Who the ratio covers
The two-page FAQ explains a fixed expense deduction ratio based on stakeholder discussions about average expense levels. It covers qualifying individual commission agents with annual commission income not above S$50,000. It is an expense deduction, not a 25% tax rate, and the individual scheme does not cover a partnership providing financial-advisory services.
Prefilled and manually reported income
Where an organisation provides income to IRAS, qualifying prefilled commission income receives the ratio automatically. Otherwise an e-filer chooses the applicable Nature of Business: Other Commission, Insurance Agent, Real Estate Agent, Broker for Stocks/Shares/Bonds, Broker for Foreign Exchange or Broker for Commodity Futures. A paper filer manually enters the income and expense figures. Income appearing on a return and electing an expense method should not be confused.
Actual expenses and supporting records
If actual allowable expenses exceed 25%, an eligible agent can replace the prefilled expense amount and claim actual expenses with records. Outside the simplified route, maintain daily records, receipts and supporting statements for five years from the relevant YA. Under the deemed-expense route, keep income listings even though expense receipts are not required to substantiate the ratio.
The historical simplified-record threshold
The FAQ describes simplified record keeping for revenue below S$100,000 over two financial years and notes the threshold rises to S$200,000 from YA 2021. These are separate record-keeping conditions; the S$50,000 fixed-ratio ceiling does not become S$200,000. Check the applicable simplified-record conditions for the actual period.
Changing the method and the no-expense example
The method may be chosen each year. After receiving the assessment, change the expense option by objecting within 30 days of the notice. The FAQ specifically says an insurance agent earning S$350 with no business expenses cannot claim the 25% ratio merely because income falls below S$50,000. That example limits the deduction; it is not an automatic deduction for every commission receipt.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗