IRAS Releases New e-Tax Guide on IPRs Valuation Report with Regards to Section 19B of the Income Tax Act

3 July 2018

The Inland Revenue Authority of Singapore (IRAS) released an e-Tax Guide on 28 June 2018 providing directions on when an independent valuation report on qualifying intellectual property rights (“IPRs”) is required for submission for the purposes of Section 19B of the Income Tax Act, as well as the necessary information required to be present in the valuation report.

This guidance is useful for companies that have incurred capital expenditure in acquiring IPR for use in its trade or business that qualify for writing-down allowances (“WDA”).

The document outlines the following:

  1. Requirement for the submission of a valuation report
  2. Information to be disclosed in a valuation report
  3. Record-keeping period

For more information, refer to IRAS’ Website.

Source: Inland Revenue Authority of Singapore

Singapore and Kenya Sign DTA Agreement

A comprehensive agreement for the Avoidance of Double Taxation (DTA) has been signed by Singapore and Kenya on 12 June 2018.

Some of the withholding tax rates under the DTA are as follows:

  • Dividends – 5%. Since Singapore’s domestic withholding rate for dividends is nil, dividends will be exempt from withholding tax in Singapore.
  • Interest – 10%. Exempted from tax if paid between the specified relevant government authorities of the contracting states.
  • Royalties – 10%

The DTA is currently awaiting ratification and does not have the force of law. The full text of the DTA is available on IRAS’ website.

Source: Inland Revenue Authority of Singapore

IRAS Withdraws Administrative Concession Relating to Withholding Tax on Related Party Services

Generally, local payers are required to withhold tax at the prevailing corporate tax rate of 17% on gross payments made to non-residents on services performed in Singapore that fall under Section 12(7)(b) and (c) of the Income Tax Act*.

As an administrative concession, companies are allowed to apply a lower withholding tax rate (i.e. lower than the prevailing corporate tax rate of 17%) on gross payment made for related party services performed in Singapore that fall under Section 12(7)(b) and (c) if certain conditions are met without the need to seek prior approval from IRAS.

This administrative concession will be withdrawn where the date of payment falls on or after 1 April 2018. 

The date of payment is defined as the earliest of the following dates:

  1. When the payment is due and payable based on the agreement or contract, or the date of the invoice in the absence of any agreement or contract (credit terms should not be taken into consideration).
  2. When payment is credited to the account of the non-resident or any other account(s) designated by the non-resident.
  3. The date of actual payment.

According to the Inland Revenue Authority of Singapore (IRAS), this administrative concession is being withdrawn due to low adoption.



*Extract of Section 12(7) of the Income Tax Act: 

12(7)(b) any payment for the use of or the right to use scientific, technical, industrial or commercial knowledge or information or for the rendering of assistance or service in connection with the application or use of such knowledge or information;

12(7)(c) any payment for the management or assistance in the management of any trade, business or profession;


Source: Inland Revenue Authority of Singapore (IRAS)

WCS Payout of over S$800 Million to more than 90,000 Employers

By 31 March 2018, over 90,000 employers in Singapore can expect to receive over S$800 million in payouts under the Wage Credit Scheme (WCS), as announced by the Ministry of Finance (MOF).

Small and Medium Enterprises (SMEs) are among the largest group of beneficiaries of the scheme, standing to receive 71% of the amount to be paid out.

By virtue of the WCS payouts, 20% of qualifying wage increases provided in 2015, 2016 and 2017 to over 600,000 Singaporean employees, will be co-funded by the Government.

First introduced in 2013 to help businesses to manage rising wage costs and to share their productivity gains with their employees, the WCS co-funds wage increases given to Singaporean employees up to a gross monthly wage of S$4,000.

Following Budget 2018, the WCS will be extended for three more years to 2018, 2019 and 2020. Government co-funding will remain at 20% in 2018 and progressively narrowed to 15% in 2019 and 10% in 2020.

According to the MOF, employers who provide qualifying wage increases to Singaporean employees in 2018, 2019 and 2020, and/or sustain qualifying wage increases given in 2017, 2018 and 2019, will be eligible for the payouts in 2019, 2020 and 2021 respectively.

Am I required to apply for the WCS payouts? Also, how will I know if I am eligible?

  1. Employers are not required to apply for WCS.
  2. Employers who are eligible for the payouts under the scheme, will receive letters from the Inland Revenue Authority of Singapore (IRAS) by 31 March 2018, notifying them of the total amount of WCS payouts that they will be receiving.
  3. Payouts will be received automatically in March of the following year, based on CPF contributions made to employees.

To check your eligibility, click here to visit the IRAS webpage on WCS.

How will I receive the payouts?

Eligible employers will receive the WCS payouts through the following means:

  1. Payouts will be directly credited into their GIRO bank accounts used for income tax and Goods and Services Tax (GST) purposes; or
  2. As cheques issued to them.

Can I make an appeal with regards to the payouts?

Yes, you may. You should submit your appeal to IRAS by 30 June 2018. Appeals will be considered on a case-by-case basis.

For further information, refer to the Ministry of Finance or Inland Revenue Authority of Singapore websites.

Source: Ministry of Finance, Singapore

GST e-Filing: CorpPass Will Replace EASY from June 2018

With effect from June 2018, CorpPass will replace the e-Services Authorization System (EASY), currently in use to authorize yourself, a staff or a third-party like a tax agent, as the only authorization system.

From June, you are required to possess a CorpPass account that is assigned with IRAS GST e-Services, to log in to myTax Portal to e-File your GST returns.

You will no longer be able to log in using your SingPass / IRAS PIN.

If you are a GST-Registered Company or Partnership, you will be required to set up a CorpPass Admin Account under your Unique Entity Number (UEN). This is required in order to authorize staff or third-parties to access IRAS e-Services on myTax Portal as well as other government’s digital services.

However, if you are a GST-registered sole-proprietor, or under GST Group or Divisional registration, you will need to set up a GST CorpPass Admin account under your GST registration number.

It is important to note that the GST CorpPass Admin account can only be used to authorise staff or third-parties to access IRAS’ GST e-Services, unlike the CorpPass Admin account, which may have already been set up under your business’ UEN for other government digital services.

For more information, please refer to IRAS’ website.

Source: Inland Revenue Authority of Singapore