amounting to some S$503,000.

The error was uncovered by IRAS investigators who found that sales figures submitted by the taxpayer for income tax purposes did not tally with the sales figures reported for GST output tax for the years concerned. It was also found that the taxpayer had not included the GST collected on the ticket sales for both years as output tax in its GST returns.

Although the taxpayer was aware that it was required to account for the GST on the ticket sales, it failed to check the GST returns prepared by its tax agent.  The taxpayer pleaded guilty to charges of under-declaration of GST without reasonable excuse and was ordered to pay a penalty of S$602K and a fine of S$10K. During the investigations, it was found that the taxpayer also made similar under-declaration of output tax in other years and the amount of tax and penalty involved was approximately S$984K.

What does this mean to our clients?

We are aware that many clients outsource the preparation of tax returns to their tax agents. Having said that, the clients must understand that they have the final responsibility to make sure that these tax returns are accurately prepared and submitted within the prescribed time-frame.  They cannot rely on the fact that the tax returns prepared by their tax agents must be correct and thus, they do not need to undertake any further review.  As you have seen in this particular instance, it would not be accepted by IRAS as an excuse.

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

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

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

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