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Basic Guide To Taxation In Singapore

Individuals, corporations, trustees, and partnerships that are carrying on profession, trade, or business in Singapore are chargeable with tax. Fortunately for you, the country offers one of the lowest tax rates in the world.

Whether you are entering the country’s working scene as a local citizen, a fresh graduate or a foreign worker, you must familiarize yourself with the taxation regulations. Start by reading this guide…

AUTHORITY

The Inland Revenue Authority of Singapore (IRAS), formed in 1960, is the statutory board responsible for collecting personal income taxes, corporate taxes, goods & services taxes, property taxes, betting taxes, and stamp duties. In short, it integrates all the revenue collection agencies into one place in order for the processes to be managed better.

The governing laws include Income Tax Act, Goods & Services Tax Act, Stamp Duties Act, and Property Tax Act.

TYPES

For your reference, here are some of the most common types of taxes in Singapore:

INCOME TAXES are charged based on the income of individuals and companies.
GOODS & SERVICES TAXES (GST) are the tariff paid when you spend on merchandise, services, and imported goods.
PROPERTY TAXES are charged to the owner/s based on the expected rental values of the said properties.
BETTING TAXES are paid when betting on the lottery, sweepstakes, or alike.
STAMP TAXES are imposed on legal and commercial documents.

TERMS

To avoid confusion, here are some of the most common terms related to income taxes:

NOTICE ASSESSMENT (NOA)
– NOA shows the amount of income subjected to tax, calculates the tax amount you have to pay, and displays the credit balance that needs to be refunded to you. Simply, NOA is your tax bill.
YEAR OF ASSESSMENT (YA)
– YA refers to the annum in which the income tax is charged and calculated. It is a no brainer!
BASIS PERIOD
– Basis period refers to the previous YA that is relevant to the current YA.
PERSONAL RELIEFS
– Personal reliefs are good news as they are the deductions that help you to save tax.
ASSESSABLE INCOME
– Lastly, the assessable income refers to your total income after subtracting the approved donations and allowable expenses.

Image Credits: pixabay.com (CC0 Public Domain)

For more information about what is taxable and what is not, please visit www.iras.gov.sg.

Sources: 1, 2, & 3

Investment Basics: Bonds Versus Equities

BONDS

Just like some people, organizations and governments need to borrow money in order to function. An organization may need funds to expand into new markets while the government may need money to improve the infrastructures. However, some organizations need more money than the bank can provide. This is why they have to issue bonds to the public market. After which, a number of investors can lend a portion of the capital needed. So in a sense, bonds are borrowed money with a fixed and stable rate of return.

EQUITIES

For an aggressive investor that embraces risks, consider purchasing equities. Equities are the shares sold by companies. Buying equities means you become a shareholder – an owner of a percentage of the company. But if the company gets bankrupt, an equity investor will get the last claim on its assets.

PROS

BONDS

Including bonds to your portfolio provides you periodic interest revenue for a certain length of time. Since its interest rate typically does not change, you will know what to expect.
In an unfortunate event that the company goes bankrupt, bondholders are the ones who get paid first because they are creditors with the first claim on the company’s assets.
There are various types of bonds to choose from such as government bonds, zero-coupon bonds, and corporate bonds.

EQUITIES

Since equity investors become owners of a percentage of the company, they are equipped with the highest possible returns.
You can profit it different ways such as gaining from the increase in share prices or dividend income (if the company declares dividends).
Depending on how huge your shares are, you may have power to vote in the company’s decisions and issues.

CONS

BONDS

Since the market changes and the bond’s interest rate relatively remains the same, it can lead you to getting lower investment returns.
If you are keen to sell a bond with an interest rate that is lower than the current market rate, you will have to sell it at a reduced or discounted amount that what you originally paid for.

EQUITIES

Equities are volatile and riskier than bonds. As much as equities can give you the highest returns, they can also give you greater losses.
Unlike bonds, there is no guarantee of dividend payment in equities. Based on the current market and business circumstances, the company can choose whether it pays the dividends or not.

Image Credits: pixabay.com (CC0 Public Domain)

Sources: 1, 2, & 3

Genius Ways To Hide Your Cash In Case Of Emergencies

No matter how safe Singapore can be, unforeseen events in the form of natural catastrophes, bad power outage, credit/debit card decline, or even theft can happen. Whether you call it secret stash or emergency fund, keeping a substantial amount of cash in your home is a must to handle the demands of these unforeseen events.

As people get clever in time, the old “putting it under your mattress” trick does not work anymore! Instead, consider these Genius Ways To Hide Your Cash At Home:

1. CREATING FALSE STRUCTURES

If you have a knack for the tools, consider an intensive Do-It-Yourself project of faking fixtures around your house. You can install a drain pipe or a power outlet in your room that doubles as a secret safe. Worry not if you are not too good of a craftsman as some online shops sell installation-ready disguised safes.

For example, you may purchase the Hidden Wall Safe that acts as a non-functioning outlet with a hidden compartment to keep your valuables such as cash, cards, and jewelry.

2. DISGUISING IN PLAIN SIGHT

Keeping your money scattered in the most unexpected places is a good theft-proof strategy. Contemplate on the best places to hide your money where no one else would look. If you are an avid fan of books, pick a “random” book in your cabinet and cut a space in the middle where you can store your cash. Then, put it back where it belongs.

Here are other easy tricks you may follow:

a. Push the lint brush/roller’s handle up and put your cash inside.
b. Stuff your money inside a jar of cotton balls.
c. Put your money (rolled with a rubber band around it) inside an empty medicine or vitamins bottle and seal it well.

3. SWIMMING WITH THE FISHES

If you have a relatively large aquarium at your house, consider putting rolled up cash inside a watertight solid-colored jar inside it. Keep it hidden among the seaweeds, rocks, ruins, and corals so that it is as concealed as much as possible.

Image Credits: pixabay.com (CC0 Public Domain)

Alternatively, you may put your watertight jar of money inside the toilet tank.

Sources: 1 & 2

Best Credit Card Promotions To Usher In The Lunar New Year

Be a cheeky monkey who maximizes your prosperity with these great credit card offerings for the year 2016…

1. STANDARD CHARTERED

Standard Chartered rewards you with 15% CashBack wherever you feast this Chinese New Year. From 16th January to 15th March, you can get rebates once you are charged with a minimum of S$688 on your total spending courtesy of your credit card (not limited to dining bills).

Go to sc.com/sg/campaign/cardscny for more information about its Terms and Conditions.

2. HSBC

Aside from getting S$8 Hong Bao cash rebates daily with HSBC credit cards (till 29th February – T&Cs apply), you can enjoy a wide range of promotions from dining, shopping, and travel.

a. 15% off Yu Sheng and Pen Cai Takeaways
b. 15% off storewide when you shop at ZALORA Singapore
c. Up to S$50 off selected items at AngelFlorist.com
d. Additional 8% off bookings on Singapore hotels and more at Agoda

Simply go to hsbc.com.sg/cny for more details and other festive offers.

* EXCLUSIVE: SIGN UP FOR A HSBC’S REVOLUTION CREDIT CARD AND RECEIVE A SAMSONITE RED ROBO LUGGAGE 
WORTH S$335 OR A REDMART GROCERY VOUCHER WORTH S$80! T&CS APPLY. CLICK HERE FOR MORE INFORMATION.

3. DBS

DBS credit cards also reward you for your dining experiences. Here are some of their delicious offerings:

a. 20% off orders at foodpanda.sg. Valid until 22nd February.
b. 20% off the Lunar New Year Dinner Buffet at Brizo Restaurant & Bar – Park Hotel Clarke Quay. Valid until 22nd February.
c. 15% off lunch or dinner buffets at Grand Park City Hall. Valid until 19 February.

4. OCBC

OCBC credit cards will reward you with a tempting array of promotions that will keep you covered this festive season! These are my top picks:

a. 15% off takeaway CNY Treasures at Goodwood Park Hotel. Valid until 22nd February.
b. 10% off regular priced items at TAKA Jewellery. Valid until 28th February.
c. 10% off apartment and villa rentals in Asia and Europe courtesy of Roomorama. Valid until 29th February.
d. Get a Bioskin Radiance Bundle for only S$38. Valid until 29th February.

Image Credits: facebook.com/OCBC.Singapore

Visit ocbc.com for more information about the Terms and Conditions.

Women in Singapore Struggle with Personal Finance, According to S&P’s Financial Literacy Survey

In Standard & Poor’s recent Global Financial Literacy Survey, it was found that a lot less women in Singapore know their way around personal finance than men.

67 per cent of men surveyed hit the threshold for being financially literate while only 52 per cent of women did so. This difference is one of the largest in the world.

While women make up the majority of university graduates, they still fall behind in financial literacy in 128 out of 143 countries. The participants were given a 5-question test over financial concepts: numeracy, risk diversification, inflation and compound interest.

The survey, done over 140 countries with 150,000 respondents, is one of the most extensive surveys done on financial literacy in history.

It also showed that Singapore has the most number of financially literate adults in Asia, at 59 per cent. Only 1 in 3 people in Asia could correctly answer the majority of questions–a number that is lower than the global average.

“We might have the highest number of financially literate people in Asia, but that’s still not enough. Basic concepts like compounding interest and percentages should be understood by all,” said Rohith Murthy, Managing Director of personal finance comparison website SingSaver.com.sg.

“Everyone should take an interest in controlling their own finances. The first step is to be aware of your expenses and where your money goes, then creating financial goals for yourself. Don’t sign up for financial products without fully understanding how it works,” he added. “Through education, Singaporeans can become more confident about making financial decisions.”

(This article is brought to you by SingSaver.com.sg)

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