IQS LOCAL VARIATIONS ICSA PROFESSIONAL PROGRAMME PART 1 SINGAPORE TAXATION Aim The Chartered Secretary practices within the setting of both strategic operations (boardroom) and professional public practice. A command of the concepts and practices of Singapore Taxation is crucial to fulfilling these responsibilities. The aim of this module is to develop a thorough knowledge of current legislations relating to taxation and its practical applications to companies, partnerships and individuals and to equip the skills necessary for the Chartered Secretary in providing professional advice and guidance. Pre-requisite learning This module is a component of the ICSA Professional Programme Part 1. It is designed to enable aspiring Chartered Secretaries to: demonstrate the requisite standards of competence for professional practice in a key discipline, and acquire essential knowledge and skills to underpin the relevant components of the Professional Programme. Evidence of assessed knowledge and understanding must be demonstrated through the examinations, or those of equivalent qualifications which have been approved as meeting the Institute s required curriculum and standards. The module specification is based on the assumption of some relevant prior learning in financial accounting. Learning outcomes At the conclusion of this module, the candidate will be able to: understand the fundamentals, concepts and practical application of taxation principles; understand and apply taxation principles and regulations to contribute to boardroom decision making understand and apply taxation theory and best practice in contributing to corporate tax management and planning. 1
Learning content There are main areas within the Singapore Taxation syllabus and candidates will need to prepare effectively for this examination. Basic Tax Concepts Tax Administration Income and Deemed Income Deductions Capital allowances/wear and Tear Allowances Unincorporated Businesses Personal Reliefs and Tax Rebates Taxation of Employees Taxation of Business Taxation of Overseas Income Taxation of Non-Residents Outward and Inward Investments Corporate Restructuring, Mergers and Liquidation Taxation of Specialized Businesses Investment Incentives Trusts, Settlements, Estates and Estates Duty Tax Avoidance and Tax Evasion Personal Finance Goods and Services Tax (GST) 1 Basic Tax Concepts Definitions of tax residence and determination of income the management of corporate affairs, setting administration in the context of strategic management and leadership Tax computation for a resident individual and for a company Prevailing tax rates for individuals, companies and non-residents 2 Tax Administration Role of IRAS Estimate of chargeable income Employers' obligations Appeals Offences and penalties 3 Income and Deemed Income Distinguish revenue vs. capital receipts Distinguish between income derived from profession vs. employment Sections 10/12 of the Income Tax Act Definition of Permanent Establishment and tax applicable Gains or profits from stock options Rent, royalties, premiums and any other profits arising from property Exempt income 4 Deductions Basic principle of deduction Revenue expense vs. capital expense Deductibility of expenses Certain disallowable expenses Certain deductible/further/double taxation expenses 2
5 Capital Allowances/Wear and Tear Allowances Capital and initial allowances for qualifying expenses Alternative to initial and annual allowances Balance allowances and charges adjustments Special rules on sale between related parties 6 Unincorporated Businesses Definition of unincorporated businesses Taxation of partners of a partnership/limited liability partnerships 7 Personal Reliefs and Tax Rebates Personal and earned income reliefs Wife relief Child/Handicapped family members Life insurance relief Taxation of husband and wife 8 Taxation of Employees Sources of employment income Tax liability Tax efficient benefits 9 Taxation of Business Capital allowances Unabsorbed losses/donations Deduction of losses against dividends Tax consequences of sole proprietorship and partnership 10 Taxation of Overseas Income Overseas income derived in Singapore Double taxation 11 Taxation of Non-Residents Withholding tax system Double tax relief not applicable 12 Outward and Inward Investments Withholding tax considerations for extraction of profits Deductibility of expenses 13 Corporate Restructuring, Mergers and Liquidation Different tax implications for different methods of business restructuring Voluntary liquidation S44 tax credits 3
14 Taxation of Specialized Businesses Income of investment holding company Operational headquarters Grants for business and manufacturing headquarters Taxation of finance and treasury centre/approved fund managers/approved securities companies Concessionary tax for approved oil traders/approved international traders/approved global trader programme/approved art and antique dealers/approved freight and logistics enterprises/financial sector incentive companies Tax exemption for approved international shipping enterprises 15 Investment Incentives Economic expansion incentives 16 Trusts, Settlements, Estates and Estate Duty Trust income Income from certain types of settlements Income from deceased person s estate Estate duty 17 Tax Avoidance and Tax Evasion 18 Personal Finance CPF savings in approved investments 19 Goods and Services Tax (GST) NOTE: Scope of GST Computation of GST Case law is an important part of tax law and candidates should be aware of the main principles brought out in leading cases in Singapore and its related legislation. A detailed knowledge of new legislation will not be expected in examinations held within six months of the passing of the legislations. Questions in this paper may require candidates to submit answers in the form of report and memoranda. 4
Study Materials and Resources Study Text Singapore Tax Workbook 2017/2018 20 th Edition by Sum Yee Loong Regulations Income Tax Act (Cap. 134) Economic Expansion Incentives (Cap.86) Agreement of Avoidance of Double Taxation Singapore -Malaysia Goods and Services Tax Act (Cap 117A) One tier Corporate Tax System Recommended Reading List CCH Asia Ltd Singapore Master Tax Guide Singapore Goods and Services Tax Guide COMPASS, IRAS Publication Web Resources The Inland Revenue Authority of Singapore www.iras.gov.sg The Ministry of Finance www.mof.gov.sg The Monetary Authority of Singapore www.mas.gov.sg 5