You can claim deduction for expenses that are wholly and exclusively incurred in the production of company income.

To qualify for the deduction, the expenses must:

• Be revenue focus in nature. This covers normal day-to-day expense but excluding capital expenditures
• Not be prohibited under the Income Tax Act
• Have actually been incurred. (Contingent liability should not be allowed for tax deduction)

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Singapore has adopted a single-tier corporate income tax system, which means there is no double-taxation for stakeholders. Tax paid by a Singapore tax resident company on its chargeable income is the final tax and all dividends paid by a company to its shareholders are exempted from further taxation.  Foreign dividend may be exempted if certain conditions are satisfied. 

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Payment of director's fee does not require the company to contribute CPF and SDL (Skills Development Levy). This is because, director's fee is deemed as a payment for the contract for service and should be considered as an employee's remuneration. However, if the directors of the company are also engaged under a contract of service, CPF contributions are payable on the salary received.

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Director fee is not paid by virtue of employment. It is paid to the director in the capacity as a director of the Board of Director.  As such, Director fee is taxable.  Director fee paid to non-resident director is subject to withholding tax at 24%.  

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Generally, people who stay within Singapore for at least 183 days in a calendar year are considered a tax resident. However, they may also be considered as resident under some other factors.  Staying for lesser than 183 days may also be subjected to tax, as non-resident. 

Short-term employment for 60 days or less within a calendar year may be exempted from tax. 

 

 

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In Singapore, a company is required to register for Goods and Services Tax (GST) when its taxable turnover at the end of the calendar year is more than $1 million or it expects its annual taxable turnover to exceed $1 million within the next 12 months. However, companies may also be required to register for GST under other factors.  Failure to register may result in hefty fines and legal consequences. It's important for businesses to understand their GST obligations to avoid any penalties and ensure smooth compliance with tax laws.

Companies may also opt for voluntary registration. 

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If your total revenue is more than S$1M and 90% of which is generated offshore, then your company must apply for a GST Exemption (GST F2 application) with IRAS to defer the need to conduct ongoing GST compliance.

There are two conditions to be satisfied for the above exemption:

• The proportion of your zero-rated supplies over total taxable supplies exceeds 90%
• You would be in a net refundable position had you been GST-registered

Going forward and in order to maintain this exemption, your company will need to constantly monitor your total offshore/international revenue to ensure that it continues to form at least 90% of your total revenue allocation.

At any time, if your offshore revenue drops below 90% (e.g., consistently for 3 months), then you need to inform IRAS and register for GST as soon as possible. It is also likely that IRAS will backdate the effective date of GST registration to the date where the offshore/international sales falls below 90%.

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If your company is GST registered, it means you will need to raise invoice with 9% GST for all local Singapore customers. Overseas customers are still subjected to GST at 9% for goods or services supplied in Singapore. Only goods for export and qualifying international services can be zero-rated (0% GST).

The GST that you charge and collect is known as output tax. Companies can also claim GST input for local suppliers’ invoices and will have to file for GST on a quarterly basis.

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