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November 7, 2022

Everything You Need to Know About Deductible and Non-Deductible Expenses

A complete report of business expenses is expected when filing for corporate income tax in Singapore, as the Inland Revenue Authority of Singapore mandated. This covers resident and non-resident enterprises and requires them to declare all they have spent managing and growing their businesses. The declaration should include payments for advertising, renovation, wages, and CPF contributions, to name a few. But it is not something that you should be worried about. Do you want to know why? The IRAS does not allow deductions on all you have spent on your businesses. You are obliged to separate corporate costs into deductible and non-deductible expenses. If you want to learn everything related to business expenses, specifically deductibles and non-deductibles, continue reading this article.

Check out more details regarding deductible and non-deductible expenses in Singapore below. The information is sourced from IRAS, meaning this content is reliable and created with business owners in mind.

What Does Tax Deductibility of Expenses Mean?

Before we delve deeper into the criteria of deductible and non-deductible expenses, let us take time to understand when taxes are charged on business expenses. To clear the air, tax-deductible or deductible expenses are business costs that IRAS allow for deductions from earned income, thus reducing a Singaporean company’s taxable income. In other words, the tax-deductible expenses would lower taxes to be paid.

Meanwhile, non-deductible expenses are not part of an enterprise’s income tax bill. To be more exact, non-deductible expenses are to be added back to your taxable income if you have accounted for them in your financial statements. The IRAS disallows the deduction of these business expenses and you will not be able to enjoy deductions from your taxable income.

For example: If your company’s annual income is S$100,000.00 and it declares business expenses with an amount equivalent to S$20,000.00 (with S$15,000 deductible expenses and S$5,000.00 non-deductible expenses), then the taxable corporate income will be S$85,000.00. To achieve this, you must subtract the S$15,000.00 deductible expenses from S$100,000.00 of your annual income.

Understanding Deductible Business Expenses

Now that you have a good grasp on the overview of what expenses are charged taxes on by IRAS, it is the right time to dig a bit deeper into what qualifies as deductible expenses. In case you are hesitating about what you declare your company’s deductible expenses, here is the cardinal rule. According to IRAS’s published policy on business expenses, deductible expenses encompass costs that entirely and exclusively incur from all the company’s income-generating activities.

Note the accompanying conditions of deductions for business expenses from the list as follows:

  • Singapore’s Income Tax Act should not prohibit the deduction of the deductible business expenses
  • The expenses must be generated from the revenue and not business capital
  • No contingent liability of expenses, which means they should be incurred without the need to peg them on situations that may or may not happen in the near future
  • All expenses must be incurred purely for the sole purpose of generating business income
Understanding Non-Deductible Business Expenses

On the other hand, non-deductible business expenses are the direct opposite of deductible expenses. In short, the costs to be categorised as non-deductible should be incurred outside income generation. What exactly does it mean? Capital expenses like the funds spent on fixing assets, company incorporation, and personal expenses incurred by employees, including entertainment and travel costs, are considered non-deductible expenses.

Deductible Expenses For Business
  • Accounting fees
  • Administrative expenses
  • Advertisement costs
  • Auditors’ remuneration
  • Ad-hoc contributions to employees’ Medisave accounts
  • Bank charges
  • Cash spend in topping-up of Employees’ CPF Minimum Sums
  • Costs for periodicals and newspapers
  • Digital taxes imposed through turnover taxes (not income taxes)
  • Directors’ fees
  • Employee Equity-Based Remuneration (EEBR) Scheme payments
  • Employee’s income tax paid by the employer
  • Employment Assistance Payment (EAP)
  • Exchange loss (trade and revenue in nature)
  • Insurance costs for underwriting bad trade debts
  • Interest expenses
  • Interest incurred on late payment of fees to a Management Corporation for a Strata Title Plan (MCST)
  • Interest incurred on loans intended for re-financing previous loans or borrowings
  • Intellectual property (IP) licensing expenditure
  • Legal and professional fees incurred in trade and revenue transactions
  • Medical expenses
  • Motor vehicle expenses – including upkeep, maintenance, plus running and financing costs of goods / commercial vehicles
  • Office upkeep expenses
  • Payments for Insurance premiums
  • Statutory CPF contributions
  • Voluntary cash contributions to self-employed persons’ Medisave Account
Non-Deductible Expenses For Business
  • Acquiring fixed assets
  • Amortisation
  • Bad debts (non-trade debtors)
  • Bills before the commencement of business
  • Certificate of Entitlement (COE) for motor vehicles
  • Digital taxes imposed as income taxes
  • Dividend payments made on preference shares
  • Donations
  • Exchange loss (non-trade or capital in nature)
  • Fines
  • Goodwill payments
  • Impairment loss on non-trade debts
  • Interest incurred on late CPF contributions
  • Interest expenses on non-income-producing assets
  • Legal and professional fees for non-trade or capital transactions
  • Motor vehicle expenses for S-plated and RU-plated cars
  • Voluntary contributions to CPF
  • Singapore’s income tax and any tax on income in a country outside of Singapore
  • The installation of fixed assets

These are only a few of the costs under deductible and non-deductible business expenses. Should you wish to find the complete list, visit IRAS official website.

Talk to Us Today!

For reliable corporate solutions in Singapore, turn to ContactOne. Our services have been designed to suit our customer base’s needs. Whether starting or growing a business, we have proper solutions for that. Call us on +65 6333 0633 today!

August 24, 2022

4 Times ContactOne Professional Services Are Beneficial to Your Enterprise in Singapore

A business owner in Singapore can attest to the challenges of starting a business, let alone growing it. You need to comply with laws and regulations, and it is easy to lose track of it all if you don’t have the right support system. Lucky for you because many business solutions providers are here to work with you hand in hand for the overall betterment of your company. ContactOne is one of those providers you can rely upon when it comes to efficient corporate solutions. Having a professional team taking charge of every business’s needs, you can guarantee unrivalled services from ContactOne. From company registration to strike-off, this article will take you to an in-depth discussion about the benefits of ContactOne professional services to your company. If you want to know more, we suggest that you stick around. Continue reading below!

Excellent Services Without Breaking the Bank

Some businesses hesitate to consider outsourcing corporate solutions because of the upfront cost. Indeed, you have to allocate a portion of your financial resources to implement professional services. But consider these services an investment instead of treating them like an expense. And like other investments, it will compensate for the cost in the future if you work with a services provider with a proven track record like ContactOne.

There are many corporate service providers in Singapore, and what sets ContactOne apart from the rest are the services delivered with you always in mind. When starting a business, you are probably torn between entrusting your business’s registration to a third party or doing it on your own. Don’t let your hesitations deprive you of reliable services. If you sign up for any of our company registration services, you will spend less than expected.

ContactOne’s company registration subscriptions exclude all company registration services fees. You will only pay for the ACRA government fee and a discounted fee for the bundled services, including company secretarial, accounting, and tax services.

Tailored Services to Our Clients’ Diverse and Specific Needs

Business needs are never-ending, and with that, it is vital to work with a service provider that you can fully trust and deliver efficient solutions to your concerns. As a committed service provider, ContactOne will do its best to meet customer expectations through tailored solutions. We have an array of professional services to choose from, such as accounting and tax for emerging and small-to-medium enterprises.

These services are customisable, which means you can include the compilation of financial statements, payroll management, tax planning, corporate tax services, and GST filing submissions. Of course, it will always depend on your needs. If you want to learn more about ContactOne’s tax and accounting offerings, visit our website or talk to one of our representatives. They will take you to a detailed discussion regarding taxation and accounting.

Professional Assistance at Arm’s Reach

Business owners in Singapore prioritise achieving short- and long-term business goals, positioning their company in the industry, and most importantly, growing their business by focusing on key business elements. But it can be challenging to be on top of all this daily, with many things recurring in just a short span of time. The best way to address this is to outsource company secretary services from trusted service providers like ContactOne.

With professional assistance at the helm of your company, you can spend more time generating business income. ContactOne’s corporate secretary services are designed to help businesses in Singapore be on track with their annual returns to ACRA through a dedicated reminder service.

Although it is mandated by ACRA to hire a corporate secretary within six months of a company’s incorporation, Singaporean enterprises must not overlook this need regardless of compliance purposes. A qualified secretary is crucial to business operations, particularly administrative tasks. They are the face and representative of your company. And it is only fitting to give them an importance similar to other workforces that are keeping your company afloat amidst tight competition.

Strike-Off Made Easy

Closing a business is one of the things most business owners want to avoid. However, certain circumstances call for the overturning of a company in Singapore. It is practical to close down the business if it is no longer holding operations shortly. With all the outstanding liabilities or creditors, engaging a service provider is crucial to assist in the strike-off of the company’s name from the registrar. Debts usually make the deregistration process longer, but ContactOne got you covered.

Bring Convenience to Your Business with ContactOne’s Professional Services

ContactOne is a certified firm providing professional services to different businesses in Singapore and ACRA-registered to act on behalf of business owners in various areas of managing a corporation. Do you want to learn more about us and what we can do to help grow your business? Do not think twice about getting in touch with us. Our representatives are more than willing to help with your questions and enquiries. Or you may visit our comprehensive website and explore ContactOne professional services.

December 2, 2021

4 Things to Consider When Hiring Secretarial Services in Singapore

Everyone would agree that hiring the right talents paves the way to a profitable business. Among the employees that should be on board, your company is a competent and qualified secretary. Whether you manage a startup, run an existing corporation, or plan to penetrate the bustling Singaporean business hub, a corporate secretary plays a crucial role in a successful business venture. However, considering that you are in a competent and saturated corporate landscape, be reminded that your business can encounter several challenges that might distract success. In this circumstance, exploring all available avenues that could be helpful to push your business to be better is critical. One of the options you have is to consider hiring company secretarial services Singapore.

There are many providers of company secretarial services in Singapore. For that reason, hunting for one may be a tricky task. Even though top firms highlight the need for qualified individuals with the ideal skills, experience, and commitment, it is essential to look deeper into your needs and demands as a corporation. If you search for secretarial services, here is a list of things you need to consider:

1. Assess Knowledge of Rules and Regulations

One of a secretary’s many duties has something to do with providing legal assistance to a company. That is why it only makes sense to hire a service provider knowledgeable of Singapore’s laws and regulations. Other duties include maintaining an office set up, arranging annual general meetings, filing taxes, and maintaining company records.

2. Ensure Proper Qualifications

As businesses grow and develop corporate governance, the role of a corporate secretary also evolves. Outsourcing a service provider, as a result, is beneficial. It allows you to focus on core functions and strategic opportunities. So, make sure your corporate secretarial service provider meets proper qualifications.

Basically, these requirements are part of the standard procedure for hiring new employees or engaging with a service provider. The list below is just a suggestion and can be adjusted based on your business specifications. Make sure to consider them if you are switching service providers. (All these requirements are based on the Accounting and Corporate Regulatory Authority or ACRA).

  • Must be a resident of the country where your business is headquartered.
  • Must have several years of secretarial experience before the appointment; or
  • Must be a qualified individual as mandated by the law, or
  • Must be a public accountant registered under the law, or
  • Must be a member of Singapore’s Institute of Certified Accountants, Institute of Chartered Secretaries and Administrators Association of Singapore, the International Accountants Association Singapore, and the Singapore Institute of Company Accountants.
3. Verify Comprehensive Portfolio of Services

When hiring company secretarial services in Singapore, the third thing to consider is the provider’s ability to present a comprehensive portfolio of services. As a customer, you should know what you are paying for and understand what you are getting into. Apart from ensuring knowledge of laws and regulations and proper qualifications, it pays if your provider has everything you need.

There are many service providers of secretarial services in Singapore. If you want the best partner that can offer services designed to assist you with seamless business operation, turn to ContactOne Professional Services.

We are one of Singapore’s premier service providers of corporate secretarial services. We specialize in business formation, compliance management, accounting and taxation, payroll management, and other corporate administrative services for startups and small-to-medium enterprises.

4. Get the Value for Your Time and Money

We want to get the value for our money every time we spend on something. The same goes for hiring secretarial services. Funding a starting business is one thing. But in the long run, it becomes costly. Hiring a secretarial service provider will help you cut costs somewhere in your existing operations.

To be more cost-effective, engage in firms that can provide you with more than the standard secretarial services. Service providers in Singapore, like ContactOne, offer various services to help run your business better and unleash its full potential. Our services are tailored to our client’s unique demands and needs.

Company Registration in Singapore

Why does it pay to engage in company secretarial services Singapore?

Although investing in a permanent secretary for your business is often much costlier, the solution is more straightforward once incorporated. Still, there are various benefits when you outsource company secretarial services, especially in a competitive yet regulated market like Singapore.

With a company secretary, you will gain a trusted, accurate, and consistent management of administrative requirements. Most service providers deploy highly competent individuals with skills and efficiency.

You will be able to meet administrative needs with ease and convenience if you hire the right service provider of secretarial services. They will ensure that your business complies with Singapore’s stringent regulations and requirements.

The right firm will provide the secretarial services on time. One of the main reasons to outsource this type of service is that you can entirely rely on them to give the ideal secretarial service for your business.

You can cost-effectively access high-quality corporate secretarial services if you engage in a corporate secretarial service provider in Singapore. Not hiring an in-house corporate secretary will save you time and cost because you are not required to undergo the hiring process, training, and whatnot. Keeping these resources will confer your business a competitive advantage.

 

Wrapping Up

Keep in mind the four things to consider before hiring a company secretarial service provider in Singapore to guarantee the best results. If you hit everything on our list, you will end up with a dependable secretary, a partner in ensuring success for your business.

For more details about ContactOne’s services, call +65 8666 3633 for company registration and secretarial inquiries, +65 8877 2223 for AGM and annual return filing, or +65 8813 3833 for accounting and tax inquiries.