Heads up for 2020 – Business Compliance in Singapore
- Corporate Secretary: Compliance Changes in Singapore for 2020
- New Variable Capital Company (VCC) structure
- Data Alignment Exercise
- No more paper filing for Corporate Income Tax from YA 2020
- GST Payable on Overseas Digital Services from 1 Jan 2020
- Conditions for corporate tax residency in SG updated late 2019
- The current M&A tax allowance to end 31 March 2020
- Personal Data Protection Act (PDPA)
- NRIC Advisory Guidelines has gone into effect
- Expect more changes as PDPA pivots to accountability
- IPOS – Updates to Classification of Goods and Services
- Dependency Ratio Ceiling for Services sector now lowered
Welcome to 2020! It has been an intense start to the year; bushfires in Australia, escalating tensions between the US and Iran, and we’re only 2 weeks in. While we hope for better news and wait for Singapore Budget 2020 to be delivered on 18th February, here are the recent and upcoming changes that you should be aware of. as part of the Business Compliance in Singapore.
Corporate Secretary: Compliance Changes in Singapore for 2020
New Variable Capital Company (VCC) structureIn an effort to improve Singapore’s position as a funds hub, the VCC act was announced in September 2018. This highly anticipated corporate structure was originally planned to be operational by the end-2019, but due to unknown delays, we will probably see it in 2020 instead.
Data Alignment Exercise
From 2 Dec 2019, your name and address in ACRA’s records will be automatically updated to align with what is reflected on your NRIC/FIN. This exercise will be completed by June 2020. No further action is required.
A note for position holders who are foreign citizens: You must continue to update any changes to their names or residential address (local or foreign) by filing a change in personal particulars of officers via BizFile+.
No more paper filing for Corporate Income Tax from YA 2020
This is the most straightforward update; e-filing is now compulsory for all companies in Singapore from 2020. If you have a business owner friend who has yet to digitalize, please do connect them with us.
GST Payable on Overseas Digital Services from 1 Jan 2020
Overseas digital service providers are required to register for GST and charge GST if they meet these 2 criteria:
- Has an annual global turnover of more than S$1 million.
- Has sold more than S$100,000 worth of digital services to customers in Singapore in a 12-month period.
Should you be using an overseas vendor, or be a reseller of digital services, you may need to look further into this. For all our current accounting clients, our team will gladly provide you with more advice. If you’re not using our bookkeeping services, but are approaching S$1 million in revenue, please reach out to our client success team. We can ease the process of becoming a GST-registered company.
Source 1 | Source 2: IRAS – e-Tax guide | Source 3: GST on Imported Services
Conditions for corporate tax residency in SG updated late 2019
In general, to be a corporate tax resident of Singapore (and access certain benefits and exemptions), the control and management of the company has to be exercised in Singapore. Here’s what will now be taken into account, should your company apply for a Certificate of Residence:
- Have related companies in Singapore that are tax residents of SG or have business activities in SG.
- Receive support or administrative services from a related company in SG
- Have at least 1 director based in SG (who holds an executive position and is not a nominee director)
- Have at least one key employee (e.g., CEO, CFO, COO) based in Singapore
If you need assistance in getting a COR or would like more advice to meet the criteria, please feel free to reach out through your usual channels.
Source 1: IRAS – Applying for COR | Source 2: More on Tax Residency
The current M&A tax allowance to end 31 March 2020
The tax allowance (25% of acquisition value) was introduced in 2010 to encourage growth (both locally and abroad) in Singaporean SMEs. It was further enhanced in 2016, with the maximum allowance capped at S$10 million. Given the messaging around Budget 2020, and how the government will work to tackle economic slowdown, the M&A tax allowance is likely to be extended, though perhaps under different terms.
Source 1: The current M&A allowance | Source 2: The developments since 2010
Personal Data Protection Act (PDPA)
NRIC Advisory Guidelines has gone into effect
A gentle reminder: Companies should not indiscriminately collect, use, or disclose NRIC numbers from 1 Sep 2019.
Expect more changes as PDPA pivots to accountability
On 5 Jan 2020, the Deputy Commissioner (Mr. Yeong Zee Kin) mentioned new upcoming amendments during his speech in Zhuhai.
Source 1: Speech by Deputy Commissioner of PDPC (5 Jan 2020)
While we’re not yet certain of how the pivot towards accountability will affect businesses, you will be in a better position to cope with the new changes if you have a Data Protection Officer (DPO) and policies in place. Not having a DPO can result in costly penalties, so do contact us if you do not have a DPO for your organization.
IPOS – Updates to Classification of Goods and Services
Yes, you can now use the term “Related Services”.
Full details here.
Dependency Ratio Ceiling for Services sector now lowered
From 1 Jan 2020, it’ll be 38% instead of 40%. No changes for other sectors.
More details here.
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