Individual Tax Filing is frequently known as Personal Tax Filing. It is the reporting of income derived by the individual (from employment, sole proprietorship, freelancing, partnership, etc.). In Singapore, personal tax is filed on preceding year basis (i.e. last year’s income is filed this year). The due date for filing the Individual Tax return is 15 April. The Inland Revenue Authority of Singapore (IRAS) has extended the due date for electronic filing of Individual Tax return to 18 April. Please do not mix up the due date for Individual Tax filing with that of Corporate Tax filing which is on 30 Nov (for paper filing) or 15 Dec (for electronic filing)
Who Should File an Individual Tax Return in Singapore?
Individuals who receive a tax return or filing letter from IRAS informing them to file their tax return are required to submit their tax return. Some individuals may receive a letter informing them that filing is not required if there are no changes to their Personal Reliefs claim. When they receive this letter, it means that IRAS will compute their taxes based on the employment income transmitted by their employer and the Personal Reliefs they claimed last year.
Low income earners or young individuals who did not have income in the past may not receive a tax return or letter from IRAS. However, if their annual income derived from Singapore exceeds SGD20,000, they are required to inform IRAS so that IRAS can send them a tax return or allow them to submit an electronic tax return.
No more Combined Assessment for Individual Tax Filing
In the past, married couple can opt for combined assessment where their income is added together for assessment. Combined Assessment is beneficial when one has taxable income while the other has losses. The losses can be used to offset the income to reduce the overall taxes. However, Singapore has removed the option of combined assessment some time ago and married couple’s income is assessed separately (i.e. Separate Assessment) now.
Common Personal Reliefs which you should know
The following Personal Reliefs are frequently claimed by individuals when they file their tax returns:
- Earned Income and NSman Relief: As long as you are earning non-passive income (e.g. employment income, business income, etc.), you can claim a relief of SGD1,000 to SGD8,000. Most of us will only claim SGD1,000 for this relief as we are not more than 55 years old. This relief is automatically given in your tax assessment. You do not need to manually claim for it. Similar to Earned Income Relief, the NSman Relief is also given automatically.
- Spouse Relief: If your spouse is living with you and her annual worldwide income does not exceed SGD4,000, you should be able to claim SGD2,000 (SGD5,500 for handicapped spouse) for this relief.
- Child Relief: If you have a child who is not more than 16 years old or is studying full time and does not have an income exceeding SGD4,000, you may claim for this relief (assuming other conditions are met). You may claim a relief of SGD4,000 for each child.
- Working Mothers’ Child Relief (WMCR): If you are a working mother and qualify for Child Relief, you should also qualify for WMCR. WMCR is calculated based on 15%, 20% and 25% of earned income for first, second and third and subsequent child respectively. Total WMCR and Child Relief (point 3) is capped at SGD50,000 per child. With the introduction of personal relief capping of SGD80,000 (effective in Year of Assessment 2018), it means that you may not be able to claim up to the percentage indicated.
- CPF and Life Insurance Relief: For Singapore Citizen and Permanent Resident, you can claim a deduction on your Employee’s CPF contribution. If your employer is under the Auto-inclusion scheme (e-filing of Form IR8A), this amount should have been transmitted automatically without you having to separately claim for it. If your CPF Relief is less than SGD5,000, you can possibly claim a relief on Life Insurance Premiums paid till the relief reaches SGD5,000.
- Course Fee Relief: If you have paid fees to attend a course relevant to your current employment, trade, business, profession or vocation, or leading to an approved academic, professional or vocation qualification, you may claim this relief up to SGD5,500.
- Foreign Maid Levy Relief: If you are married woman with maid, you can potentially utilize this relief. You can claim 2 times the maid levy you paid for one maid up to a capping of SGD6,360 for this relief.
- Supplementary Retirement Scheme (SRS) Relief: If you have made contribution to the SRS account through the SRS operator, the operator should have transmitted the contribution amount to IRAS for the purpose of claiming this relief. As such, you need not enter this amount in your tax return to claim this relief.
The above is applicable to Year of Assessment 2017 Personal Reliefs.
Personal Tax Return Preparation and Submission by SG Accounting Solutions
If you would like us to assist you in your Individual tax filing, please contact us at (+65) 6876 7906 or email us via the form shown on the right side of this page. Besides filing your personal income, we also provide accounting, corporate tax and GST filing services. We will be happy to discuss how you can offload your non-core or administrative functions to us. We have a group of tax accountants and finance professionals to guide you with all tax related and accounting related issues.