Parent Relief and Handicapped Parent Relief in Singapore are tax reliefs granted to individuals who are supporting their parents, grandparents, parents-in-law, or grandparents-in-law in Singapore. These reliefs were introduced to encourage Singapore’s taxpayers to be more willing to give financial support to aging parents or grandparents.
Criteria to Claim the Parent Relief & Handicapped Parent Relief in Singapore
The following criteria must be fulfilled in order for an individual to claim Parent Relief or Handicapped Parent Relief:
Singaporean tax laws define the phrase “living in Singapore” as being applicable to one who permanently lives in Singapore except for short absences. Foreign dependants are usually considered to live in Singapore if they stay there for at least eight months of a YA.
If the dependant had been living in the individual’s household during the previous YA, the individual must have spent a minimum of S$2,000 to care for the dependant in order to be eligible for any of the relevant tax reliefs.
“Annual income” may refer to any of the following: taxable income, including trade, employment, rental, and SRS withdrawals; tax-exempt income, including bank interest, dividends, and pensions; and all foreign-sourced income, regardless of the location of the income’s source or whether the income has been remitted to Singapore.
How much is the Parent Relief & Handicapped Parent Relief in Singapore?
Parent Relief is worth S$5,500 if the taxpayer does not stay with the dependant and S$9,000 if the taxpayer does. Handicapped Parent Relief is worth S$10,000 if the taxpayer does not stay with the dependant and S$14,000 if the taxpayer does.
These figures were introduced for YA 2015; all are increases from the prior amounts of S$4,500, S$7,000, S$8,000, and S$11,000 respectively.
Details of the Parent Relief & Handicapped Parent Relief in Singapore
Starting from YA 2015, Parent Relief and Handicapped Parent Relief may be shared with other claimants if nobody else is claiming any other relief, with the exception of Grandparent Caregiver Relief, with regard to the same dependant. This applies to individuals who are supporting the same dependant. In such cases, the relief that can be claimed will be shared between the claimants. How this relief will be divided is left to the claimants’ discretion.
Parent Relief and Handicapped Parent Relief may be simultaneously claimed on the same dependant. These reliefs may also be claimed for up to two dependants. Hence, if a person who is supporting both parents and parents-in-law claims the reliefs for the parents, this person is not allowed to claim any reliefs for the parents-in-law.
If the dependant died during the previous YA, the full amount of any of the relevant tax reliefs may be claimed should all the criteria to claim them have been fulfilled.
Parent Relief and Handicapped Parent Relief may be claimed by using e-Filing or paper filing. Those claiming Handicapped Parent Relief for the first time must also complete and submit the Handicapped-Related Tax Relief form via email.
Conclusion
If you are a foreigner thinking of setting up a business or as an individual in Singapore, it is crucial to have tax advice on Singapore tax residency, income source and incentives for your company or personal tax planning.
FAQs
Companies can apply for a COR either:
- Electronically via myTax Portal. The company staff or tax agent has to be authorised via the e-Services Authorisation System (EASY) before a COR can be applied through myTax Portal; or
- By submitting an application form.
- Download the application form for certificate of residence (44KB); or
- Request a fax copy of the application form by using the self-help options at the Corporate Tax Integrated Phone Service at 1800-356 8622.
Your company’s accounts are prepared up to the financial month for each year. Assuming your financial year end is 30th June, your accounts are prepared up to 30th June each year. The basis period for each YA is the preceding accounting year ended 30th June. Example, your company’s basis period for YA 2008 is from 1st Jul 2006 to 30th Jun 2007.
Your company’s accounts are to be prepared up to 31 December each year. The basis period for each YA is the preceding calendar year ended 31 December. Example, your company’s basis period for YA 2008 is from 1 Jan 2007 to 31 Dec 2007.
Income is assessed on a preceding year basis. This means that the basis period for any Year of Assessment (YA) generally refers to the financial year ending in the year preceding the YA.
