From 1 January 2024, the Goods and Services Tax (“GST”) in Singapore was increased from 8% to 9%. 

The GST rate chargeable on the supply will be the prevailing rate at the time of supply. The time of supply for most transactions is triggered by the earlier of the following two events: 

  • When payment is received 
  • When an invoice is issued 

GST-registered businesses need to know when their supplies are delivered or performed, in addition to the invoice date and payment date, to determine whether and how the transitional rules would apply to a supply spanning across the date of rate change. 

A transaction spans a GST rate change when one or more of the following events straddles the date of the rate change: 

  • The issuance of an invoice
  • The receipt of payment
  • The delivery of goods or performance of services. 

For more information on the transitional rules with respect to the GST rate changes, please contact us.  

Related blogs:

Goods and Services Tax (GST)

Singapore tax treatment of gains from sale of foreign assets

Contact Us

At Sheltons Accountants Singapore we have extensive experience in providing Singaporean and international tax advice. This includes advice on tax treaty issues and cross-border tax efficient structuring.

If you need advice or assistance with your Singaporean tax obligations, or if you would like us to prepare your Singaporean tax returns, we’re here to help.

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

Sheltons Singapore

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With effect from 1 January 2024 Singapore will, under certain circumstances, treat gains from the sale or disposal of foreign assets as income chargeable to tax under Section 10L of the Income Tax Act.

Prior to 1 January 2024, Singapore did not tax gains from the sale or disposal of assets that are capital in nature, whether they were foreign-sourced or Singapore-sourced.

However, foreign-sourced disposal gains are now chargeable to tax under the following specific circumstances:

  • the gains are received in Singapore from outside Singapore by a covered entity, and
  • the gains are derived by an entity without adequate economic substance in Singapore.

Entities that have reasonable economic substance and whose operations are managed and performed in Singapore are excluded. In this regard a distinction is made between PEHE and non-PEHE entities.

Pure equity-holding entities (PEHEs) are subject to less strict economic substance requirements. These are entities whose primary function is to hold shares in other entities, and that have no other income than dividends from or gains on the disposal of the shares.

Covered entities relate to “relevant groups” whereby:

  • the entities of the group are not all incorporated, registered or established in Singapore; or
  • any entity of the group has a place of business outside Singapore.

Note that the above represents a limited summary of the new Section 10L rules. Section 10L is complex and official guidance is still awaited. Professional advice is strongly recommended.

Contact Us

At Sheltons Accountants Singapore we have extensive experience in providing Singaporean and international tax advice. This includes advice on tax treaty issues and cross-border tax efficient structuring.

If you need advice or assistance with your Singaporean tax obligations, or if you would like us to prepare your Singaporean tax returns, we’re here to help.

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

Sheltons Singapore

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Sheltons Group Legal – an Australian law firm based in London

Investing in Australia?

Know your obligations under the new Register of Foreign Ownership of Australian Assets

From 1 July 2023, foreign investors have been required to notify the newly established Register of Foreign Ownership of Australian Assets (the Register) if they acquire interests in particular Australian based assets. Notice must also be given if an Australian entity, that held an interest prior to 1 July 2023, becomes foreign owned after such date.

The information stored on the Register is not publicly available, and its purpose is to give the Australian government greater visibility of foreign ownership of Australian assets.

The following are some of the types of interests which will require a foreign investor to give notice to the Register:

  • an interest in Australian land which is a freehold interest, a long-term lease (where the term including any options exceeds 5 years), or an interest in an exploration tenement
  • an interest in a share or unit of an Australian land corporation or trust or an interest in a share of the trustee of an Australian land trust
  • a registerable water interest, and
  • an equitable interest in a long-term lease or licence of agricultural land.

Generally, a foreign investor must give notice to the Register within 30 days after they acquire an interest, or if there is a change of at least 5% in the interest of an entity.

Civil penalties will apply if an entity fails to give notice to the Register within the relevant timeframes. Additionally, foreign investors may have ongoing notification obligations depending on the nature of the asset.

What does this mean for your business?

The implementation of the Register increases regulatory compliance for foreign businesses that plan to invest and operate in Australia.

It will mean that your internal procedures will need to be updated, especially if you are a business that undertakes a broad range of commercial activities within Australia.

***

If you’re looking to invest or establish operations in Australia, or if you’re an Australian entity looking to receive foreign investment, then feel free to let our London-based Australian qualified lawyers know and we can discuss how we can assist.

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

Sheltons Group Legal – legal services from Europe

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In Singapore, any income received from services provided or employment exercised within the country is taxable. This includes compensation received in the form of cash or non-cash benefits. Since the income is sourced in Singapore, it is subject to Singapore’s tax. Income tax is calculated on a preceding year basis.

The amount of tax and the applicable tax rates depends on the taxpayer’s tax residency status. Singapore has several tests in regard to whether a foreigner is a resident in Singapore. The key tests of relevance relating to a foreigner coming to Singapore are set out below.

You are a tax resident for a particular Year of Assessment if you are a:

  • Foreigner who has stayed/worked in Singapore:

– for at least 183 days in the previous calendar year, or
– continuously for 3 consecutive years, or

  • Foreigner who has worked in Singapore for a continuous period straddling 2 calendar years and the total period of stay is at least 183 days. This applies to foreign employees who entered Singapore.

To elaborate on the second point above, you will be regarded as a tax resident under the 2-year rule if you:

  • work in Singapore for a period straddling 2 calendar years; and
  • your employment period plus your physical presence immediately before/after your employment cover a continuous period of at least 183 days.

Note that the number of days of employment in Singapore includes weekends and public holidays. Any absences from Singapore that are temporary (e.g. overseas holiday leave) or incidental to your employment (e.g. business trips) are still counted in the total days of employment for the purpose of determining your tax residency status.

The income of tax residents after deducting allowable expenses, donations and personal reliefs is subject to income tax at progressive rates ranging from 0% to 22%.

Contact Us

At Sheltons Accountants Singapore we have extensive experience in providing Singaporean and international tax advice. This includes advice on tax treaty issues and cross-border tax efficient structuring.

If you need advice or assistance with your Singaporean tax obligations, or if you would like us to prepare your Singaporean tax returns, we’re here to help.

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

Sheltons Singapore

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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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