Q:
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What are the tax changes for YA2021?
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A:
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1.
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-Companies are given the option to claim the Renovation & Refurbishment (R&R) deduction in one YA (i.e. accelerated R&R deduction) instead of over three YAs for qualifying R&R expenditure incurred during the basis period for YA2021.
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2.
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Companies are given an option to accelerate the write-off of plant and machinery (P&M) over two years, instead of three years or over the prescribed working life of this asset, on the cost incurred in acquiring such P&M during the basis period for YA2021.
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3.
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Companies may elect for either the current carry back relief system or enhanced carry-back relief system for YA2021.
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Q:
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What income is taxable?
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A:
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Taxable income refers to gains or profits from any trade or business, income from investment such as dividends, interest and rental, royalties, premiums and any other profits from property, and other gains that is revenue in nature.
Income is taxable when it is accrued in or derived from Singapore, or received in Singapore from outside Singapore.
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Q:
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What expenses are deductible and what are the common tax reliefs and deductions for companies?
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A:
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You may claim tax deductions on expenses “wholly and exclusively” incurred in the production of income.
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Q:
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What is the common filing mistakes to avoid?
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A:
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1.
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Wrongful claims of non-deductible expenses such as interest expenses attributable to non-income producing assets or investments that produce exempt dividends and S-plated cars purchased for business use, including the cost of the car and the associated running expenses.
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2.
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Understatement of income e.g. omission of particular receipts or invoices issued or transactions settled in cash.
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3.
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Failure to keep proper records and accounts, resulting in the understatement of sales or overstatement of expenses in tax returns.
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Q:
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Preparing tax computation of an investment holding company?
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A:
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An investment holding company is a company that owns investments such as properties and shares for long term investment, and derives investment income (non-trade income) such as dividend, interest or rental income.
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