Author: Lucy Beard

GST, also known as VAT, was introduced in Singapore on 1 April 1994 at the rate of 3%. This has progressively increased and currently it is at 8%. With effect from 1 January 2024, this will be increased to 9%. Only GST registered businesses can charge GST.

GST can be broadly classified into two categories:

– Taxable supply

  • Standard-rated supply
  • Zero-rated supply

– Non-taxable supply

  • Exempt supply
  • Out-of-scope supply

Standard-rated supply is when GST is charged at the prevailing rate by GST-registered businesses on all sales of goods and services made in Singapore.

Zero-rated supply relates to export of goods and the provision of international services where GST is charged at 0%.

Exempt supply includes the provision of financial services, sale and lease of residential properties and local supply of investment precious metals. No GST is charged on exempt supplies.

Out-of-scope supplies include supplies where the place of the supply is outside of Singapore. No GST is charged. Examples of out-of-scope supplies include:

  • Sales of goods delivered from a place outside of Singapore to another place outside of Singapore
  • Sales of overseas goods within a Free Trade Zone (FTZ)
  • Sales of overseas goods within Zero GST/Licensed warehouse
  • Private transactions

Compulsory GST registration is required under the following conditions:

  • Under the retrospective view, the taxable turnover is more than SGD1 million at the end of the calendar year, or
  • Under the prospective view, the taxable turnover is expected to be more than SGD1 million in the next twelve months

Taxable turnover refers to the total value of all taxable supplies made in Singapore, which includes standard-rated supplies and zero-rated supplies. Taxable turnover does not include exempt supplies, out-of-scope supplies and sale of capital assets.

Contact Us

At Sheltons Accountants Singapore we have extensive experience in providing Singaporean and international tax advice. This includes advice not only on GST but also on tax treaty issues and cross-border tax efficient structuring.

If you need advice or assistance with your Singaporean tax obligations, we’re here to help.

Simply send us an email at SG@SheltonsGroup.com.

Sheltons Singapore

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Singapore incorporated companies will be assessed on the requirement for audit based on the “small company concept”.

A company qualifies as a “small company” if the following are met:

  • It is a private company in the financial year in question

and

  • It meets at least two out of three of the following quantitative criteria
  1. Total annual revenue is less than or equals to SGD10 million
  2. Total assets are less than or equal to SGD10 million
  3. Number of employees are less than or equal to 50

For a company which is part of a group, in order to qualify for an audit exemption:

  • The company must qualify as a “small company” and
  • The entire group must be a “small group”

A group is considered a small group if it meets at least 2 of 3 of the quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.

The above “small company” audit exemption only applies to Singapore incorporated companies. However, for the purposes of determining whether the Group to which a company belongs is a “small group”, all entities within that group are taken into account, including foreign entities, in determining whether the consolidated total revenue, total assets and number of employees of the group meet the thresholds.

Contact Us

At Sheltons Accountants Singapore we have extensive experience in setting up and administering operations for overseas-based businesses. We provide a broad range of services, from setting up the entity and opening a bank account, to providing the legally required local director and a full range of tax, accounting, company secretarial and administrative services.

We are also experienced in providing local and international tax advice, advice on tax treaty issues and cross-border tax efficient structures.

If you need advice or assistance with UK, Singaporean or Australian matters, we’re here to help. Simply send us an email at SG@SheltonsGroup.com. 

Sheltons Singapore

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The legal system in Singapore and Australia is a common law system, ultimately inherited from England. However, the tax and legal differences between Singapore on the one hand, and the UK and Australia on the other, are often surprising to those in the UK and Australia setting up in Singapore. 

Here are a few examples. 

  • Company secretary #1. All Singaporean companies must have a company secretary. However, a company secretary is not needed for private limited companies in the UK and Australia. 
  • The need for a local director. All Singaporean companies must have a local resident person to act as director. Australia has a similar requirement but the UK has no such requirement. 
  • The private limited company – different names.  

UK Ltd (limited)
Australia Pty Ltd (proprietary limited)
Singapore Pte Ltd (private limited).  

  • Company secretary #2. All Singaporean companies need a local resident person to act as company secretary. 
  • Tax residency #1. A company incorporated in Singapore is not automatically a tax resident of Singapore. This contrasts with most other countries, including the UK and Australia – a company incorporated there is automatically a tax resident there. 
  • Tax residency #2. A Singapore company is only a tax resident of Singapore if it is ‘managed and controlled’ in Singapore. This test is easily satisfied. We will publish a separate blog on this. 
  • Due diligence. Singaporean banks and service providers are subject to strict ‘know your client‘ anti-money laundering due diligence requirements. At least in practice this is more demanding in Singapore than in the UK and Australia. Some may find the regime tedious – and it can be time consuming. 
  • Public officer. Neither Singapore nor the UK have the concept of public officer as is found in Australia. 
  • PAYE/PAYG. Singaporean employers are not required to withhold tax from employees salaries.  
  • Work visas. The handling of applications for work visas in Singapore tends to be significantly faster than the UK, and dramatically faster than in Australia. 
  • Territoriality regime. Singapore uses the territorial system of taxation. This compares with the global or worldwide system in use in the UK and Australia. In its pure form all that is taxed in Singapore is income that has its source in Singapore. So a Singapore taxpayer (including individuals and companies) are not taxed on income sourced outside Singapore. There are exceptions of course. (I suppose we should do a blog on this too)! 

Contact Us

At Sheltons Accountants Singapore we have extensive experience in setting up and administering operations for overseas-based businesses. We provide a broad range of services, from setting up the entity and opening a bank account, to providing the legally required local director and a full range of tax, accounting, company secretarial and administrative services.

We are also experienced in providing local and international tax advice, advice on tax treaty issues and cross-border tax efficient structures.

If you need advice or assistance with UK, Singaporean or Australian matters, we’re here to help. Simply send us an email at SG@SheltonsGroup.com. 

Sheltons Singapore

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Ned Shelton, Ivan Zammit, Stefano Oragano and Courtney Gleeson were thrilled to attend the ETL Global Conference 2023 in Berlin.

Sheltons have been a proud member of ETL GLOBAL for many years and the conference in Berlin was a great way to see other members representing various professional firms from around the world.

The main theme of the event was “Managing the Professional Service Firm”. A lot of emphasis was placed on practical knowledge and strategies that are implemented within the professional service firms that are part of the ETL GLOBAL network.

It was a wonderful opportunity to network with professionals, some old and many new faces! It is always great to connect with like-minded individuals and build on the relationships we have at ETL GLOBAL.

Ned, Ivan, Stefano and Courtney look forward to attending future ETL GLOBAL events and connecting with more members.

Ned Shelton (Managing Partner – Sheltons Australia, Sheltons Singapore, Sheltons UK)
Ivan Zammit (Partner – Sheltons Malta)
Stefano Oragano (Partner – Sheltons Denmark)
Courtney Gleeson (Partner – Sheltons Legal, Australia)

ETL GLOBAL – https://www.etl-global.com/etl-global-conference-2023-recap/
https://www.etl-global.com/ 

If you would like to speak to one of the partners, please visit our contact page.

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Sheltons Malta releases Fourth Edition of Bloomberg Country Tax Guide Malta: An essential resource for tax professionals and business owners

The fourth edition of the prestigious Bloomberg Country Tax Guide Malta, prepared by Sheltons has been released.

We cordially invite you to access the full publication through the following link: Country tax guide 2023

2023 Updates:

The 2023 updates cover the changes introduced in the latest budget measures, as well as a deeper analysis in certain areas. The most relevant chapters which have been impacted by these updates include:

About the Authors:

The authors behind the publication of the Bloomberg Country Tax Guide Malta, are Ivan Zammit and Brian Borg.

Ivan Zammit 

Ivan joined Sheltons in 2006 in Denmark and soon after became director in charge of our Copenhagen office. Ivan is nowadays the partner in charge of our Malta office while still being heavily involved in the Sheltons office in Denmark.

In 2020, Ivan, with assistance from our tax team, was honoured with the Bloomberg Tax International Tax Author Award, the first Maltese to receive this prestigious award.

After receiving his Adv. LLM in international tax law, Ivan accepted a position as a teaching assistant at the International Tax Centre (ITC Leiden) at Leiden University, The Netherlands, where he was involved in the ‘Fundamentals of International taxation’ and ‘Tax treaties’ courses. He continues to lecture on a regular basis on courses organised by ITC Leiden, with particular focus on Transfer Pricing. He also lectures yearly on the Advanced Diploma of International Taxation (ADIT) in various areas of international tax law.

Ivan advises private clients as well as multinational groups on a wide range of tax related areas typically involving cross-border activities. His specialisation includes:

  • Personal tax planning (especially upon relocation within the EU)
  • Transfer pricing
  • APAs, Tax rulings and opinions
  • Tax accounting for complex transactions
  • Best practice review for corporate income taxes

Ivan speaks English and Maltese and is fluent in Danish and Italian. He also reads Spanish and French.

Brian Borg

Brian joined Sheltons in 2017 and is a Senior Tax Manager at Sheltons office in Malta.

In 2019, Brian completed his professional education with ACCA (Association of Chartered Certified Accountants) and became a CPA (Certified Public Accountant) in Malta.

Brian works with both Maltese and international clients operating in Malta, assisting with a wide variety of tax, corporate, finance and accounting matters.

Brian speaks English and Maltese and is fluent in Italian.

About Bloomberg Tax & Accounting

Bloomberg Tax & Accounting provides comprehensive global research, news and technology services enabling tax and accounting professionals to get the timely, accurate, and in-depth information they need to plan and comply with confidence. Our flagship Bloomberg Tax platform combines the proven expertise and perspectives of leading practitioners in our renowned Tax Management Portfolios™ with integrated news from the industry-leading Daily Tax Report®, authoritative analysis and insights, primary sources, and time-saving practice tools. Bloomberg Tax technology solutions help practitioners simplify complex processes to better mitigate risk and maximize profitability. For more information, visit https://pro.bloombergtax.com

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Courtney Gleeson, Principal Lawyer of Sheltons Group Legal, joined the panel for the Australia-United Kingdom Free Trade Agreement seminar organised by the  Australia-United Kingdom Chamber of Commerce in London.

The event, held on 06 September 2023, was an opportunity for insightful discussions, valuable networking and the exploration of key provisions for the benefit of Small and Medium-sized Enterprises (SMEs).

Thank you to Australia-United Kingdom Chamber of Commerce for inviting Sheltons to be a part of such an insightful event.

 

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Sheltons Group Legal – an Australian law firm based in London

Entering the Australian market is a different ballgame – when you compare the corporate requirements of your head office or company location to that of Australia, there are likely to be considerable differences in how a company is required to operate!

Australian company law is an area our clients often have difficulty navigating, usually because they simply don’t have time to become well versed in it when their time is dedicated to running a business. However, corporate compliance is a really important area for company directors and businesses to be aware of. A lack of awareness can lead to liabilities, including personal liabilities, penalties, and generally compromising situations for businesses in the Australian marketplace.

What is corporate compliance?

The Corporations Act 2001 (Cth) (‘the Act’) is the primary Australian legislation that regulates compliance obligations and standards for both Australian companies and foreign companies that are trading in Australia. Among many matters, the Act prescribes the ongoing legal obligations required of all companies registered under it. Some key obligations include: maintenance of corporate registers; documenting various company decisions, and ensuring shareholder approval is obtained; annual declarations of solvency; filing financial reports; and notifying the public record keeper of particular changes to a company.

Many clients don’t realise that company directors have a duty to ensure that the company they are involved with complies with statutory requirements. Sheltons Group has been working with clients to ensure their company compliance for decades now. We’ve developed streamlined operations to help Australian companies easily meet company law requirements, every day. Sheltons Group Legal can take care of your corporate compliance, allowing you to maximise time concentrating on business activities.

Is your Australian company legally compliant?

If you have any questions about how to ensure your Australian company and business operations maintain good standing in Australia – we welcome you to contact us! We are glad to discuss matters which relate to your company specifically, or in general, and will work with you to ensure your company is legally compliant.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

Under recently introduced legislation, ‘casual’ employees in Australia have been granted a right to request the conversion of their employment to an ‘ongoing’ or permanent position – subject to certain criteria. This enables employees to take advantage of more extensive entitlements that have previously only been provided to ‘ongoing’ or permanent employees.

The difference between ‘casual’ & ‘ongoing’ employment

For the first time, casual employment has been specifically defined in Australian employment legislation as: an employee whose employer makes “no firm advance commitment to continuing and indefinite work according to an agreed pattern”.

In Australia, employment on a ‘casual’ basis carries different legal rights for the employee as compared to ‘ongoing’ employment: a term describing both part-time and full-time workers, i.e. those employed on a permanent basis.

A common example of a ‘casual’ employee might be a warehouse worker whose hours are not consistent or defined by a continued ongoing rota or roster. Conversely, an ‘ongoing’ employee might be administration or payroll staff who work the same agreed pattern of hours or days each week, with an expectation of continued work.

Distinguishing whether someone is a casual or ongoing employee can be blurry in some cases and will often depend on the factual circumstances of the arrangements.

Employers are now legally obliged to offer casual employees conversion to an ongoing position.

The measures introduced essentially focus on job security for employees. Where a casual employee has worked a certain period of time for the same employer, the employer must offer a conversion of their employment from casual to ongoing.

Why is the distinction of employees important?

Failure to classify an employee appropriately can leave employers vulnerable to ‘double-dipping’ claims. For example, where an employee who has already been paid casual loading under an agreement for casual employment later seeks compensation for unpaid leave and other entitlements owed to them as if they were a part-time or full-time employee on the basis that their employer had made an incorrect classification.

Incorrect employee classifications can also lead Australian Government regulators to impose penalties against the employer, and fines to backpay unpaid wages can easily bankrupt small businesses. So, if in doubt, now is a good time to assess the classification of employees in your business.

Sheltons Group Legal can assist you in ensuring your business has the ‘casual’ v ‘ongoing’ employment distinction correct and we would be glad to hear from you!

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

The Australian Fair Work Commission has determined there will be Australia-wide increases to the national minimum wage as well as to Modern Award minimum wages. The increases take effect from 1 July 2023.

Each year, the Fair Work Commission (‘FWC’) makes an order that covers subjects including the national minimum wage after considering factors relevant to the economy, employers and employees.

In the face of persistent high inflation, the Government’s federal budget earlier this year urged the FWC to ensure the Australian workforce to which the minimum wage applies does not suffer a wage-price spiral backwards.

Accordingly, the FWC’s Annual Wage Review 2022-23 announced that the national minimum wage would be increased by 8.6% and Modern Award minimum wages increased by 5.75%.

As a result, the national minimum wage has increased from AUD 812.60 to AUD 882.80 per week for full time employees (i.e. employees who work an average of 38 hours each week) – meaning the hourly minimum wage is now AUD 23.23. The Modern Award minimum wage increase means that pay rates above AUD 882.80 per week will increase by 5.75% per week.

Modern Awards are industry or occupation specific and apply to those performing work covered by the Award. As such, it is important to be aware that different minimum wage rates apply across different Modern Awards. 

Approximately 2.6 million employees across Australia are expected to receive the minimum wage increases. It is therefore essential that all employers take note of the increases to ensure each employee is being paid at or above the new minimum rates. Annualised salaries must be sufficient to absorb all statutory entitlements. 

If you would like further information about the Australian wage increases, or assistance in determining which Modern Award applies to your employees – please contact us.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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Sheltons Group Legal – an Australian law firm based in London

Is your business about to enter into an agreement or contract governed by Australian law?

It is really imperative that you are aware of the key terms and obligations that you’re committing to – and that you understand if what you are agreeing to is standard practice.

It is often the case that laws governing certain commercial arrangements in Australia are significantly different from those ordinary in the jurisdiction you are familiar with. Standard agreements that you may regularly adapt and use for business in other countries may not be suitable or enforceable in Australia.

Australian shareholder agreements, business acquisition or sale documentation, commercial property leases and agreements relating to the supply of products or services with others may be governed by national legislation, or by state-based laws and regulations depending on where the contracting parties might physically be located or where services are generated.

Sheltons Group Legal can review and advise on agreement terms before you proceed with any commitments.

Typically, most commercial contracts and agreements are favourable to the party that has prepared the governing document. It is important not to simply assume the terms and obligations have been included in a fair and equal manner.

Businesses caught in a litigious event usually find themselves in such situations by failing to record the terms of an agreement correctly or because of a laid back approach to entering into an agreement. Having a clear and concise written agreement in place should not just be a business consideration – it’s a must!

Sheltons Group Legal is able to assist with the preparation or review of any commercial agreements or contracts that your business might require. Having a written agreement in place documents the arrangements between the parties and ensures clarity for all. Clear articulation of the terms and obligations is crucial to avoid ambiguity and disagreements at a later date.

Courtney Gleeson
Lawyer
Sheltons Group Legal (London and Sydney)
C.Gleeson@SheltonsGroup.com

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