Singapore Corporate Taxes 102: Auto Inclusion Scheme

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Our Singapore Corporate Tax lessons are back! (I know what you’re thinking… nothing says exciting like taxes). This time we’ll be talking about how employers in Singapore should handle tax forms for their employees. The IRAS is trying to digitize the entire system by introducing the Auto Inclusion Scheme this year and linking it to CPF contributions. In short, filing tax returns is going to be a smoother, more integrated process.

Under the Income Tax Act, there are four forms that employers should be aware of:

  1. Form IR8A: This is to declare income of all employees
  2. Appendix 8A: This form should be completes if the employee is provided with benefits-in-kind unless these benefits are exempted from Income Tax
  3. Appendix 8B: If the employee has benefited from any Share Ownership Plans, then this needs to be completed
  4. Form IR 8S: Must be completed if excess CPF contributions are made by the employer.

Explanatory notes on each form are here. Income tax returns must be filed for the following people:

  1. Full time resident employees
  2. Part time resident employees
  3. Non-resident employees
  4. Company director (including a non-resident director)
  5. Pensioner and
  6. Employees who have left the organisation within the financial year

For your reference, here are the tax rates for different income brackets:

Taxable Income Bracket Total tax on income below bracket Tax rate on income in bracket
0-20,000 0 0
20,001-30,000 0 2
30,001-40,000 200 3.5
40,001-80,000 550 7
80,001-120,000 3,350 11.5
120,001-160,000 7,950 15
160,001-200,000 13,950 17
200,001-320,000 20,750 18
>320,001 42,350 20

The Auto Inclusion Scheme is a system for recording employee income and tax related information for companies with 12 or more employees for the entire year, ending 31 December 2014. Companies have to submit employee information to IRAS electronically by March 1st of every year, starting from 2015. This way, companies do not need to distribute hard copies of the above forms for employees to file their income tax returns.

If employers use payroll software to generate payroll, then the software can be used to submit files to AIS using another (free) software provided by the IRAS called the Validation and Submission Application. The payroll software should meet the IRAS file format specifications in order to submit forms. The Validation and Submission Application software can be downloaded here.

Once every employee’s details are filled in through AIS, companies should inform their employees to file their tax returns through the myTaxPortal. Employees no longer need to fill in their income and details from the four forms above because the AIS system already has it stored.

Employers who have fewer than 12 employees are also encouraged to use the AIS by filling out this form and emailing it to ais@iras.gov.sg. After submitting the form, companies will also have to go through a trial exercise before joining the AIS.

The AIS system can be linked to CPF Data in order to fill up Form IR 8S easily. The system makes for smooth functionality across the IRAS and CPF platforms. To sign up for the AIS and CPF Data Link-up Service from 2016, this application form must be filled. For existing AIS members who want to use the CPF Data Link-Up Service, this application form must be filled.

Hope this helps! If you want to know how to pay up CPF contributions, we’ve got you covered. More on Tax Clearance and CPF contributions later.

Disclaimer: As always, consult your lawyer or accountant for advice! We are here to help, but your specific situation should be reviewed by a professional with complete knowledge of your situation. 

How to Get an Import License in Singapore

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How do you import the best ingredients for that awesome burger?

Scenario 1: Your restaurant is up and running. We’ve got your back with the liquor license. But now, you want to introduce a new segment to your restaurant: modern Japanese. You realize you need to import supplies in order to wow your customers.

Scenario 2: You are running a grocery store and want to sell imported products: meat, fish, eggs, processed food. Your supplies are coming in from all over the world and the suppliers are ready for business.

Your imported supplies need to be approved by Singapore Customs. You need an import license before you do anything else. How do you proceed?

Step 1: You need to register with Agri-Food & Veterinary Authority of Singapore (AVA). But before that you must make sure of the following:

  • Ensure that the imported products comply with the General Classification of Food and Food Products
  • Do note that importing fresh table eggs require an additional screening process to ensure that you have complied with the storage requirements. More on this here.
  • Make sure that the food establishment that is exporting food to Singapore is accredited by AVA. You can check here if the country or food establishment you are importing from is accredited by AVA.
  • An active Unique Entity Number (UEN) with Singapore Customs. To learn how to activate your customs account, click here.
  • A GIRO account for the payment of fees

Step 2: Submit an application to AVA through the e-licensing website. You can apply for a license to import meat, fish products, fresh fruits, vegetables and table eggs. To import processed food products and food appliances, you have to register on the same website (no license).

Step 3: You must pay for your license via GIRO

Here are the charges for licensing and registration fees:

License for Import/Export/Transshipment of Meat and Fish Products SGD 84/year Normal Service:
1 working day to processExpress Service:
Same day processing. Pay an additional fee equal to the cost of your licence
Licence for Import/Transshipment of Fresh Fruits and Vegetables S$378 per annum Normal Service:
1 working day to processExpress Service:
Same day processing. Pay an additional fee equal to the cost of your licence
Licence to Import Table Eggs Free 5 working days to process
Registration to Import Processed Food Products and Food Appliances Free 1 working day to process.

The process is straightforward and quick.

 

What To Do After The 3rd Store Grand Opening

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Success in your business would mean it’s time to expand, but this feat does not come without it’s own set of challenges.

After interviewing 3 different owners for our Retail/ Restaurant Executive Series, I’ve learnt that they all faced similar challenges in management, as soon as they’ve reached their 3rd store opening.

Here are some of the problems and solutions used by our retail/ restaurant executives when managing multiple store locations.

Keep Calm

Managing multiple locations means using technology to cut down on travel expenses

Implementing a different management system is necessary when you have several stores to oversee. Although it is not impossible, but it takes a lot of effort for you to constantly schedule your travel time to supervise different stores at different locations. Travel costs will pile up even more if your stores are located at different countries.

Getting your hands on free, cheap or available SaaS (software-as-a-service) solutions will be save your company a chunk of money. While some businesses have their own custom- built software platforms as collaborative platforms, some of the more commonly-used tools are available online and widely used by small business owners. Some of the best cost saving productivity tools are available online- free or at low monthly costs like Google Documents, Skype, PipelineDeals.com.

As mentioned by our retail executive Andrew Masigan, owner of The Advent Manila Hospitality Group in the Philippines, he advice that “the trick is to put the important systems in place… the efficiency your company’s chain-of-command largely determines
how well your stores operate”.

Managing multiple locations means having putting a system in place

You must have systems in place to be able to standardize the quality of your communications, products and results,” says Bert Martinez, founder of Bert Martinez Communications. Ensuring a strong internal system of operations would mean that you can save costs on training and reduce time required for supervision. Each employee will have a clear understanding of their responsibilities and boundaries.

In our interview with Adrien Desbaillets, President at SaladStop, he says that “a strong infrastructure is required to support the operation. Overheads start to escalate and a strong focus on SOPs, training, technology is required.” The point here is then to make each employee’s responsibility crystal clear through an organised structure and combine that with a system that measures each person. That way, everyone is accountable for delivering their work regardless of which location they are based at.

Managing multiple locations means shifting from micro management to systematized macro management

Before, Eileen Grey– owner of The Picture Company in the Philippines, didn’t need to think about an entire infrastructure when she opened her first store. She recalls it being just “very personal and mom and pop” until her 3rd store opening. Now she has to consider personnel training, back office space, production, logistics and others.

Having systems and technology in place is good for the business, but it wouldn’t help much if there is no focus on communication. Establishing good communication practices within the whole business is key to collaborate with offices at different locations, co-workers and clients.

Good tips to foster good communication between offices at different locations can include using webcams during weekly team meetings or webinars so team members can see each other, establish a daily reporting system online and use a centralized task management software like Asana, Trello and others.

(Read on how PayrollHero stays in sync with our other offices across the globe)


PayrollHero can help you efficiently manage your multiple business locations and cut down on costs. Talk to us about our business or meet us at our next Meetup!

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