The Inland Revenue Authority of Singapore (IRAS) has created many avenues which enable the taxpayers of Singapore to ensure that they are more able to fulfill their various tax obligations. It has done so through various different schemes and programs. One of the most well-known schemes which IRAS has put in place in order to facilitate the payment of taxes in Singapore is the Auto-Inclusion Scheme. The Auto-Inclusion Scheme allows certain employees to no longer be required to submit tax information because it permits their employers to do so on their behalf.

On a related note, we at Paul Hype Page & Co are able to ensure that all of your tax obligations have been appropriately managed. You may contact our tax experts at any time for further information. We are always willing to be of assistance to anyone who struggles with managing any Singapore tax obligations. If necessary, we will also contact IRAS or any other authorities connected to taxation in Singapore on your behalf so that you can be certain that we have fully managed any tax-related problems you might have.

Details of the Auto-Inclusion Scheme

The Auto-Inclusion Scheme is a scheme which IRAS has created to allow any employer based in Singapore to submit their employees’ employment income information on their behalf. The Auto-Inclusion Scheme allows all such employers to submit this information electronically to IRAS. Once IRAS has received this information, it will automatically include it as part of each relevant employee’s income tax assessment. IRAS will then auto-include this information to their employees’ tax assessment. Therefore, when these employees subsequently file their income tax returns, they are not required to submit their employment income information because this information would have already been received by IRAS.

Starting from the 2020 year of assessment (YA), there is a requirement for certain Singapore-based employers to be participants in the Auto-Inclusion Scheme. Employers who are required to participate in this scheme are those who either employ a minimum of seven employees or have received the Notice to File Employment Income Of Employees Electronically under the Auto-Inclusion Scheme (AIS). This notice has been gazetted under S68 (2) of the Income Tax Act. The IRAS has also provided a link on its website which allows anyone who is interested to find out if a specific employer is to be part of the Auto-Inclusion Scheme according to the criteria which are to be followed.

Singapore attracts investments from around the world by reducing its corporate income tax rate and introducing different tax incentives. Singapore has one of the lowest corporate tax rates in the world.

As your company’s Tax agent , Paul Hype Page & Co Chartered Accountant will be fully responsible for the practice of ensuring that these conditions are met. It is important that we be highly qualified and well versed in local regulations and corporate laws, as we are responsible for the upkeep of important company files, tax reports and tax records.

FAQs

What is the procedure of taxing a company(both foreign and local) in Singapore?2020-07-01T10:51:38+08:00

A company, regardless of whether it is a local or a foreign company, will be taxed on its:

  • income accruing in or derived from Singapore; or
  • income received in Singapore from outside Singapore
How to claim for tax exemption?2020-07-01T10:51:12+08:00

You are required to make a declaration in your income tax returns by giving the nature and amount of the foreign-sourced income that was remitted to Singapore. You are also required to complete the Declaration Form for Foreign-Sourced Income Received in Singapore From 22 Jan 2009 to 21 Jan 2010 (60KB) for submission to IRAS. Although you have to state the use of the foreign income in the declaration form, the usage of such foreign income will not affect the claim for tax exemption.

What is an Avoidance of Double Tax Agreement?2020-07-01T10:39:59+08:00

An Avoidance of Double Taxation Agreement (DTA) is an agreement signed between Singapore and another country (a treaty country) which serves to relieve double taxation of income that is earned in one country by a resident of the other country.

It makes clear the taxing rights between Singapore and her treaty partner on the different types of income arising from cross-border economic activities between the two countries.

The DTA also provides for reduction or exemption of tax on certain types of income.

Only Singapore tax residents and tax residents of the treaty country can enjoy the benefits of a DTA. To find out who are our treaty partners, please refer to the List of Avoidance of Double Tax Agreements.

How income is assessed?2020-07-01T10:39:31+08:00

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.

Where to apply for some tax incentives?2020-07-01T10:38:30+08:00

There are various types of tax incentives available to companies and these are provided in the Singapore Income Tax Act (ITA) and Economic Expansion Incentives Act (EEIA). Some of the tax incentives available are listed in the table below.

Governing legislationTypes of incentivesWhere to apply
ITA/S13FApproved International Shipping EnterpriseMPA
www.mpa.gov.sg
ITA/S13HApproved Venture CompanyEDB
www.edb.gov.sg
ITA/S14BFurther deduction of expenses relating to Approved Trade Fairs, Trade Exhibitions, Trade Missions or to maintain overseas Trade OfficeIE Singapore
www.iesingapore.gov.sg
ITA/S14EFurther deduction of expenses on Research and Development ProjectEDB
www.edb.gov.sg
ITA/S14OTax deduction of special reserves for catastrophic risks of approved general insurersMAS
www.mas.gov.sg
ITA/S19CWriting down allowance for cost sharing agreementEDB
www.edb.gov.sg
ITA/S43(9)Concessionary rate of tax for income of life insurance companies apportioned to policyholders
ITA/S43CConcessionary rate of tax for approved offshore general insurance companiesMAS
www.mas.gov.sg
ITA/S43CConcessionary rate of tax for approved offshore life insurance companiesMAS
www.mas.gov.sg
ITA/S43CConcessionary rate of tax for approved offshore composite insurance companiesMAS
www.mas.gov.sg
ITA/S43CExemption of tax for approved marine hull and liability insurer (onshore and offshore business)MAS
www.mas.gov.sg
ITA/S43CExemption of tax for approved offshore captive insurance companiesMAS
www.mas.gov.sg
ITA/S43CExemption of tax for approved insurer underwriting offshore qualifying specialised insurance riskMAS
www.mas.gov.sg
ITA/S43EConcessionary rate of tax for Approved Operational Headquarters (OHQs)EDB
www.edb.gov.sg
ITA/S43GConcessionary rate of tax for Approved Finance and Treasury CentreEDB
www.edb.gov.sg
ITA/S43QConcessionary rate of tax for Financial Sector Incentive CompaniesMAS
www.mas.gov.sg
ITA/S43PApproved Global Trading CompanyIE Singapore
www.iesingapore.gov.sg
EEIA/ Part IIPioneer IndustriesEDB
www.edb.gov.sg
EEIA/ Part IIIPioneer Service CompaniesEDB
www.edb.gov.sg
EEIA/Part IIIBApproved Shipping Logistics EnterpriseMPA
www.mpa.gov.sg
EEIA/ Part IIIBDevelopment & Expansion IncentiveEDB
www.edb.gov.sg
EEIA/Part XInvestment AllowancesEDB
www.edb.gov.sg
EEIA/Part XIIIBOverseas Enterprise IncentiveIE Singapore
www.iesingapore.gov.sg
EEIA/Part VIAExport Service CompanyEDB
www.edb.gov.sg

 

Employees Who Are to Be Included in an Auto-Inclusion Scheme Submission

The Income Tax Act specifies which employees are to be included by an employer who makes a submission of employee names as required by the Auto-Inclusion Scheme. These employees include the following: full-time employees who are residents of Singapore, part-time employees who are residents of Singapore, employees who are not residents of Singapore but are based abroad and are required to render services within Singapore at any point during the relevant YA, company directors including those who are not residents of Singapore, board members who have been receiving board or committee member fees, pensioners, and employees who are no longer part of the company in question but received income in some form during the relevant YA.

Reporting of Employee Earnings

When an employer reports employee earnings to the IRAS, there are certain tax forms which are to be submitted as per the requirements stated in the Income Tax Act. These forms include Form IR8A, Appendix 8A, Appendix 8B, and Form IR8S. Form IR8A is to be submitted with regard to every one of the employees of the company. However, employees who have been posted abroad and are not working abroad in conjunction with their Singapore employment are not to have their employment income stated in Form IR8A. Appendix 8A is to be completed for any employee who has been provided with any benefits-in-kind. Appendix 8B is to be completed for any employee who has received any gains or profits from Employee Stock Option Plans or any other Employee Share Ownership Plans. Form IR8S is to be completed by any employer who has made excessive CPF contributions on their employees’ wages or have claimed or plan to claim refunds on such contributions.

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