Scope and historical edition
Published on 30 December 2020, this guide covers tuition providers and businesses assigning tutors. It describes five-year record retention, income-tax filing and payment within one month of assessment, self-employed Medisave and GST registration above S$1 million turnover or expected twelve-month turnover. Its filing channels, accounting-standard references and penalty descriptions belong to this historical edition; they are not a substitute for later rules.
Bank, sales and receipt controls
Separate business and personal bank accounts and retain statements. Record tuition fees, agency commissions, invoices, educational materials, returns and refunds. Serially numbered receipts with retained duplicates are required above S$18,000 goods income or S$12,000 services income, unless complete cash-register records plus credit invoices, invoicing software, or a daily cash-and-credit sales book provide the specified alternative control. GST tax-invoice duties remain separate.
Student cards, refunds and private stock
Invoices identify the business and customer, date and number, course or package, service period, discounts, refunds and total. Individual student cards track identity, subjects, package price, lesson entitlement and attendance or use. Enter refund amounts and reasons on the card and reflect them in subsequent invoices. Books taken privately are added to sales at selling price; GST-registered businesses may also need deemed-supply output tax where input tax was claimable.
Purchases and expense evidence
Retain supplier invoices and detailed receipts. Where no receipt exists, prepare a dated purchase voucher stating description and cost and obtain the supplier’s acknowledgement. Support transport with journey receipts, overseas travel with travel and accommodation evidence, entertainment with invoices rather than credit-card slips alone, payroll with vouchers or IR8A, CPF with statements, utilities with bills and rent with agreements and receipts. Consolidate the records regularly.
Assets, inventories and certified accounts
Keep purchase and disposal dates, costs, proceeds and contracts in a fixed-asset schedule. Capital purchases are not ordinary expense deductions. Count saleable books and materials at year-end; closing inventory becomes the next year’s opening inventory. Certified accounts comprise a profit-and-loss statement and balance sheet signed as true and correct by the proprietor, precedent partner or company director. Estimates without supporting records are insufficient.
Individual filing and assessment year
A sole proprietor reports trade income in Form B, or the relevant other-income section of Form B1; a precedent partner files Form P and partners report their own shares, including remuneration and other partnership receipts. Income is assessed in the following year. The guide gives paper filing by 15 April and electronic filing by 18 April, and asks businesses without a return or notification by 15 March to contact IRAS. A 31 March 2018 year-end corresponds to YA 2019.
Two-line and four-line statements
The four figures are revenue, gross profit or loss, allowable expenses and adjusted profit or loss. Revenue of S$200,000 or less uses the two-line revenue and adjusted-result summary. Below S$500,000, certified accounts need not accompany the individual return but must still be prepared and available; at S$500,000 or above they accompany it. GST-registered businesses exclude collected output tax from revenue and input tax from relevant purchases.
Upfront tuition packages and commission
The guide applies its then-current FRS 18 service-completion approach. Recognise package income for lessons delivered at the balance-sheet date and defer the amount attributable to unused lessons. At the end of the specified course term, recognise the remaining unused-lesson amount as earned income. Tuition fees and tuition-placement commissions belong in revenue; an advance cash receipt is therefore not necessarily fully earned immediately.
Gross profit and deductible expenditure
For service-only operations, gross profit equals revenue. With books, deduct opening stock plus purchases less closing stock: S$30,000 revenue, S$10,000 opening stock, S$5,000 purchases and S$7,000 closing stock produce S$22,000 gross profit. Expenses must be wholly and exclusively incurred to earn income. Wages, statutory employer CPF, business rent, utilities, advertising, repairs, public transport, business borrowing interest, accountancy and lease-renewal legal costs can qualify.
Private, capital and medical exclusions
Proprietor or partner remuneration, personal drawings, private medical costs and income tax are not business deductions. Private-car running costs, home commuting, capital purchases, depreciation, loan principal, private-loan interest, new-lease legal costs and penalties are excluded. The historical medical cap is 1% of employee remuneration, increased to 2% for specified portable-benefit or transferable-insurance arrangements. Qualifying renovation relief and capital allowances require their own rules rather than ordinary expense treatment.
Company ECI, return and start-up exemption
The edition requires ECI within three months of financial year-end, including a nil estimate, and Form C with accounts, tax computation and supporting documents by 30 November. It describes first-return reminders in the second year after incorporation and requesting Form C where the first accounts close earlier; non-31 December year-ends must be notified. Qualifying start-ups receive 75% exemption on the first S$100,000 normal chargeable income and 50% on the next S$100,000 for the first three YAs, subject to eligibility. These are the edition’s administrative instructions.
Capital allowance methods
Computers and qualifying automation equipment can receive a one-year write-off. Low-value assets costing no more than S$5,000 each are subject to a combined S$30,000 annual cap. Most eligible fixed assets can instead be written off over three years; the guide lists motor cars, motorcycles and light goods vehicles of 3,000 kg or below as excluded from that method. Its S$3,000 air-conditioner purchased in 2018 receives S$1,000 in each of YAs 2019–2021, with no further allowance from YA 2022.
Hire purchase: principal and source arithmetic
Separate deductible hire-purchase interest from asset principal. With a S$3,000 computer, S$300 deposit, S$600 interest and twelve S$275 instalments, four first-year instalments give S$1,200 principal including the deposit; the next eight give S$1,800. The source’s table prints S$1,400 for the first annual allowance, inconsistent with its own inputs and S$3,000 total; its following example correctly uses S$1,200. Spreading each principal tranche over three years gives S$400, S$1,000, S$1,000 and S$600 across four YAs.
Personal losses and cessation
After expenses and capital allowances, trade losses may offset other income of the same year. Unused losses and allowances may be carried forward; after the business ceases, losses may continue but allowances cannot. The guide also describes a one-YA carry-back of current unused losses and allowances, subject to qualifying conditions. These reliefs should be distinguished from merely reporting an accounting loss.
Company loss conditions and comparison dates
Company losses require at least 50% of issued shares to remain with the same shareholders at the relevant dates; unused allowances additionally require the principal activity to remain unchanged. For YA 2020 allowances used in YA 2021, the example compares 31 December 2020 with 1 January 2021. For the related business loss, it compares 31 December 2019 with 1 January 2021. Different dates therefore apply even where both amounts relate to the same assessment year.
Medisave and CPF relief
Self-employed Singapore citizens and permanent residents with annual net trade income above S$6,000 must contribute Medisave, subject to applicable rates and caps. Net trade income is determined after allowable expenses, allowances and losses. IRAS issues a computation notice and CPF handles payment. Relief for compulsory and voluntary contributions is limited to the lower of the applicable mandatory contribution rate on assessed business income and the annual relief cap; it follows contribution timing and CPF-supplied information.
Historical offences and voluntary disclosure
The edition states up to S$1,000 for inadequate records or failure to file, with up to six months in default of payment. Incorrect returns without reasonable excuse carry twice the understated tax plus up to S$5,000, three years’ imprisonment or both. Deliberate evasion carries three times tax plus up to S$10,000 or three years; serious fraud carries four times tax plus up to S$50,000 or five years. Its voluntary-disclosure discussion describes waiver within the filing-year window and 5% per back year capped at 30%. Some illustrated year labels are internally inconsistent; the core formula is distinct from those examples and the publication is historical.
Eight appendix templates and assistance
The appendices provide public-transport journeys, overseas travel and entertainment logs; payroll showing employee identifiers, remuneration, employer and employee CPF, SDL and FWL; a twelve-month expense schedule; an asset register with depreciation and disposal fields; stock quantities and costs; and a signed four-line accounts statement. Average book cost equals opening-stock and annual-purchase cost divided by the corresponding available quantities. The service section directs readers to myTax Mail, IRAS contact services, appointments and confidential tax-evasion reporting; the listed access methods and hours reflect 2020.
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.
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