|
Q:
|
What is Taxable Income?
|
|
A:
|
For Singapore tax purposes, taxable income refers to:
gains or profits from any trade or business;
income from investment such as dividends, interest and rental;
royalties, premiums and any other profits from property; and
other gains that is revenue in nature.
|
Q:
|
What income is Taxable?
|
A:
|
A company is liable to pay tax in Singapore on income that is:
accrued in or derived from Singapore; or
received in Singapore from outside of Singapore.
|
Q:
|
What is Non-Taxable Income?
|
A:
|
Capital gains are not taxable. Examples of these are:
|
1.
|
gains on sale of fixed assets; and
|
|
2.
|
gains on foreign exchange on capital transactions.
|
Income Exempted from Tax
Certain types of income are specifically exempted from tax under the Income Tax Act, subject to conditions. Examples of these are:
|
1.
|
certain shipping income derived by a shipping company under Section 13A and Section 13F;
|
|
2.
|
foreign-sourced dividends, branch profits & service income received by a resident company under Section 13(8); and
|
|
3.
|
company's gains on disposal of equity investments under Section 13Z.
|
|
|
Q:
|
How to determine if the income is revenue in nature or capital in nature?
|
A:
|
Factors to determine whether trade exist
Nature of subject matter
|
Some property are normally regarded as the subject of trading while others are less likely to be regarded as trading when they are not bought in quantity.
|
Length of ownership
|
The shorter the holding period, the more likely it would be regarded as held for trading.
|
Frequency of transactions
|
High frequency of similar transactions is more indicative of trading than an isolated transaction.
|
Supplementary work
|
The additional work done on the asset/ property is more likely that the subsequent disposal would be regarded as trading.
|
Circumstances of the realization
|
Some circumstances are less likely to indicate trading.
|
Motivation
|
This refers to whether there was an intention to trade at the time of the acquisition of the asset/ property in question.
|
Mode of financing
|
Short-term financing is more indicative of trading than long-term financing.
|
Other factors
|
|
|
Q:
|
My company received a Government grant. Is the grant taxable?
|
A:
|
If the grant is given to supplement the trading receipts or to defray operating expenses of the company, it is treated as revenue in nature. The grant will be taxed as part of the gains or profits from the trade or business, unless exemption from tax is provided under the provisions of the Singapore Income Tax Act.
On the other hand, if the grant is given to the company to acquire capital assets, it is capital in nature and therefore, not taxable.
|
Q:
|
My company received donations. Are the donations taxable?
|
A:
|
If the donations are not voluntary gifts and are paid in return for benefits granted by the recipient organisation, these will become business receipts and constitute income that is taxable in the hands of the recipient.
|
Q:
|
Is income received in the form of digital tokens such as Bitcoins taxable?
|
A:
|
Remuneration or revenue received in the form of digital tokens (such as Bitcoins) is subject to normal income tax rules. The receipt will be taxable if it is revenue in nature, and non-taxable if it is capital in nature.
|
FAQ
