How Singapore’s Tax System Benefits Businesses
Due to the low corporate tax rates of Singapore as well as the government-supplied tax schemes which have served to lower the tax burdens of newer companies and startups based in Singapore, it is not difficult and often beneficial for companies to conduct business operations in Singapore. There are also several lucrative tax incentives and grants which are provided to eligible companies. Although Singapore’s corporate tax laws mandate that company profits are to be taxed, such is not the case with regards to dividends which a company’s shareholders receive; neither are most forms of income sourced from abroad nor the profits garnered by companies. Similarly, Singapore does not tax capital gains and most types of foreign-sourced income. The network of Avoidance of Double Taxation Agreements (DTAs) and Unilateral Tax Credits of which Singapore is a part permit Singapore companies to reduce or even eliminate the amount of tax money to be paid on foreign-sourced income.
DTAs and Unilateral Tax Credits are part of international tax planning, which is a task some might find difficult to understand. This is where we at Paul Hype Page & Co can come in. We will assist you with your international tax planning in order to enable you to maximize your tax advantages. We will also help you use DTAs to your financial benefit.
How Singapore’s Tax System Benefits Individuals
Singapore attracts people from all over the world by offering low personal tax rates to them. The government of Singapore has also provided its individual taxpayers with many different tax deductions to ease their tax burdens. Individuals may also make use of DTAs if they are eligible to do so. Individual taxpayers in Singapore are not required to pay taxes on income from abroad, inheritance, capital gains, or dividends.
Rights of Singapore Taxpayers
Singapore taxpayers are granted certain rights with regard to their status as taxpayers. One such right is the right to avoid paying taxes on any gains and profits which have specifically been deemed to be exempt from income tax or are directly related to an existing administrative concession. In such a situation, the government has ruled that such a sum of money is not taxable. Therefore, should the taxpayer ever be faced with a claim that tax money is owed on such amounts of money, the taxpayer can justly refuse to pay the money claimed to be owed.
Singapore taxpayers also have the right to object to decisions made by IRAS if they believe that they have been overcharged. Objections can be related to one’s income tax bill, notice of assessment, audit assessment, annual value of property, and several other areas overseen by IRAS. If the taxpayer can prove that IRAS is in error, the taxpayer can claim the amount which had been initially and incorrectly overcharged by IRAS.
The Inland Revenue Authority of Singapore (IRAS) is the leading tax authority of Singapore. It operates under the auspices of the Ministry of Finance. It was created in 1960 and was originally known as the Inland Revenue Department. It integrated all of Singapore’s primary revenue collection agencies so as to serve as the focal point of all of the collection and administration of the country. IRAS collects tax money of various types. It also affects the creation of Singapore’s tax policies by providing government figures with important feedback about the impact which each tax policy would have upon the country and its taxpayers. IRAS is also in charge of the monitoring of changes to Singapore’s tax environment so that it can best decide upon the best course of action to be taken.
IRAS also oversees and protects the rights of Singapore’s taxpayers. It does so by doing what it can to ensure that no taxpayer is ever placed in an unjust situation with regard to taxation. IRAS must ensure that every taxpayer of Singapore pays a fair share of taxes and is taxed in a manner which is in accordance with the tax laws of Singapore today.
If someone who was once a Singapore taxpayer ceases to become one, the former taxpayer forfeits all rights once enjoyed while a taxpayer of Singapore. However, should such a person ever return to becoming a Singapore taxpayer, the person’s rights as one will be duly restored.