Whether you are a local company or a foreign company, paying taxes promptly is necessary to remain within the legal framework of the nation. Tax is not collected without a purpose. Whatever tax is collected by the government in different names are all used to give better facilities for the public. It is from the tax that the government improves infrastructure like roads, bridges, ports, airports, etc. It is the tax that helps the government to improve the government systems and make them more useful and easier for the public. Tax structure in Singapore is very simple but it is not easy for ordinary citizens to understand as various things affect the final tax that you pay. This is why taxation services in Singapore help businessmen a lot in remaining compliant.
Why do you need tax services to manage your taxes? The first reason is that tax is not a subject that you can easily understand unless you are qualified in it. There are different types of taxes that you and your business will be subjected to and you must ensure that you pay all of them. If you are exempted from paying the taxes you must submit the necessary statements that will prove it. For this purpose, you will need a tax consultant to help you.
There are also several types of exemptions and rebates offered by the government. Only a tax consultant who is doing the work will be updated with the latest tax benefits. consultants can help you get the maximum benefit from the authorities. They will prepare and submit the tax returns on your behalf and answer queries from the IRAS if there is a need. Even if you are going to employ taxation services it is better to know a little about the different taxes in Singapore.
The corporate tax in Singapore is charged at a very low rate of 17% on your net earnings. Singapore tax rules specify that only the income that is earned in Singapore or remitted directly to Singapore should be taxed. All the income that the company earns in its foreign offices or branches will not be taxed here. There are certain conditions which must be fulfilled to avail of this benefit. All incorporated companies in Singapore must pay tax except those specifically exempted.
New companies are exempted from paying corporate tax up to a certain amount of earning for the first three years. This exemption will help the companies to invest the same into their business and help it grow. You must prepare an Estimated Chargeable Income statement and submit to the IRAS for calculation of your tax. This work will be done by the providers of corporate tax services in Singapore who will deduct all the expenses that are permitted by the IRAS.
Every company that has crossed a limit of S$1 million turnovers must register for the goods and services tax in Singapore. The registration is a complex process that is best done by the experts in the job. The GST is levied on all transactions in Singapore. It is levied for the import of goods too. The GST is payable by the entity that purchases the product. This means that the burden of the GST will be passed on to the end-consumer.
The assisted self-help kit or ASK is beneficial for all companies that use any of the schemes related to GST. This kit will help in keeping yourself compliant with the GST requirements. It will guide you with the submission of GST returns. You can check whether the returns have been prepared correctly. The kit helps to conduct an annual review of the returns filed in the earlier years.
The service providers dealing with corporate tax in Singapore can help with the review of the ASK which is mandatory when you are using GST schemes. When you avail the review services you can be sure that your GST returns are prepared correctly. The review services are aimed at keeping you compliant with GST requirements.
The personal income tax is very simple for you to calculate. Every person working in Singapore as a resident or non-resident must pay the personal income tax. For getting the best benefits you have to necessarily establish your tax residency. This will allow you to get all the tax benefits offered by the government. You must calculate the taxable earnings and the rate of income tax for that income. The service providers can prepare the personal income tax for individuals who are busy with their official work.
The government of Singapore offers a lot of benefits for taxpayers. But to avail of these benefits, you must be a tax resident of Singapore. You must get yourself a certificate of residence before you can claim your tax rebates and exemptions. The Singapore government has agreements with different countries to prevent taxing companies in both countries for the same transaction. To get the benefits of these agreements you must submit the tax residence certificate.
Withholding tax is levied on companies and persons who are not residents of Singapore. These entities get income from Singapore. The tax is charged for the services being given to the firm or individual for earning money in Singapore. The withholding tax is levied when a resident company or person pays a non-resident entity for the services which they have used. A portion of the payment is held back.
The taxation service providers in Singapore offer a variety of tax preparation services that will help you be compliant with the tax rules. Apart from the above the service providers will also guide you in managing your taxes and knowing how the tax burden will affect your company financially. There are tax experts for this purpose.