Paying taxes is necessary for all businesses and individuals living in Singapore. For those who are well versed with the taxation procedures, there are a variety of ways to lower the tax bill. For those who are not familiar with the tax system, engaging the services of an accounting and audit firm in Singapore can ensure a lower tax bill.
The following are the major ten ways to pay fewer taxes in Singapore:
1. Get a Degree
Individuals who are willing to educate themselves and get an education degree can claim a significant tax relief scheme from the IRAS. When you enrol in a professional course, you could get up to $5,500 tax relief per year. Such an incentive not only allow you to save money but also improve yourself.
2. Start a Family
Many people assume that having a family will be a massive financial burden, hence they are hesitant about starting a family. The Singapore government encourages its citizens to have a family to support the growing population. As a result, there are many tax relief schemes available for families, such as Baby Bonus and other similar tax incentives.
3. Parent Relief
While Singapore is in favour of supporting a growing population, it also wants to take care of the issue of an ageing population. For this purpose, the Singapore tax incentives also offer relief for people who are living with their parents or taking care of their needs. Such tax reliefs vary from situation to situation.
If you are living with your parents, you can get up to $9,000 of tax relief, and if you stay apart but take care of them, you can get up to $5,500 tax relief. It is important to note that this tax relief is applicable to in-laws, grandparents, and grandparents-in-law.
By donating to a tax-deductible registered charity, you are not only bringing a positive change to the society but also subjecting yourself to a Singapore tax incentive.
You can claim tax relief of up to 250% when you donate cash to any registered charity. Businesses, especially large-scale companies that rely on the services of an accounting firm in Singapore, can easily find the names of such approved charities. You must make sure that the donation is IPC and part of the Singapore government.
5. Supplementary Retirement Scheme (SRS)
SRS was introduced in 2001 to support the ageing population and help them in setting up retirement plans. Over the years, SRS has greatly evolved and become much better. Now, Singapore citizens can expect significant tax incentives from this scheme. Once the individual reaches the age of 62, they can withdraw their fund and claim a 50% tax concession.
6. Special Account Payments
Making voluntary payments to a CPF special account is a highly useful way of lowering tax bills in Singapore because it also allows you to secure your financial future and save some money for retirement. You can get up to $14,000 in tax relief per year per couple. Moreover, a significant drop in the chargeable income is helpful in lowering the tax bracket.
7. Medisave Payments
Saving money in Medisave accounts with voluntary payments is a highly effective method of lowering your tax bill in Singapore. Not many individuals and companies know about this method. However, organizations that are getting professional services of audit and accounting firms in Singapore are able to enjoy such tax incentives.
8. Rental Property
If you have a rental property, then you can claim tax relief on the expenditure incurred on renting the property to tenants. Such tax incentives cover almost everything from insurance to the interest on your mortgage. In some situations, it can cover the repair and maintenance of the property as well.
9. Tax Relief for Expenses While Earning
Many people do not realize the fact that Singapore law allows them to claim expenses incurred in the course of earning the salary or wages. Getting such tax incentives in Singapore can be difficult, but it is not impossible.
Generally, you cannot get relief for MRT fares or meals, but you can get relief for employment expenses that have not been reimbursed. Such things include travel expenses and other subscription charges that you might have paid from your own money.
Moreover, if you are self-employed or running a small business, you can claim a variety of expenses like ongoing business expenses, research and development costs, and renovation charges. Accounting and audit firms in Singapore can also help businesses in availing such tax relief schemes to lower the tax bill.
10. Tax Incentive Schemes for the Corporate Sector
Apart from being known for low corporate tax, Singapore is also quite popular for providing a variety of tax relief schemes for various organizations and industrial sectors. Many popular tax incentives are offered via schemes like SUTE, PTE, BIPS, PC, and DTDi. You can use the help of an accounting firm or audit firm in Singapore to find a suitable tax relief scheme for your company.
In a Nutshell
The ten ways discussed above are some of the most reliable options for you to lower your tax bill in Singapore. These methods are not limited to individuals. In fact, they are useful for companies too. If you are still in doubt, consult with an accounting firm or audit firm in Singapore to find out how you can enjoy more tax incentives in Singapore. For more information, feel free to get in touch with us.