Singapore: mandatory e-filing for withholding tax and PIC Cash payout

New rules require all companies in Singapore to e-file their withholding tax and PIC cash payout application. Hardcopy applications will no longer be accepted on or after the effective date.

From 1 July 2016, companies will only be able to file withholding tax to be paid to the Inland Revenue Authority of Singapore (IRAS) electronically via the myTax portal. Non-compliant applicants will be penalised under Section 94(2) of the Income Tax Act.

The change is in line with the government’s goals for effective delivery of public services, and aligns the Smart Nation vision to harness technology and enhance productivity.

The following features are available with e-filing:

  • No original signature is required, which can avoid delay in the submission of various tax forms
  • Cost saving on expenses such as courier charges, postage and papers
  • Less paperwork
  • Instant acknowledgment
  • The ability to save draft before submission.

In addition, the e-filing has the following benefits:

  • In-built validation check to verify certain information fields
  • In-built formulae to auto-compute certain fields
  • Auto-computation of tax and penalties payable.

From 1 August 2016, all PIC cash payout applicants, including companies, partnerships and sole-proprietors, are also required to e-file the PIC cash payout application. And, after the effective date the PIC conversion rate for qualifying expenditure will be reduced from 60% to 40%.  Any qualifying expenditure incurred before or after 1 August will need to segregate the claims into these two categories:

a) Expenditure incurred before 1 August 2016 at 60% conversion rate

b) Expenditure incurred on or after 1 August 2016 at 40% conversion rate.

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