Higher revenue threshold for sole-proprietorship 2-line income reports

[SINGAPORE] Sole-proprietors with revenues of S$200,000 or below will now only need to report their income using a two-line statement, indicating revenue and adjusted profit or loss, the Inland Revenue Authority of Singapore (Iras) announced in a statement on Monday. This is an upward revision of the previous threshold of S$100,000.

The four-line statement covering revenue, gross profit or loss, allowable business expenses and adjusted profit or loss will continue to be used for those with revenues exceeding S$200,000. Iras estimates that 21,000 sole-proprietors will benefit from this initiative.

This scheme is among new initiatives by Iras to simplify tax filing. This tax season, Iras will also be sending tax bills directly to selected taxpayers instead of filing notices.

The vast majority of taxpayers who are already on No-Filing Service (NFS) - which means they are not required to file a tax return - do not make any adjustments to their income, deductions and reliefs when they receive their NFS notice before their tax bill, Iras said on March 1.

Under the new Direct Notice of Assessment initiative, taxpayers on the NFS scheme will get their tax bills directly when ready, the authority said.

"This is made possible as more income information is automatically included, and tax reliefs can be pre-filled for taxpayers," it said, adding that taxpayers can still object to the assessment if they want to make changes to their reported income and relief claims at that stage.

More taxpayers who are on the NFS scheme will get to enjoy this new service initiative progressively over the next few years, Iras added.

Other improvements include commission agents and private-hire car/taxi drivers enjoying NFS and a new look for tax notices this year with improved design for easy reading.

Iras will be extending NFS to the self-employed taxpayers for the first time this year, benefiting eligible commission agents and private-hire car/taxi drivers who have joined the Pre-filling of Income Scheme.

Under the Pre-filling of Income Scheme, the self-employed taxpayers' income information is pre-filled in their tax returns.

The scheme will be extended to other groups of self-employed taxpayers progressively.

Such taxpayers eligible for NFS will receive an SMS notification from Iras. They do not need to file a tax return unless they wish to make any adjustments to their income details or relief claims.

They will receive their tax bills from May.

Iras will also be digitising most notices from May, with paper notices minimised.

The new notices will show simple steps that taxpayers need to take and feature an enhanced layout for better user experience.

In line with Iras' digital-first approach, about 720,000 taxpayers will be invited to receive their tax bills electronically this year, bringing the total number of taxpayers receiving electronic tax bills to over two million.

Taxpayers are encouraged to ensure that their contact details are up to date and indicate their notification preferences via the new "Update Notice Preferences" digital service on myTax Portal.

Iras also said that taxpayers who have been working from home can claim the incremental running expenses on electricity and telecommunication charges incurred for work purposes as tax deductions, if these expenses are not reimbursed by their employers.

Bills before and after working from home can be compared, with the difference to be claimed as a deduction.

If there is more than one taxpayer working from home, Iras will accept an equal apportionment basis in computing the amount of shared expenses across all working individuals in the same household.

Taxpayers will also have to retain expense records for five years and provide Iras with supporting documents upon request.

THE STRAITS TIMES

With additional reporting by Elysia Tan