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Withholding tax is a mechanism to collect income tax from certain groups of non-residents and is an area often overlooked by businesses. With the rise of cross border transactions, it is therefore important for businesses to understand the practical application of withholding tax to avoid penalties and minimise their tax burden.
Among the taxes collected by the Inland Revenue Authority of Singapore (IRAS), withholding tax registered the second highest percentage year-on-year increase in revenue collection by the IRAS for the financial year ended 31 March 2022. The total withholding tax collection amounted to S$1.9 billion, representing an increase of about 19% over the previous year’s collection.
This workshop is designed specifically to give Accounting and Tax Professionals a practical knowledge of withholding tax. You will also learn about the concept of permanent establishment and gain a basic understanding of some articles in tax treaty. Personnel involved in tax compliance of the company and project costing will also find the workshop useful.
Overview of withholding tax system
Who are non-resident companies and individuals
Transactions that are subject to withholding tax
- Applicable sections in Singapore Income Tax Act – treatments of payments of interest, royalties, service fees, etc.
- Payment to non-resident professionals
- Rights-based approach for characterising software payments and payments for the use of or the right to use information and digitised goods
Exemptions and remissions
Withholding tax rate
- Singapore Income Tax Act
Application of tax treaties
- Concept of Permanent Establishment (“PE”)
- Types of PE
- PE and implication to withholding tax
- Various articles in a tax treaty (e.g. business profits, royalties and interest articles, etc.)
- Claiming exemptions or reduced rates under the tax treaties
- Certificates of residence
Withholding tax compliance and administration
- Timing of withholding and payment to IRAS
- Who bears the withholding tax
- When payment is in foreign currency
- Deductibility of withholding tax on interest borne by companies on behalf of non-residents
- Withholding tax forms
- Penalties for non-compliance
- Voluntary disclosure
Tax clauses in agreements – tax gross up and tax indemnity clause
Foreign tax credit/Pooling
Case studies on application of withholding tax provisions
What you will learn
By the end of the workshop, you will:
- Understand what kind of payments to non-residents will attract withholding tax
- Acquire practical knowledge to apply tax treaty benefits to claim exemption of withholding tax or reduced tax rates
- Develop skills to craft tax clauses in agreements
- Learn how to claim foreign tax credit/pooling when preparing tax computation
- Avoid penalty for late payment or non-compliance
- Accounting and Tax Professionals who would like to have a practical knowledge of withholding tax.
- Personnel involved in tax compliance of the company and project costing will also find the workshop useful.
Wong Kok Siong
Kok Siong is a Tax Partner with Steven Tan Russell Bedford PAC. He has over 20 years of experience in tax compliance and tax planning, including 12 years with one of the Big Four Accounting Firms.
Kok Siong is well versed in Singapore income tax law and practice and advises clients on a broad array of projects, including mergers and acquisitions, portfolio transfers, corporate restructuring, tax due diligence, cross-border transactions and investments. Having worked with clients in multiple industries, Kok Siong has extensive experience and expertise in serving local, multinational and listed companies in Singapore as well as multinational companies based in Asia Pacific, United States and Europe.
Kok Siong is an Accredited Tax Advisor (ATA) with the Singapore Chartered Tax Professionals, and a member of the Institute of Singapore Chartered Accountants.
This is a face-to-face workshop to be conducted on 19th June 2023. ACCA members will enjoy the members' fee of $374.00 (before prevailing GST rate). Kindly key in the promo code "ACCA23" during registration. You will be requested to furnish your ACCA membership number upon receipt of our confirmation.