Revenue recognition is usually based on the agreement terms. For example, once the goods are delivered and accepted by the customers, then the revenue can be recognised.

Yes, you have to apply through OBLS.
For food imports AVA (Agri & Vetineary Authority) licence is needed. For Restaurants (food shop or coffee shop) National Environment Agency licence is needed. For food factories MOM, NEA licence is required.

Logo adds a professional look to your business. Your logo would explain your business fundamentals to the customer. If your company wishes to expand or obtain a brand image, it is advisable to register for trade mark.

Yes, a HDB house can be used as an office but it is subject to approval. You would need to apply for a home office scheme licence. Licence fee is currently SGD 25/- for 3 years. You can get more information about terms and conditions on the OBLS website.

Capital requirements are purely dependent on your business needs.

Your minimum capital must be SGD1/- and the maximum capital amount has no restrictions. It is advisable to have sufficient capital for your working capital.

Singapore Government supports SME’s in various ways. There are 160 types of Grants that are available in Singapore. For more details you can refer to www.spring.gov.sg.

Penalties are levied only if you are not filing the returns on time to ACRA, IRAS. Usually ACRA will impose fines for non-filing of Annual Returns or non-renewal of business on time. IRAS will impose fine for non-submission of returns on the specified time as well.

For individual /sole proprietor – April 15th
Partnership /LLP- April 15th
Private Limited company –Nov 30th

It is important for every business to keep track of the business expenses and cash flows.
Businesses can maintain the bank/cash books in Microsoft excel or a proper record book. It must be updated whenever money is received or paid.
Companies that are able to maintain a proper cash bank book, sales, receipts, purchases and payments will able to forecast and make several business decisions efficiently.

SME’s mean Small and Medium Enterprise.
By definition SME’s are firms that
Earn a revenue of not more than SGD 100 million per year
– Not employing more than 200 staff per year and
– Do not have assets worth more than SGD 200 million

In Singapore, audit of company is not compulsory if the company’s turnover is up to SGD 5 million if all the shareholders are individuals.
For turnovers less than SGD 5 million, the decision to be audited is made purely by the company’s management.
If your accounts are audited, banks will grant loans based on the audited accounts. It adds value to the company.
If your company is expanding or looking for investors, then audit
reports are handy to make decisions.

If one of the shareholders is corporate then audit is compulsory

Maintenance of the following records will help the accountant to complete work on time;
1. Sales invoice
2. Purchase invoice
3. CPF payment records
4. Salary vouchers
5. Bank receipt & payment vouchers
6. Bank statements
7. Petty cash payment vouchers

The company is required to file Form C or Form CS every year.
Company tax is to be paid accordingly, in the year end. For example, for the accounting year from January to December 2015, you must file your tax returns before November 2016. If the accounting year is from July 2014 to June 2015, you must file your tax returns before November 2016 as well.

Returns should be filed on or before 30th November.
January to December 2015 Accounts must be submitted to IRAS on or before 30th Nov
2016.

If you are familiar and are confident with tax related matters, then you can file it on your own. Otherwise, if unclear, seek professional tax consultants or auditors for advice.

Either the tax agent or director of the company can file tax returns, through online or by paper form.
If you are filing online, you would need a Singpass access, and the person filing tax, must be authorised with an easy access pin from IRAS.
If your company does not have an Easy Access Pin, you can apply through IRAS.

The benefits is that you do not need to pay fines, in the case that you do not meet the deadline. If tax forms are not filed, you have to pay fines as determined by the IRAS officer. In case of continuous default, you may be required to attend a court session, or serve a jail term.

Taxes can be filed through 2 methods; either online or paper form.

Essentially, every company must prepare the accounts before filing tax. After which, tax is filed through online or paper form. Up to a turnover of SDG 1 million, the company must file form CS online. If the turnover is equal to or more than SGD 1 million, the company must file form C. Also note that Form C, must be accompanied by the director’s report, statement by directors, balance sheet and detailed profit and loss account.

Corporate tax rates and rebates are decided solely by the Singapore parliament. Currently, Singapore companies enjoy a rebate of 30% on the tax payable.

The company is required to file tax returns under all circumstances, be it profit or loss.
If the company makes profits, then it has to pay prevailing corporate tax rates. If the company incurs loss, the losses can be carried forward to the next year, and can be offset against the income from the next year.
Current corporate tax rate is 17%

Deductible expenses refers to expenses incurred to earn income that is related to business.
All expenses must be incurred in relation to the company business.

Examples of some non-deductible expenses are personal expenses of director/shareholder, fines and penalties and expenses that are not related to business.

For a new start up, SUTE (start-up tax exemption is available for first 3 years of incorporation).
For net profit up to SGD 100,000, no tax is payable.
Above 100,000 SGD, corporate tax rate is 17%.
Assuming in the year 2015, net profit is SGD
100,000 or less, then zero tax is payable.
If the net profit is SGD 150,000 then the tax
calculations are as follows:
Net profit: SGD 150, 000
– Less: Start up exemption of SGD 100, 000
– Balance taxable amount: SGD 50,000
– Less: For first SGD 10,000, 75% exemption (SGD 7,500)
– Less: For balance SGD 40,000, 50% exemption (SGD 20,000)
– Total taxable amount after partial exemption is 17% of SGD 22,500
– Total tax payable is SGD 3,825 before rebate.

GST registration is done in two forms;
– Compulsory registration: If local sales (turnover) is SGD1 million and above, it must be registered for GST.
– Voluntary registration: Even if the turnover is less than SGD1 million, businesses can choose to register voluntarily.
– Professional firms/auditors can guide you on GST registration.

Director of the company must submit relevant forms to IRAS office to register. Director must complete the online course, “Before I Register GST”. Course details are available in www.iras.gov.sg

Professional firms may charge from SGD600 to SGD2000 depending on the complexity of the business.
No fee is to be paid to IRAS for registration

The law states that GST registration is compulsory when the local sales exceeds or is about to exceed SGD 1 million.
Non registration of GST is an offence. Penalty is equal to 10% of the tax due. Fine not exceeding SGD10,000/-

Registration of GST to be done with the IRAS department.
Advantages of GST
– GST paid by the company is claimed back.
– GST paid by the company is a profit to the company since it can be offset against the amount collected from the customer.

Disadvantages of not registering GST
– GST paid by a non GST Company is considered as expenses to the company
In case of non-registration of GST company may lose 7% of the GST paid on purchases.

If your local sales (revenue) is SGD1 million it is compulsory to register for GST.
If you are buying from local traders or importers you are already making payment of 7% towards GST.
When you choose to register for GST and if your purchases are SGD300,000 per year, then you will be paying GST of SGD21,000.
Meaning your total cost will be SGD321,000.
If you are selling the above items to your customer for SGD500,000 then your profit will be SGD179,000/- if your company or business is
not GST registered.
If your company is GST registered then your profit will be SGD200,000/-

Either individual or corporation who invest in the company. Usually called owners of the company.

Appointed by the company to audit the company accounts.

An individual appointed by the directors, shareholders of the company to comply the company law matters. Please refer question number 47 for more details.

Example of assets are Cash, Bank balance, Accounts receivable. Inventories, Vehicles, Properties etc.,

The amount owed or payable to others by the company. Example salary payable, rental payable, payable to suppliers etc.,

Amount of money invested by the owners for the working capital and to spend for company related matters.

Amount of revenue earned by doing services or supply of goods by the company.

Amount spent by the company for purchase of goods, rental, salary, travelling expenses etc.,

Amount received from the Government agency for business development purpose subject to the approval of the relevant agency

Company neither makes profit nor loss. In short, amount of revenue equals to the expenses.

Surplus (positive) balance from Revenue minus all expenses.

Deficit (negative) balance from Revenue minus expenses

Balance of Sale (Revenue) minus Cost of Goods represent gross profit.

Income of the previous year of the company will be assessed in the next year. Example January to December 2014 (previous year) will be Assessed in 2015 (Assessment year).

Usually accounting year of the company.

Refers to company’s accounting year.

Every company must contribute for pension fund managed by Central Provident Fund Board for Singapore citizen and permanent residence.

IRAS – Inland Revenue Authority of Singapore Authority that manages personal income tax, corporate taxes, GST and other related taxes.

ACRA – Accounting and Corporate Regulatory Authority.
Authority that manages the company, business related matters.

URA-Urban Re development Authority
Authority that manages the urban development of Singapore.

HDB – Housing Development Board
Authority that manages the government housing schemes.

MOF – Ministry of Finance
Authority that manages the finances of Singapore and monitor the company law policies.

NEA – National Environment Agency
Authority that regulates the environment pollution, Food establishment.

OBLS – Online Business licencing Singapore Web portal for application of various business licences.

AVA – Agri and Veterinary Authority
Authority that regulates food safety and import of food related matters.

PIC – Productivity and Innovation credit Government scheme introduced to improve the productivity for the local companies.

SDL – Skills Development levy Every employer contribute to WDA every month a certain percentage based on the gross salary.

WDA – Work force development authority Authority that provides training to the local workforce.

Valuation of the company is used to determine the price for sale of company or business. There are several valuation techniques used by the experts based on the type of business.

Cost of goods or services arrived after adding the purchase cost of various materials or services plus relevant expenses in order to know the final product or services cost.

Ratios are used for comparison purpose. Example to determine the Gross Profit t margin or Net profit t margin, ROI and more as well to compare the previous year performances.

Company share capital is eaten up by the accumulated losses.
The losses are more than the capital.