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Singapore Explains Changes To 2021 Tax Filing Rules

by Mary Swire,, Hong Kong

03 March 2021

The Inland Revenue Authority of Singapore (IRAS) has said that it will be sending tax bills directly to certain taxpayers this tax filing season and will be simplifying filing arrangements for the self-employed.

IRAS is introducing a Direct Notice of Assessment (D-NOA) initiative for taxpayers on the No-Filing Service (NFS), which will mean that they receive their tax bills directly from May 2021. IRAS said that this is possible as more information is automatically included and tax reliefs can be pre-filled for taxpayers. Taxpayers can still object to the assessment if they wish to make changes to their reported income and relief claims.

IRAS is extending NFS to certain self-employed taxpayers for the first time. Eligible commission agents and private hire/taxi drivers who have joined the Pre-filling of Income Scheme will be able to access NFS. Under the Pre-filling scheme, the self-employed taxpayer's income information is pre-filled in their tax returns. The scheme will be extended to other groups of self-employed taxpayers progressively. Taxpayers eligible for NFS will not be required to file a tax return, unless they wish to make any adjustments to their income details or relief claims.

To ease the tax filing burden for small businesses, the revenue threshold for completing the two-line statement, Revenue and Adjusted Profit/Loss, will be increased from SGD100,000 to SGD200,000 from the Year of Assessment (YA) 2021 for sole proprietorships. Sole proprietorships will need to report their business using the four-line statement – Revenue, Gross Profit/Loss, Allowable Business Expenses, and Adjusted Profit/Loss – only when their revenue exceeds SGD200,000.

IRAS will be digitizing most notices from May 2021. In line with IRAS's digital-first approach, approximately 720,000 taxpayers will be invited to receive their tax bills electronically this year, bringing the total number of taxpayers receiving electronic tax bills to over two million.

IRAS said that taxpayers who have been working from home can claim the incremental running expenses on electricity and telecommunication charges incurred for work purposes as tax deductions, provided these expenses are not reimbursed by their employers. Taxpayers can compare the bills before and after working from home, with the difference to be claimed as a deduction.

If there is more than one taxpayer working from home, IRAS will accept an equal apportionment basis in computing the amount of shared expenses across all working individuals in the same household. Taxpayers will have to retain expense records for five years and provide IRAS with the relevant documents upon request.

TAGS: individuals | compliance | tax | small business | business | proprietors | tax compliance | revenue guidance | Singapore | tax thresholds | tax authority | individual income tax

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