If you are running a business in Singapore, be it a sole-proprietorship, partnership or a company, it is imperative that you are aware of all your responsibilities. Satisfying all statutory requirements is important to avoid legal problems or getting penalties. Among these responsibilities is fulfilling your tax reporting requirements both for your business and your employees.
In Singapore, tax residents are required to prepare and file their individual income taxes on time. The deadline for individual income tax e-filing is April 18 while individual income tax paper filing is April 15. An individual is considered as a tax resident if he or she is a Singapore citizen or Singapore Permanent Resident (SPR). Additionally, foreigners who accrued income and have either stayed or worked in the city-state for at least 183 days prior to the Year of Assessment (YA) are also considered tax residents and are therefore required to pay the government with income tax. All the information about a tax resident’s employment income is required to make sure that the computation for income tax is accurate.
In line with this, the S68(2) of the Income Tax Act, mandates all employers to prepare, where applicable, the Form IR8A, Appendix 8A, Appendix 8B or Form IR8s of employees who have been employed in Singapore by March 1. To give employees ample time to prepare and file their income taxes, employers are required to provide the accomplished relevant forms to the employees by March 1.
Find out which are the applicable forms that you must complete and provide to your employees:
The Form IR8A must be filled out for all employees whether they are full-time, part-time or non-resident employees, Company Directors, or pensioners. Take note that the form must be completed, signed and provided to your employees by the March 1.
If you provided some of your employees with benefits-in-kind, then you must complete the Appendix 8A form. Similarly, the completed form must be given to your employees by March 1.
If any of your employees directly or indirectly derived profit or gain from Employee Stock Option Plans or any similar form of Employee Share Ownership Plans, then you must fill out the Appendix 8B form for them. Again, the completed form must be given to your employees by March 1.
In the event that you have paid excess CPF contributions, have claimed for a refund or will claim a refund for any excess CPF contributions that you have included in your employees’ remuneration, then you must accomplish a Form 1R8. The form should be given together with other relevant forms on the same deadline.
Auto-inclusion Scheme for Employment Income
(AIS for Employment Income)
Through this scheme, employers will be able to electronically complete and submit their employees’ income information to the Inland Revenue Authority of Singapore (IRAS). Employers who have hired at least 11 employees or have received a “Notice to File Employment Income of Employees Electronically” are required to electronically submit their employees’ income tax information before March 1. By doing so, the submitted income tax information will appear in the employees’ electronic tax return and will automatically be included in their individual income tax assessment.
If you are one of the employers who participate in the AIS for Employment Income, you will no longer be required to provide employees with a completed Form IR8A, Appendix 8A, Appendix 8B or Form IR8. As an alternative, however, you may give them a separate statement of their earnings that they can use for their personal records.
Staying compliant with tax obligations
Being an entrepreneur can get overwhelming. On top of managing and operating your business, you must also make sure that all your tax obligations and other statutory requirements are met on time.
At Richmond, we aim to assist small and medium companies with their accounting and tax requirements through our complete suite of corporate services. Our specialists are able to provide effective strategic guidance and professional support – an added value service that goes beyond simply complying with statutory requirements.
If you need assistance in your corporate income tax and individual income tax requirements, you may schedule a free consultation with one of our specialists through our Contact Page. To get a quick estimate of your corporate income tax or individual income tax, you may use our FREE Online Calculators.