Outline Common Errors & Tax Obligations Correct Treatment Offences & Filing of Income Tax Penalties Returns Beauty & Beauty & Wellness Voluntary Keeping of Proper Disclosure Records & Accounts Industry Industry Case Study Q & A 2
Tax Obligations ��������� ��������������������� ����������� ��������������
Tax Obligations You are considered as a self-employed if you are carrying on a: Trade Business MR TAXMAN Profession Vocation 4
Tax Obligations Self-employed can be in form of: Normal Partnership Limited Partner Partnership Self-Employed Limited Liability Sole-Proprietor Partnership 5
Tax Obligations You need to file your Tax Returns (Form B/P) & make compulsory Medisave contributions 6
Tax Obligations Who needs to make Medisave Contributions? � If you are self-employed; and � A Singapore citizen or Singapore Permanent resident; and � Earn a yearly net trade income of > than $6,000 Net Trade income refers to your gross trade income less all allowable business expenses, capital allowances & trade losses as determined by IRAS � IRAS will issue a Notice of Computation (NOC) to inform you of your medisave contributions 7
Tax Obligations Do I You have to register with IRAS have to as a GST- registered person if: register - Your turnover exceeds $1 for million or GST? - You are expecting your turnover for the next 12 months to exceed $1 million Penalties may be imposed for failing to comply with Income Tax/GST Law requirements 8
Filing of Income Tax Returns Filing of Income Tax Returns 9
Filing of Income Tax Returns So, when will my business Your income will be taxed in income be the year following the year taxed? you earned the income. You should decide on your accounting period when you first started your business. Most accounting periods end on 31 December each year. 10
Filing of Income Tax Returns Report the business income in a summarized 4- line statement in your Form B/P as follows: • Turnover • Gross Profit/Loss • Allowable Business Expenses • Adjusted Profit/Loss 11
Filing of Income Tax Returns ������������ ����������� � �� !""#""" ��$�����������%�&�'(�������������� )����������������&�*&+����&�$��,���-����. �� /""#""" ��$�����������%�&�0(�������������� )�������������#�1�����2��,���-�3���#��*���4������ ��$������5��*&+����&�$��,���-����� � 6�4�����,���������,�����������������7��#����������������$��$�������� �����������,�*77��������&�8��$�$��$�����7��&���,���������������������7����� ������������ ����������� 9�� /""#""" �����,�������7����,��& �����������,�*77�����������&� ���������&�7�����������77�����������������&�7����7� 12
Keeping of Proper Hmmm…..How am Records & I going to keep Accounts proper records of all these?! 13
Keeping of Proper Records & Accounts Business owners are required to keep proper records and accounts of their business transactions for 5 years with effect from 1 Jan 2007 Records need not be forwarded unless called for verification. Improper records, merely approximate amounts, are not acceptable Failure to keep proper record will be subject to a fine not exceeding $1,000 and in default of payment to imprisonment for a term not exceeding 6 months 14
Keeping of Proper Records Keeping of Proper Records & Accounts Hmmm… I A record of receipts and wonder what payments, or income and kind of business expenditure records do I need to keep?? Source documents substantiate entries in your records e.g. Vouchers, invoices, receipts A record of the assets and liabilities of your business, including listings of your business debtors, creditors and cash/bank account balances 15
Keeping of Proper Records Keeping of Proper Records & Accounts Walk-in Customers Customers & Product who sign-up Sales for service packages Courses & Training Provided Sources of Income 16
Keeping of Proper Records �*3:� & Accounts Issue serially printed receipts and retain duplicate if gross income a year exceeds: • $18,000 from the sale of goods; • $12,000 from providing services Do not have to issue serially printed receipts if: - A cash register is used to record all cash sales - Invoices are issued for all credit sales OR - All sales are entered into an accounting software 17
Keeping of Proper Records & Accounts Keeping of Proper Records I don’t have a cash register or accounting software….how?! *�&����������� ;������ =�8�� ��7��&����8� �����7���,��� ��7������� 6�������&� ,������ 7���� 7������������� �&+��������� ��7��&����� ��&�7��&��� ����77�������� �����,��7�� ��8���������� ��������� ��,�4������� 7����7�������� &���������� ��7��&���������� 7��������< ��8����� ��������8����� 18
Keeping of Proper Records & Accounts What are the important details that an invoice should contain? INVOICE No. 1012 Invoice Date Business & Number. name, Address, Tel Date : 01/11/2017 Registration No. 10521924N No.32 Jln Angklong No. & Singapore 121432 Customer’s Tel No: 61234 123 Business Reg. To: Ms Angelina De Cruz Name & 5 Sunset Lane Fax No: 64561456 No. Singapore 123005 Address Unit Line Qty Item Description Discount Price Total Description of Services, Any Goods & Discount Total Price Discount Offered & Sub - Total Total Price GST * For GST-registered business, you need to Total issue tax invoices as required by GST legislation
Keeping of Proper Records & Accounts Keeping of Proper Records For Service Packages, a Customer Record Card should be maintained : As and when customer utilize the service of the package, the fees applicable to the service utilized should be recognized as income and reported for tax CUSTOMER RECORD CARD Customer’s Name, (Company’s name) NRIC no., Total Name : Amount Paid & NRIC : Total Amount Paid: Address Address : Description of Description of the service : Service & Expiry Expiry Date of Package (if any): Date of package (if No. of Service Date of Service Customer’s any) Signature 1 No. of Services 2 Entitled & 3 Utilization of Package (such as 4 customer’s 5 signature) 6 20
Keeping of Proper Records & Accounts Keeping of Proper Records Training & Courses Provided � Business Name, Address, Tel.No. Business Reg No.& Receipt No. � Receipt Date � Trainees’ Name � Course Title / Course dates � Total Course Fee Any fees or deposits paid for the course should be recognized as business income once the course commences unless the course is cancelled subsequently and a full refund is made. 21
Case Study 22
Case Study �������� ������ ���������������������� ���! �������� ������� ����� ����� �� ���������� ��������� "�������#����$������%&'�����������%()*�����+��������� "���������,��$�������%-'�����������%&**�����+��������� "�������#����$�� .���,��$�����������������%+*�����������%--*�����+��������� /��������������������� ���$�������������$���0� ��,��$�������������������������������%'**1�
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