Over 260,000 firms to benefit from simpler corporate tax filing this year
SINGAPORE – Filing corporate taxes will be a quicker and simpler process this year, with the introduction of several new initiatives.
More than 260,000 companies are expected to benefit from the initiatives, which include the syncing of financial year-end details and simplified tax treatment for qualifying telecommuting assets, said the Inland Revenue Authority of Singapore (Iras) on Thursday (Oct 7).
All companies, including those with no business activities or in a loss position, are to file their corporate income tax returns electronically for the year of assessment 2021 by Nov 30. Paper filing of taxes are no longer accepted.
Partners the taxman worked with include the Singapore Chartered Tax Professionals (SCTP), which represents tax practitioners in Singapore, tax software providers, the Accounting and Corporate Regulatory Authority (Acra) and the Government Technology Agency (GovTech).
One of the measures introduced, simplified tax treatment for qualifying assets used to work from home, under a Covid-19 concession, is expected to make tax filing quicker for firms – around two hours for an employer with 30 workers.
This applies to capital allowance claims on qualifying equipment which were purchased for employees to work from home, such as work desks, chairs and IT equipment.
Under current guidelines, the employer is required to compute the balancing allowance or charge based on the open market price of the asset if the ownership of the equipment is subsequently transferred to the employee, such as at the end of the work-from-home arrangement.
However, the SCTP noted that employers may find it difficult to determine the open market price for these assets at the point of transfer to employees.
This led to the introduction of a temporary measure to simplify the current tax treatment.
Under this measure, if the equipment costs $2,500 or less, the open market price is deemed to be zero at the time of transfer.
If it costs more than $2,500, the open market price is deemed to be 50 per cent of the original cost if it is transferred within the second year of assessment from the year of purchase.
This falls to 25 per cent of the original cost if it is transferred in the third year of assessment, and zero if it is transferred in the fourth or subsequent years.
This temporary measure applies to assets purchased in the years of assessment 2021 and 2022.
At the same time, seamless filing of returns has also been rolled out to more tax professionals, who no longer have to manually key in tax data.
This continues from last year, when Iras and Acra partnered with several software providers to enable seamless filing for small and medium-sized companies.
This enhanced solution is expected to result in time savings and more accurate filings, Iras said.
The tax authority has also worked with Acra to sync companies’ financial year end details with effect from August 2021.
This means that firms registered with Acra will not need to notify the taxman when they change their financial year end and will be able to receive their estimated chargeable income filing notifications promptly. Foreign companies not registered with Acra must continue to update their financial year end through Iras’ portal.
More details on tax filing can be found on Iras’s website or by contacting the authority.
Join ST’s Telegram channel here and get the latest breaking news delivered to you.
Source: Read Full Article
