Personal Income Tax
Most individuals in Singapore who pay personal income tax are not fully aware of the regulations and requirements of the system. The Inland Revenue Authority of Singapore (IRAS) provides comprehensive documentation on tax filing and related matters. A professional accounting firm that is familiar with the tax process in Singapore, can help individuals make sense of the information provided, and uncover insights into each individual’s own income tax assessment and calculations. RCW makes it easy for individuals to understand and comply with tax obligations in Singapore. Our accounting expertise not only simplifies the entire process, but can help you file the correct amount of tax owed and calculate any benefits or returns that you may be entitled to. The most common questions related to personal income tax matters, and their solutions, in Singapore are discussed below.
How do I avoid penalties?
The IRAS works together with you and your accounting firm in Singapore to create a fair and just tax system in Singapore. Individuals, however, who do not comply with the system’s requirements, owing either to negligence or insufficient knowledge of procedure, may be subject to penalties. Improper filing of taxes may also result from errors or miscalculations for your accounting documents. Checking whether your employer is sending your income details to the IRAS (as part of the auto-inclusion scheme) is the first step to avoiding such errors. If you have to file your tax returns yourself, it is best to have the process handled by experts who are aware of the accounting and tax systems in Singapore. Under-declaration of income is a serious matter which the IRAS investigates. The penalty for under-declaration may be a fine that exceeds the original amount of tax owed in the first place. A professional accounting firm in Singapore can help you declare your income accurately and completely, thus saving you not only time and worry, but also monetary penalties that can eventually stagnate your business’ s growth and credibility.
How do I file my taxes for self-employed income?
Self-employment offers plenty of opportunities, and comes with many responsibilities. The independence of self-employment can often be marred by the legal requirements that accompany businesses in Singapore. A professional accounting firm in Singapore can help take care of these matters, so the business can concentrate on what it does best. The first step to filing taxes for self-employed income is to find out what forms and regulations apply to you. Educate yourself on the processes for self-employed income tax filing by visiting the IRAS or speaking with a professional accounting firm. Self-employed individuals are required to declare trade income under ‘Trade, Business, Profession or Vocation’. Every self-employed business comes with its own unique set of requirements. A professional accounting firm can help you cut away what is irrelevant, and focus instead on matters that only apply to you.
How do I declare my CPF contribution as a self-employed person?
You don’t have to worry about declaring CPF contributions. CPF contributions for self-employed individuals are automatically calculated and included in your income tax assessment. It is important, however, to note the amount of CPF and Medisave contributions you are paying, and what amounts can be claimed against these payments. Professional accounting firms in Singapore have the expertise to manage your CPF and Medisave accounting matters, as well as educate you on your rights and responsibilities towards these contributions.
How do I claim reliefs?
It is important to understand the inherent differences between paper filing and e-Filing when claiming reliefs. For paper filing, reliefs claimed the previous year need to be entered every year, even if the amount of relief remains unchanged. When you e-File, reliefs are automatically included in the assessment. If there are changes, you can indicate them on the Income, Reductions and Relief Statement (IDRS) page and describe them on the Main Tax Form. It is also important to understand what reliefs you are entitled to. Claiming for a relief that you are eligible for may have adverse consequences for your tax filing and income matters. Consult with a professional accountant or accounting firm in Singapore. RCW regularly deals with such matters. We explain these issues in simple, clear and accurate language so you can have a better understanding of your accounting matters.
How do I calculate my income tax rate?
RCW has a simple income tax rate calculator to help you anticipate what your income tax rate is. Please note that this tax calculator is not intended to be a replacement for real tax and accounting calculations. Please consultant with a certified accountant or professional accounting firm in Singapore.
What do I do if I failed to file or filed late?
Failing to file your income tax return, or filing your income tax return after the deadline, is penalised by IRAS. Individuals wishing to avoid income tax penalties in Singapore are advised to comply with the regulations set by IRAS. If you failed to file your income tax, or file late, IRAS may issue an estimated Notice of Assessment (which means you will have to pay the tax amount based on this estimated Notice of Assessment within 30 days). In some cases, IRAS might impose a penalty, summon an individual to court, issue a Warrant of Arrest, or take legal actions and impose a penalty that might be up to double the tax amount assessed by IRAS. RCW Professional Accounting Firm Singapore is an invaluable source of expertise, information and guidance for such matters. Speak to an RCW accountant about avoiding such issues at the outset. If you are facing penalties for late filing, talk to an RCW certified accountant who will be able to help you in this matter.
What do I do if I get an Offer of Composition for Failure to File Return?
If you get an Offer of Composition for Failure to File Return, it means that you did not file your income tax return and the IRAS is offering you the opportunity to rectify this oversight. You will probably receive a letter from IRAS telling you to file your tax return. Do so immediately to avoid the possibility of having to appear in Court. In addition, pay the composition fee by the due date stated in the letter. Sometimes, your Offer of Composition may indicate that the composition fee will be waived if you file within 14 days. If this is the case, file your tax return immediately. You can check that IRAS has received your filing by visiting the myTax Portal website under ‘View Return Status’. RCW Professional Accounting Firm Singapore can help you make sense of the Offer of Composition and educate you on your rights, responsibilities, and next steps to resolving these matters.
Can I appeal against the Composition fee?
The composition fee might be reduced or waived by IRAS if there were circumstances beyond your control that caused your income tax filing to be delayed. For example, if you were working or studying overseas and you did not receive any source of income in Singapore, you might qualify for a reduction or waiver in the composition fee. In addition, if you were hospitalized as the result of an accident or serious illness, you can appeal to IRAS to consider reducing or waiving the composition fee. IRAS handles appeals on an individual, case-by-case basis. There are some reasons and circumstances in which IRAS can reject an appeal. Knowing the system in-depth, or seeking expert advice, will help you to determine the most effective cause of action. RCW Professional Accounting Firm Singapore can help you understand the appeals process and help you through the issue towards resolution. An RCW accountant will also be able to inform you of what activities may qualify for waiver of penalties and how the appeals system works.
