Illustrative Quality Control Manual

(external article. source: www.isca.org.sg)

About this publication:

This illustrative quality control manual (“IQCM”) serves to provide guidance to practitioners of small and medium-sized practices (“SMPs”) in their implementation of the Singapore Standard on Quality Control (“SSQC”) 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements.

The IQCM also includes guidance for implementing policies, procedures and controls for prevention of activities related to money laundering and the financing of terrorism, in accordance with EP 200 Anti-Money Laundering and Countering the Financing of Terrorism - Requirements and Guidelines for Professional Accountants in Singapore.

It is presented as the Quality Control Manual of a Singapore-registered public accounting firm, PA LLP (“the Firm”), prepared in accordance with the SSQC 1 and EP 200. The Firm is assumed to consist of two partners and not more than ten professional staff. It is not part of any network and has 200 assurance clients. All the clients are neither listed entities nor public interest entities.

To download a copy of the manual, or for more information, click here

 


 

Here are four key technology takeaways from Accountex 2018
(external article)

Author: Emma Smith
Date: 4 June 2018
Source: https://www.accountancyage.com/2018/06/04/four-tech-updates-from-accountex-2018/

1. IRIS acquisition of Taxfiler

Accountex coincided with a key announcement for IRIS Software Group, as it revealed the acquisition of Taxfiler, the cloud tax and accounts provider for small accountancy practices.

CEO of IRIS Accountancy Solutions Sion Lewis said that the acquisition provides “an exciting opportunity for us to offer a new generation of professionals tax and accounts compliance in the cloud using a product specific to their needs”.

He added: “We recognise the requirements and challenges of small practices are different to those of larger ones and look forward to simplifying the lives of more accountants to help them become more effective and productive.”

IRIS aims to provide small practices and tax agents with a “friction free, digital record compliance solution” by integrating Taxfiler with KashFlow and OpenSpace. This comes as businesses look to comply with Making Tax Digital.

Taxfiler founder James Reeves said that the cloud provider was “delighted to join the team and with the plans to accelerate product development and focus on best in class customer experience, we look forward to continuing to build the new generation of cloud-based compliance software for small practices.”

The acquisition means that IRIS will be able to support “every size of practice” – from micro businesses to SMEs to larger regional firms and the Big Four.

In recent months, IRIS has been named as a software agent for HMRC’s MTD pilot programme, and the first quarterly filing submission for MTD using IRIS Personal Tax has been completed. The technology provider has also launched Accountant Go – a practice-branded app enabling accountants to engage with their clients – and has acquired Star Computers in a bid to offer payroll and HR solutions within the IRIS Human Capital Management portfolio.
 

2. Sage update to MTD and GDPR related services

Announcing updates to its products and services at Accountex, Sage said that Sage Business Cloud Accounting and Sage 50cloud are ready for MTD with new functionality enabling OCR receipt capture, Stripe and Paypal integration, and an improved mobile experience.

The updates had brought “digitisation into natural day to day activities”, said Sage.

The company is also offering businesses flexibility when it comes to cloud adoption, with options available for embracing a “full cloud experience” or “keeping the familiarity of a desktop environment whilst taking those first steps to the cloud”.

With regard to compliance with GDPR, the Sage 50 Cloud Payroll contains a new Online Bureau, providing clients with a secure cloud portal to enter employee details, and timesheets and absences, while also giving access to payslips, documents and reports. The system “ensures protection for personal data”, as well as helping clients with GDPR requirements. It also reduces errors, saving businesses approximately one hour per client per week in time spent on administration.
 

3. Digital invoice capture with Compleat

Compleat Software announced the release of its self-service purchase invoice automation software iCompleatInvoice.

The Software-as-a-Service (SaaS) application combines digital invoice capture and approval automation to further the functionality of accounting software or enterprise resource planning applications. Compleat said that the system delivers real-time information for cash flow management, reducing administration costs by up to 90%. The software leverages AI and machine learning to automate between 60-80% of repetitive invoice coding and approval processes.

Neil Robertson, CEO of Compleat Software, said: “We believe it is time to offer businesses an affordable, competitive, self-service solution.”

He added: “To open a new market for end users and accounting practices, we used our highly successful procure to pay enterprise solution, eCompleat, for digital invoice capture to remove manual processes that add no value.”
 

4. Insight into MTD from Intuit Quickbooks

Research released by Intuit Quickbooks revealed that while 75% of UK accountants have heard of MTD legislation, 30% of these individuals were unclear on what the initiative means for their practice, highlighting a “disconnect between awareness of the legislation and an understanding of its implications”, the software provider said.

Currently, 33% of accountants’ clients use cloud accounting software, however, 23% have said that none of their clients use cloud software – emphasising that migration to digital platforms is the key concern of many accountants in the run up to MTD.

“Accounting has historically been an exercise of looking in the rearview mirror, but cloud technology empowers accountants with real-time insights that can be used to transform their role from bookkeeper to financial advisor,” said Nick Williams, head of business development, accountants, at Intuit QuickBooks.

“Introducing new client behaviour, educating staff and taking a proactive approach to forthcoming legislation isn’t always easy, but the time to get ahead is now.”

Dates for 2019: Accountex 2019 will take place at the ExCeL London on 1-2 May. Accountex Summit North will take place on 10 September 2019 at Manchester Central.

 

________

 


 

Budget 2018 - Overview of Tax Changes
(external article)
source: Inland Revenue Authority of Singapore

 

The following tax changes were announced by the Minister for Finance, Mr. Heng Swee Keat, in his Budget Statement for the Financial Year 2018, which was delivered in Parliament on Monday, 19 Feb 2018.

For full details of the Budget Speech, please refer to the Singapore Budget website.

For Individuals and Businesses

 Tax Change Summary  FAQ / Related Information

Extend the 250% Tax Deduction for Qualifying Donations

 

To continue to encourage Singaporeans to give back to community, the 250% tax deduction for qualifying donations will be extended for donations made on or before 31 December 2021.

 

All other conditions of the scheme remain the same.

Tax Treatment of Business Expenses (A - H)

Donations and Tax Deductions

 

For All Businesses 

 
Tax Changes  Summary  FAQ / Related Information 
Enhance and extend Corporate Income Tax ("CIT") rebate

To ease business costs and support restructuring by companies, we will enhance and extend the CIT rebate as follows:

 

 

a) For YA2018, the CIT rebate will be enhanced to 40% of the tax payable, subject to a cap of $15,000. This is an increase from the previously announced rebate of 20% of tax payable, subject to a cap of $10,000; and

 

 

 

b) The CIT rebate will be extended for another year to YA2019, at a rate of 20% of the tax payable, capped at $10,000.

Overview of Corporate Income Tax

Corporate Tax Rates, Corporate Income Tax Rebates, Tax Exemption Schemes and SME Cash Grant

Filing Estimated Chargeable Income (ECI) and Paying Estimated Taxes

Enhance the tax deduction for qualifying expenditure on qualifying research and development (“R&D”) projects performed in Singapore

To support businesses to build their own innovations, we will increase the tax deduction for staff costs and consumables incurred on qualifying R&D projects performed in Singapore from 150% to 250%.

 

All other conditions of the scheme remain unchanged.

 

This change will take effect from YA2019 to YA2025.

Tax Treatment of Business Expenses (Q - R) 

Enhance the tax deduction for costs on protecting intellectual property (“IP”)

To encourage businesses, in particular smaller ones, to register and protect their IPs, we will:

 

a) Extend the scheme till YA2025; and

 

b) Enhance the tax deduction from 100% to 200% for the first $100,000 of qualifying IP registration costs incurred for each YA.

 

This change will take effect from YA2019 to YA2025. 

Tax Treatment of Business Expenses (Q - R) 

Enhance the tax deduction for costs on IP in-licensing

To support businesses to buy and use new solutions, we will enhance the tax deduction from 100% to 200% for the first $100,000 of qualifying IP in-licensing costs incurred for each YA.

 

Qualifying IP in-licensing costs include payments made by a qualifying person to publicly funded research performers or other businesses, but exclude related party licensing payments, or payments for IP where any allowance was previously made to that person.

 

This change will take effect from YA2019 to YA2025.

Tax Treatment of Business Expenses (I - P)

Enhance the Double Tax Deduction for Internationalisation (“DTDi”) scheme

To further encourage internationalisation, the $100,000 expenditure cap for claims without prior approval from IE Singapore or STB will be raised to $150,000 per YA. Businesses can continue to apply to IE Singapore or STB on qualifying expenses exceeding $150,000, or on expenses incurred on other qualifying activities.

 

All other conditions of the scheme remain the same.

 

This change will apply to qualifying expenses incurred on or after YA2019.

 

IE and STB will release further details of the change by April 2018.

Double Tax Deduction for Internationalisation Scheme 

Adjustment to the Start-Up Tax Exemption ("SUTE") scheme

As we strengthen support for firms to build capabilities, we will adjust the tax exemption under the SUTE scheme to: 

 

a) 75% exemption on the first $100,000 of normal chargeable income; and

 

b) 50% exemption on the next $100,000 of normal chargeable income.

 

All other conditions of the scheme remain unchanged.

 

This change will take effect on or after YA2020 for all qualifying companies under the scheme. For example, if a qualifying company’s first YA is 2019, the current SUTE parameters will apply in YA2019 while the new parameters will apply in YAs 2020 and 2021.

Overview of Corporate Income Tax
 

Common Tax Reliefs that Help Reduce the Tax Bills
 

Corporate Tax Rates, Corporate Income Tax Rebates, Tax Exemption Schemes and SME Cash Grant

 

Adjustment to the Partial Tax Exemption (“PTE”) scheme

As we strengthen support for firms to build capabilities, we will adjust the tax exemption under the PTE scheme to:

 

a) 75% exemption on the first $10,000 of normal chargeable income; and

 

b) 50% exemption on the next $190,000 of normal chargeable income.

 

All other conditions of the scheme remain unchanged.

 

This change will take effect on or after YA2020 for all companies (excluding those that qualify for the SUTE scheme) and bodies of persons.

Extend the Business and IPC Partnership Scheme (“BIPS”)

To continue supporting employee volunteerism through businesses, BIPS will be extended till 31 December 2021.

 

In addition, MOF and IRAS will review the administrative processes for BIPS based on feedback that has been received. Details of any change will be announced in the second half of 2018.

Business and IPC Partnership Scheme (BIPS) 

 

Goods and Services Tax

 

Tax Changes   Summary FAQ / Related Information 
Introduce GST on imported services

To make sure that our tax system remains fair and resilient in a digital economy, we will introduce GST on imported services on or after 1 January 2020.

 

B2B imported services will be taxed via a reverse charge mechanism. Only businesses that: (i) make exempt supplies, or (ii) do not make any taxable supplies need to apply reverse charge. The majority of businesses make taxable supplies and thus would not be affected by this reverse charge mechanism. The reverse charge mechanism requires the local business customer to account for GST to IRAS on the services it imports. The local business customer can in turn claim the GST accounted for as its input tax, subject to the GST input tax recovery rules.

 

The taxation of B2C imported services will take effect through an Overseas Vendor Registration (OVR) mode. This requires overseas suppliers and electronic marketplace operators which make significant supplies of digital services to local consumers to register with IRAS for GST.

 

IRAS will release further details by end-February 2018.

GST on Imported Services

 

Stamp Duty

 

Tax Changes   Summary  FAQ / Related Information

Raise Buyer’s Stamp Duty on the Value of Residential Property in Excess of $1 Million

To improve the progressivity of our stamp duty regime, the top marginal Buyer’s Stamp Duty rate will be raised from 3% to 4%, and applied on the value of residential property in excess of $1 million. The revised rates will apply to all residential properties acquired on or after 20 February 2018.

 

stamp duty budget 2018

The Buyer’s Stamp Duty rates for non-residential properties remain unchanged.

Stamp Duty Basics for Property

Buyer's Stamp Duty (BSD)

Stamp Duty Basics for Property-Holding Entities

Buying or Acquiring Property-Holding Entities

Selling or Disposing Property-Holding Entities

Extend the tax incentive scheme for Approved Special Purpose Vehicle (“ASPV”) engaged in asset securitisation transactions (“ASPV Scheme”) To continue developing the structured debt market, the ASPV scheme will be extended till 31 December 2023, with the exception of stamp duty remission on the instrument relating to transfer of assets to the ASPV for approved asset securitisation transactions.

The stamp duty remission will be allowed to lapse after 31 December 2018.

All other conditions of the scheme remain the same. 

MAS will release further details of the extension by May 2018.

 

For Financial Sector

 Tax Changes Summary  FAQ / Related Information 

Introduce a tax framework for Singapore Variable Capital Companies (“S-VACCs”)

A tax framework for S-VACC will be introduced to complement the S-VACC regulatory framework:

 

a) An S-VACC will be treated as a company and a single entity for tax purposes; 

 

b) Tax exemption under Sections 13R and 13X of the ITA will be extended to S-VACCs; 

 

c) 10% concessionary tax rate under the FSI-FM scheme will be extended to approved fund managers managing an incentivised S-VACC; and

 

d) The existing GST remission for funds will be extended to incentivised S-VACCs.

 

The conditions under the existing schemes in (b), (c) and (d) remain unchanged.

 

The changes will take effect on or after the effective date of the S-VACC regulatory framework.   

MAS will release further details of the tax framework for S-VACCs by October 2018.

Enhance the Enhanced-Tier Fund Scheme under Section 13X of the ITA

To cater for more diverse fund structures, tax exemption under the Enhanced-Tier Fund Scheme will be extended to all fund vehicles constituted in all forms. Besides companies, trusts and limited partnerships, all fund vehicles will be able to qualify for the Enhanced-Tier Fund Scheme if they meet all qualifying conditions.

 

All other conditions of the scheme remain the same.

 

The change will take effect for new awards approved on or after 20 February 2018.   

MAS will release further details of the change by May 2018.

Extend the tax transparency treatment for Singapore-listed Real Estate Investment Trusts (“S-REITs”) to Singapore-listed Real Estate Investment Trusts Exchange-Traded Funds (“REITs ETFs”)

To have parity in tax treatments between investing in individual S-REIT and via REITs ETF with investments in S-REITs, the following tax treatment will be accorded to REITs ETFs: 

 

a) Tax transparency treatment on the distributions received by REITs ETFs from S-REITs which are made out of the latter’s specified income; 

 

b) Tax exemption on such REITs ETFs distributions received by individuals, excluding individuals who derive any distribution: 

   i. through a partnership in Singapore; or 

   ii. from the carrying on of a trade, business or profession; and 

 

c) 10% concessionary tax rate on such REITs ETFs distributions received by qualifying non-resident non-individuals.

 

Subject to conditions, the tax concessions for REITs ETFs will take effect on or after 1 July 2018, with a review date of 31 March 2020, which is the same as that for other tax concessions for S-REITs. 

IRAS will release further details on the application for the tax transparency treatment by April 2018. Revised!  

MAS and IRAS will release further details of the change by April 2018. Revised!

Extend and enhance the Financial Sector Incentive (“FSI”) scheme

To further strengthen Singapore’s position as a leading financial centre, the FSI scheme will be extended till 31 December 2023.

 

The scope of trading in loans and their related collaterals is expanded to include collaterals that are prescribed infrastructure assets or projects. The change will apply to income derived on or after 1 January 2019 in respect of new and renewal awards approved on or after 1 June 2017.

 

All other conditions of the scheme remain the same.

 

MAS will release further details of the change by May 2018.

Extend the tax deduction for banks (including merchant banks) and qualifying finance companies for impairment and loss allowances made in respect of non-credit-impaired financial instruments

To promote the overall robustness and stability of the Singapore financial system, the tax deduction under Section 14I of the ITA will be extended till YA2024 (for banks and qualifying finance companies with December FYE) or YA2025 (for banks and qualifying finance companies with non-December FYE).

 

All other conditions of the scheme remain the same.   

MAS will release further details of the change by May 2018.

Rationalise the Withholding Tax (“WHT”) exemptions for the financial sector

As part of the Government’s process to continually review tax concessions to ensure relevance and usefulness, the following changes are made: 

 

a) To ensure that the relevance of the tax concessions is periodically reviewed, a review date of 31 December 2022 will be introduced for the WHT exemptions for the following payments: 

   i. Payments made under cross currency swap transactions made by Singapore swap counterparties to issuers of Singapore dollar debt securities;

   ii. Payments made under interest rate or currency swap transactions by financial institutions;

   iii. Payments made under interest rate or currency swap transactions by MAS; and 

   iv. Specified payments made under securities lending or repurchase agreements by specified institutions; and 

 

b) The following WHT exemptions will be legislated, along with a review date of 31 December 2022: 

   i. Interest on margin deposits paid by members of approved exchanges for transactions in futures; and 

   ii. Interest on margin deposits paid by members of approved exchanges for spot foreign exchange transactions (other than those involving Singapore dollar).  

   The change in (b) will take effect for payments under agreements entered into on or after 20 February 2018. 

 

c) The WHT exemptions for the following payments will be withdrawn:

   i. Interest from approved Asian Dollar Bonds; and

   ii. Payments made under over-the-counter financial derivative transactions by companies with FSI-Derivatives Market awards that were approved on or before 19 May 2007. 

   The change in (c) will take effect for payments under agreements entered into on or after 1 January 2019;

 

Unless the WHT exemptions under (a) and (b) are extended, the WHT exemptions will cease to apply to payments that are liable to be made under agreements entered into on or after 1 January 2023. WHT exemptions will continue to apply to payments that are liable to be made on or after 1 January 2023, under agreements entered into on or before 31 December 2022.

 

All other conditions of the schemes remain the same.

MAS will release further details of the changes by May 2018.

Extend the Qualifying Debt Securities (“QDS”) incentive scheme and allow the Qualifying Debt Securities Plus (“QDS+”) incentive scheme to lapse

To continue supporting the development of Singapore’s debt market, the QDS scheme will be extended till 31 December 2023.

 

As part of the Government regular review of tax incentives, the QDS+ scheme will be allowed to lapse after 31 December 2018.

 

Debt securities with tenure beyond 10 years, and Islamic debt securities that are issued: 

 

a) After 31 December 2018 can enjoy tax concessions under the QDS scheme if the conditions of the QDS scheme are satisfied; 

 

b) On or before 31 December 2018 can continue to enjoy the tax concessions under the QDS+ scheme if the conditions of the QDS+ scheme are satisfied.  

MAS will release further details of the change by May 2018. 
Extend the tax exemption on income derived by primary dealers from trading in Singapore Government Securities (“SGS”) 

To strengthen our primary dealer network and encourage trading in SGS, the tax exemption on income derived by primary dealers from trading in SGS will be extended till 31 December 2023.   

MAS will release further details of the extension by May 2018.  

 

For Insurance Sector

Tax Changes   Summary FAQ / Related Information
Extend the Insurance Business Development – Insurance Broking Business (“IBD-IBB”) scheme and allow the Insurance Business Development – Specialised Insurance Broking Business (“IBD-SIBB”) scheme to lapse

To further strengthen Singapore’s position as a leading insurance and reinsurance centre, the IBD-IBB scheme will be extended till 31 December 2023.

 

All conditions of the IBD-IBB scheme remain the same.

 

To streamline and simplify the insurance tax incentives, the IBD-SIBB scheme will be allowed to lapse after 31 March 2018. With the lapsing of IBD-SIBB scheme, specialty insurance broking and advisory services will be incentivised under the IBD-IBB scheme, at a concessionary tax rate of 10%.  

MAS will release further details of the change by May 2018.

Other Tax Changes for Businesses

Tax Changes  Summary  FAQ / Related Information

Extend the Investment Allowance (“IA”) scheme to include qualifying investment in submarine cable systems landing in Singapore

To strengthen Singapore’s position as a leading digital connectivity hub, we will extend IA in respect of productive equipment to capital expenditure incurred on newly-constructed strategic submarine cable systems landing in Singapore, subject to qualifying conditions.

 

All other conditions of the IA scheme apply, except for the following which will be permitted:

 

a) The submarine cable systems can be used outside Singapore; and

 

b) The submarine cable systems, on which IA has been granted, can be leased out under the indefeasible rights of use arrangements.

 

This change will take effect for capital expenditure incurred between 20 February 2018 and 31 December 2023, inclusive of both dates.

Please approach EDB for more information.

Introduce a review date for the Withholding Tax ("WHT") exemption on container lease payments made to non-resident lessors.

A review date of 31 December 2022 will be introduced to ensure that the relevance of the scheme is periodically reviewed.

 

This means that unless the scheme is extended, such payments accruing to a non-resident lessor under any lease or agreement entered into on or after 1 January 2023 in respect of the use of a qualifying container for the carriage of goods by sea will be subject to WHT.

 

 

Scheme

Name of Scheme Summary  FAQ / Related Information

Extension of the Wage Credit Scheme (WCS)

The WCS will be extended for three more years from 2018 to 2020. Government co-funding of qualifying wage increases will be 20% in 2018, 15% in 2019 and 10% in 2020. Wage increases given in 2017, 2018 and 2019 which are sustained in subsequent years of the scheme, will also be supported.  Wage Credit Scheme (WCS)

ABOUT US

Kong Lim & Partners LLP is a chartered accounting firm, serving over 400 clients from a range of industries locally, and across the region. Our clients include SMEs and listed companies.

ADD: 13A Mackenzie Road, Singapore 228676

TEL: +65 6227 4180

EMAIL: konglim@klp.com.sg

OPERATING HOURS:
Mon to Fri 9am - 5pm
Closed on Sat, Sun and all public holidays
 

 

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