Tax Bulletin, YA 2018

From YA2018, companies are required to complete a “Form for Reporting of Related Party Transactions” (RPT Form) as part of the corporate income tax return (Form C) submission if the value of RPT in the audited accounts for YA 2018 exceeds S$15m. 

The value of RPT is the sum total of:

  • all RPT (local and cross-border) reported in the income statement, excluding compensation paid to key management personnel and dividends and
  • year-end balances of loans and non-trade amounts due to or from all related parties.

The RPT Form is a one-page document and includes the following details:

  1. Name and location of ultimate holding company
  2. Value of the following RPT:
  3. Sale or purchase of Goods
  4. Service Income or payments
  5. Royalty, licence fee and other income and payments for intellectual property rights
  6. Interest income and expense
  7. Other RPT transactions not falling under (a) to (d)
  8. Year-end balances of loans and non-trade amounts due from/to RP
  9. Sale / Purchase of Goods and Services with top five foreign related parties (based on total sale / purchase value)

Digital tax notices

The Income Tax Act has been amended such that effective 26 October 2017, taxpayers who wish to continue receiving hardcopies of tax notices can “opt out” while others will start to receive digital tax notices instead.

Taxpayers are given the flexibility to manage their preference for hardcopy or e-copy of the tax notice.

Expiry of Productivity Innovation and Credit Scheme – 31 December 2017 (Year of Assessment 2018)

Beyond 31 December 2017, cost of automated equipment such as laptops, computers, smartphones, tablets etc, training fee/course fee expenditure will only qualify for a 100% capital allowance/ tax deduction.

Fixed asset expenditure, trademark registration costs incurred by a newly incorporated company prior to commencement of its business is deemed to be incurred on the day it commences its business (normally considered by IRAS to be when the company earns its first dollar of trade revenue).  This is to enable a newly incorporated company to be eligible to expenditure incurred on fixed asset outlay before it commences its trading/business.

For newly/recently incorporated companies who incurred PIC QE on automated equipment in 2015 or 2016 and have yet to earn its first dollar of revenue, if they do so by year 2017 (ie by YA2018 before the PIC Scheme expires), they would still be eligible to the 300% incremental claim or PIC cash payout (subject to conditions fulfilled in YA2018).  If the company earned its first dollar of revenue in YA2019 (beyond YA2018), it would only qualify for the 100% allowance/deduction.