Social Security Taxes in Singapore

Social Security Taxes in Singapore

Social security or Central Provident Fund (CPF) contributions are compulsory for Singapore citizens and permanent residents who are working in Singapore. Foreign persons working in Singapore are not qualified for the CPF scheme.

The Central Provident Fund (CPF) is a compulsory savings plan for employees in Singapore. It funds a range of social security schemes, including retirement, healthcare, and housing, and is maintained by the CPF Board.

Under the Scheme, the employer and employee are required to make monthly offerings at the existing contribution rates which depend upon the wage and age group of the employee. Both are required to make CPF contribution on the employee’s Ordinary Wage and Additional Wage subject to an Annual Wage Ceiling.

Prior to 1 January 2016, the wage cap for Ordinary Wage is SGD5,000 per month while the Annual Wage Ceiling is SGD85,000. From 1 January 2016, the wage cap for the Ordinary Wage is revised to SGD6,000 per month while the revised Annual Wage Ceiling is SGD102,000.

Additional Wage is limited to the difference between the prevailing Annual Wage Ceiling (SGD102,000 from the year 2016) and the Ordinary Wage that has been subject to CPF.

Statutory contributions in Singapore are made to the CPF by the employer and the employee. Contributions go into three accounts:

Ordinary Account (OA): Covering housing, insurance, investment, education

Special Account (SA): Covering retirement products

Medisave Account (MA): Covering hospital expenses and other medical insurance

When an employee turns 55, a fourth Retirement Account (RA) is created for them, designed to provide savings for retirement.

Employers should pay CPF contributions within 14 days of the end of the month. They may access their accounts via an online CPF Singapore login portal – which offers access a range of useful tools.

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Tax Exemptions of Foreign Sourced Income in Singapore

Tax Exemptions of Foreign Sourced Income in Singapore

Singapore tax policy is excellent, and this is why the country is often regarded as the tax haven. Factors like low and competitive tax rates, exemption schemes and a series of tax incentives make the nation more attractive for the foreign investors. Most prominently, the government of the country liberalized the Singapore taxation rules on foreign sourced income.

As per the Singapore Tax Act, Section 10(1), the Singapore corporate tax is levied on the income earned from Singapore or received in Singapore from outside the country. Specifically, income earned outside Singapore is subject to taxation in Singapore. However, some exceptions are there. Foreign sourced income is only taxable if it has an office or branch in Singapore.

Under the Section 10 (25) of Singapore Tax Act, foreign-sourced income is taxed only when the income is received in Singapore in following ways:

  • The income that is transferred, remitted or brought into Singapore
  • Any amount of income received from foreign which is applied in or towards satisfaction of any loss or debt incurred by trade or business carried on in Singapore
  • Foreign sourced income applied to buy any movable asset which is brought into Singapore.

Scope of Tax Exemption for foreign-sourced income:

The Singapore government has always been trying to encourage foreign investments and funds to the nation to advance its economic conditions and keep its status of being the easiest place to do business for foreign entrepreneurs. As a part of this initiative, the government has liberalized the taxation rules to exempt foreign sourced income from being subject to any further tax in Singapore.

A Singapore tax resident individual and company can enjoy tax exemption on its specified foreign income that is remitted into Singapore on or after 1st Jun 2003.

The specific foreign incomes are:

  • Foreign sourced dividends
  • Foreign Branch profits
  • Foreign sourced services income

Qualification conditions for tax exemptions:

Under the section of 13(7A) of the Act, with the effect of 1 January 2004, Singapore resident individuals are free to bring back any of their income generated by a foreign source without any further tax on such income.

As for Singapore resident companies, under Section 13 (9) of the Income Tax Act, tax exemption will be approved if the following conditions are fulfilled.

  • The highest headline corporate tax rate of the foreign jurisdiction from which income is received is at least 15%
  • The particular foreign income received in Singapore has been subjected to tax in the foreign jurisdiction.

Singapore resident companies which do not meet the conditions mentioned above are liable to taxation in Singapore.  However, Inland Revenue Authority of Singapore (IRAS) will grant a tax credit to the companies on whatever tax did they pay under foreign jurisdiction even if there is no double taxation treaty is in place.

With the flexible tax policies in Taxation Singapore of foreign sourced income and an array of pro-business tax rules and system of offerings, Singapore will continue to attract foreign investors and entrepreneurs for company incorporation in this business epicenter of South East Asia.

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What are the different types of Business Entities in Singapore?

What are the different types of Business Entities in Singapore

Once you decided to register a company in Singapore, it is essential that you know the type of business entity that you want to incorporate. Your decision can influence the amount you pay in taxes, the image, and insight of your business among your clients and suppliers, formalities for your business is required to do, the personal accountability you face, the ability to have a loan of money, and the possibility to expand your business.

  1. Limited Liability Company

A Limited Liability Company (LLC) is a company limited by shares i.e. its liabilities are limited to the amount of share capital. LLC is a business entity registered under the Singapore Companies Act and a separate legal entity from its members. In a LLC, the liabilities of the owners are limited to the assets in the company and their individual assets are protected from business liabilities. A Singapore LLC can be of the following types:

Private Limited Company (Pte. Ltd.): This type of LLC is the first choice for a lot of business entities in Singapore. The shareholders are not held accountable for company debt that surpasses share capital contributed. The company’s shares belong to 50 people or even much less. These shares are often owned by a business entity or an individual and are not available to the public at large. It is a preference for many because it is easier to manage. Shares can easily be transferred; it has easier means to raise capital and offers a more credible image.

Public Limited Company: Different from a private limited company, the shares of a public limited company are often accessible to the general public. These companies will be found on the stock exchange.  The number of shareholders is at a minimum of least 50 people. Given that these types of companies engage the public at large, there are more rules and regulations that evade exploitation and the mistreat of public funds. This option is best for large businesses.

Public Company Limited by Guarantee: Nothing like a Public Limited Company and a Private Limited Company, this kind of company is set up for non-profitable reasons. It is a public company formed along the principle of limiting the liability to the amount that members add to the assets of the company. This set up is general with non-profit organizations.

  1. Sole Proprietorship

This is the simplest type of company and it’s simple to integrate company in Singapore as Sole Proprietorship. It is, however, the riskiest considering that likes of LLC, the holder of a Sole Proprietorship company is seen as part of the company. They are thus; more responsible to bear risks that happen from the business. Personal assets and those of the company are under the owner’s name, meaning they are not protected. If the business is in debt, then personal assets are legally not away from the reach of creditors. This sort of company is best suitable for solo entrepreneurs. It is significant that the risks concerned in working such a company are clearly understood before departing for registration.

  1. Partnership

A partnership company does not be officially on its own without its partners. Membership ends upon death, leaving or insolvency. There are three types of partnership structures in Singapore: general partnership, limited partnership, and limited liability partnership.

General partnership: This business structure is alike as sole proprietor. The business partners are personally liable for the business liabilities and debts. The partners share liability as one is held accountable for the actions of a fellow partner. It is not the finest business structure in Singapore as it contains a lot of risks.

Limited partnership: A limited partnership consists of general partners and limited partners. There is no maximum value on the number of the partners. A general partner, who may be either a corporation or an individual, will be personally liable for all the debts and liabilities while it remains a general partner. Meanwhile, a limited partner will not be liable for the debts and other liabilities of the partnership beyond the amount of their agreed contribution.

Limited Liability Partnership (LLP): The LLP business structure is highly suitable for chartered professionals who decided to work together. This model combines a partnership entity that protects co-partners from liabilities that may arise from determined misconduct or gross negligence of one partner or a group of partners.

While individual partners are legally responsible for their own misconduct or gross negligence, the partner’s liability is not restricted if such acts occur under the partner’s management or control. In addition, the partnership is not relieved from the liability of other partnership obligations.

There are safeguards within the Singapore Limited Liability Partnership Act to minimize misuse and provide protection to all partners such as its legal freedom and right perpetual succession.

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Small Business Inventory Management System | Singapore Accounting Software

Small Business Inventory Management System | Singapore Accounting Software

Singapore Accounting Software aims to simplify business management system, in order to that they develop an inventory software.  It is designed to be as intuitive to use as possible, so after a speedy installation, you’ll be well organized your inventory processes within minutes.

The UBS inventory software made by Singapore Accounting Software has the following powerful tools and functions which helps management greatly in their daily operation function.

  • Different level of data access security
  • Real-time update of stock item
  • Multi-currency transactions, Multi-location reporting
  • Multi-delivery order to 1 invoice
  • Assembly of Bill of Materials
  • Detail B.O.M Reporting
  • Multi-Users, company, delivery address
  • Accurate costing method
  • Unlimited formula for stock computation
  • Serial number tracking
  • Forecast quantity of items
  • Multi-level of quick and fast search function of inventory
  • Inventory Profit margin reporting, Inventory aging report
  • Backorder inventory
  • Multi-level stock creation
  • Different tier discount grouping of items
  • Project or job item costing
  • Stock balance available at all billing
  • Stock adjustment
  • Prompt for items shortage during BOM assembly

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Different types of accounting software

Different types of accounting software

Depending on the type of operations, accounting & finance systems fall under four different categories. There are also wide-ranging accountings suites designed for enterprises that combine the finest features of every category. Here is a brief summary:

Payroll management systems

If looking to protect control over your account payables and account receivables, you must be looking for payroll management systems that will handle it all. These tools were developed to carry out a collection of different tasks, as well as calculating employees’ salaries, cutting deductions, depositing the salary directly into staff members’ bank accounts, producing tax forms, payslips and more. On the long run, they will make safe your financial transactions, cut expenses, and help set up detailed reports.

Billing & Invoicing systems

Billing and invoicing systems absolute companies’ basic, day-to-day tasks, including check writing and informing customers of their due payments. They are significant to preserve control over the accuracy of accounting figures and make service look more specialized and believable to the end-recipient. On the company’s side, billing and invoicing tools help document finance activity and arrange it for authorization and validation.

Enterprise resource planning systems

It is the most significant accounting software categories that combine all systems used for product planning, material purchasing, inventory management and control, distribution, accounting, marketing, finance, and HR. The latest ERP solutions also offer modules for CRM and business intelligence, so that the business can learn from its own practices and prepare enhanced strategies in the future.

Time & Expense management systems

These apps were designed to help accelerate billing cycles and grant expenses on the go, and are usually configurable sufficient for any company to adjust them to its operation pace. The core rationale behind them is to help gather payments faster and discover slow and ineffective practices that were not visible before. Their biggest advantage is being able to construct detailed graphical reports on how time and resources are being used in each company.

Custom Accounting Software

Sometimes, a business creates its own accounting software. This often happens almost by accident: as the business grows, knowledgeable staff may be asked to write software to handle various accounting situations until, after a time, the business may find it has created its own custom accounting software.

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Basic Elements of Singapore Accounting Software

Basic Elements of Singapore Accounting Software

Basic Elements of Singapore Accounting Software

Singapore accounting software provides our customers with a superfluity of world-class Singapore accounting software.  Our MYOB accounting software and other brands of accounting software in Singapore facilitates speedy sales processing whereas our Sage_Ubs accounting software offers easy features and ensures great flexibility. As your top accounting solutions provider, we strive to offer the highest quality service to maintain competitive advantage.

These are the basic elements we consider while designing our accounting software for your business:

  • Cost
  • Ease of use
  • Timesaving features
  • Reporting capabilities
  • Mobile access and mobile features
  • Accountant access
  • Service limitations, including the number of customers, invoices, users, transactions packages allow
  • Customer service
  • Additional services like credit card processing, tax preparation and payroll services
  • Integration with third-party apps


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