Dear Clients and friends

Singapore government has responded to the economic crisis by setting up a high level Economic Strategies Committee made up of representatives from both the private and public sectors. The Committee's broad goal is to grow Singapore faster than other advanced economies. Meanwhile the sharp decline on the economy seems to have abated and there has been some stirring in the property market.

We are pleased to present to you our quarterly compilation of updates on Singapore tax and other developments.

Warmest Regards
Shanker Iyer

NEWS

Singapore Government sets up high level Economic Strategies Committee (ESC)

The 25-member ESC had its first meeting on 7 July 09 to consider the key issues it will study, and to set up sub-committees to pursue specific areas of work. [MORE]

Singapore office rents continue to slide

Fall accompanied by rise in vacancies and unlikely to recover anytime soon. [MORE]

A softer slide in Singapore private home prices in Q2

Singapore's private home prices fell for a fourth straight quarter in Q2 2009 - but the marked slowdown in the rate of decline shows that the residential market here is recovering. [MORE]

Singapore Economy expected to grow 4.2% next year

Singapore's economy is expected to shrink 6.5% in 2009, higher than the 4.9% predicted in March. However this is still within the Government's forecast of a 6% - 9% contraction. However 4.2% growth is expected next year.

The downgrade for 2009 comes on the back of lower projections for the manufacturing, wholesale and retail trade, financial services, and hotels and restaurants sectors. Only construction is expected to post growth of 15.9%. [MORE]

Singapore to implement OCED standard on Exchange of Information

Singapore will be amending its laws to better align with international tax standards.

This is expected to get Singapore off the so-called "grey list" of tax havens by the Organisation for Economic Cooperation and Development (OECD). [MORE]

Singapore listed companies to comply with full IFRS by 2012

All companies formed in Singapore and listed on the local stock exchange must start using a set of global accounting standards by 2012 - a move that will bring Singapore in line with other nations and enhance its role as a financial centre. [MORE]

S'pore ranked most attractive city in Asia to do business in

SINGAPORE is viewed by the mobile wealthy as the most attractive destination in Asia to do business in, according to the Mobile Wealthy Residency Index (MWRI). [MORE]


India Budget 2009

The presentation of this year’s budget was supposed to be different in several respects – it was the first budget of the newly elected Government - a Government without crutches; it was against a background of unprecedented global crisis to which India has been no exception; and it was in a way a continuance of the interim budget.

With this background India Inc had built in great expectations that were further fueled by the Economic Survey. There were expectations of a stimulus for the economy, of some definite thinking on the fiscal discipline, of industry friendly and much awaited reforms- especially in the areas of disinvestments, labour, foreign direct investments, etc. [MORE]

ARTICLES

How to handle your bank

IN CPA Australia's International CFO Survey in March, 44 per cent of respondents were found to have had difficulty accessing finance amid tight lending conditions brought on by the global financial crisis.

Among respondents who worked for businesses headquartered in Asia, the percentage was an alarming 80 per cent. And among respondents who worked for small businesses, it was as high as almost 70 per cent.

As small businesses often look to finance their operations through bank loans, a key challenge is how to approach a bank for a loan. With so many businesses of all sizes now suffering cash-flow difficulties, meeting this challenge is crucial.

In this article by CPA Australia, it lists the crucial elements in presenting a bank a compelling case to lend to your business. And it is important that these practices become standard practice, regardless of the prevailing economic conditions.

For full article, please click here.

Article first published in The Business Times on 12 May 2009
By CPA Australia

ING desk shares share their views on economic outlook

The global recession has found a bottom in Q109 and is on track for a decent bounce from the low point on the back of inventory rebuilding and fiscal stimulus.

However the outlook has brightened with the pace of contraction moderating, but return to sustainable, healthy growth over the next 12 months uncertain.

For full article, please click here.

Article circulated by ING desk on 25 June 2009.

SINGAPORE TAXATION UPDATE

Income Tax

GST Update

MOF Invited the public to give comments on changes to the Goods and Services Tax (GST) Act
 
The Ministry of Finance conducted public consultations on the draft GST (Amendment) Bill 2009 in Jun 2009. [MORE]

Advance ruling system for GST

To provide greater clarity and certainty to taxpayers, the Comptroller of GST (CGST) operates an advance ruling system which provides written interpretation on how specific provisions of the GST Act will apply for a particular business arrangement or a specific transaction. The advice or clarification given under the advance ruling system is legally binding on the CGST. [MORE]

Clarify in respect of GST on gifts

Your employees may receive gifts from third parties in the course of their work. They may subsequently pay a sum of money to you, the employer, to retain the gifts. The GST treatment for the consideration will depend on who the gifts belong to in the first instance. Whether such gifts belong to them or to you, will depend on the giver’s (that is, the third party’s) intention. [MORE]

Latest E-Tax Guides Issued by IRAS:


Machinery and Plant: Section 19/19A of the Income Tax Act (1 Jul 09) More

GST Guide for the Fund Management Industry (1 Jul 09) More

(Revised) Income Tax Treatment of Limited Liability Partnerships (30 Jun 09) More

Taxation Factsheets

CORPORATE UPDATE

ACRA launched a new business vehicle called ‘Limited Partnership’ on 4 May 2009

Limited Partnership (LP) is a new vehicle for doing business in Singapore. It is a partnership consisting of a minimum of two partners, with at least one general partner and one limited partner. An LP does not have a separate legal entity from the partners, i.e. it cannot sue or be sued or own property in its own name. [MORE]

Singapore sets up steering Committee to review Companies Act

The Steering Committee for reviewing the Companies Act, is supported by 5 working groups on the 5 broad areas of company law, mainly:

• Corporate governance and Directors’ duties
• Shareholders’ Protection
• Corporate Finance
• Accountancy
• Maintenance/Miscellaneous

Automatic registration of local law firms

From 1 May 2009, all existing local law firms will be automatically registered as businesses under the Business Registration Act. New local law firms will also be required to register with ACRA under the Business Registration Act. [MORE]

ACCOUNTING UPDATE

ACRA issues Enhanced Code of Professional Conduct and Ethics for Public Accountants

From 1 August 2009 Singapore’s public accountants must adhere to an enhanced Code of Professional Conduct and Ethics (the Code). The enhanced Code is based on the Code of Ethics of the International Federation of Accountants (IFAC), a global benchmark for the international accounting profession. The enhanced Code provides more guidance to Public Accountants on how to apply the principles and the independence rules, and places an expectation on public accountants to pro-actively identify and eliminate potential threats to their independence. [MORE]

ASC announces strategic direction to work towards full convergence with IFRS for S'pore listed companies

The Singapore Accounting Standards Council (ASC) has set, as its strategic direction, the aim of working towards the full convergence of the Singapore Financial Reporting Standards (SFRS) with the International Financial Reporting Standards (IFRS) for Singapore- incorporated companies listed on the Singapore Stock Exchange by 2012. [MORE]

The ASC has issued the amendments to the following:

- INT FRS 109 and FRS 39 - Embedded Derivatives. An entity shall apply these amendments for annual periods ending on or after 30 June 2009.

For more info, please click here.

- FRSs - Improvements to FRSs 2009. The effective dates and transitional provisions for the amendments are stated in the issued document.

For more info, please click here.

The ASC has issued the revised version of the following:

- FRS 101 - First-Time Adoption of Financial Reporting Standards, effective for periods beginning on or after 1 July 2009. Earlier application is permitted.

For more info, please click here.

- FRS 103 - Business Combinations and FRS 27 - Consolidated and Separate Financial Statements, effective for periods beginning on or after 1 July 2009. Earlier application is permitted.

For more info, please click here.

HUMAN RESOURCE UPDATE

Faster maternity leave pay

The Singapore Government has modified its maternity leave subsidy scheme to let companies receive part of the payments earlier.

Starting May 1, employers will be able to make one interim claim for reimbursement for the Government paid portion of maternity leave any time after the mother has taken 8 weeks of maternity leave. This also applies to self-employed women seeking reimbursement from Government for maternity leave taken. [MORE]

2nd Jobs Credit paid June 30

THE second of four payments under the Jobs Credit scheme went at the end of June 2009 to more than 100,000 employers who have some 1.4 million local workers on their payroll. [MORE]

SINGAPORE GOVERNMENT ASSISTANCE SCHEME UPDATE

The Ministry of Manpower is introducing new measures under SPUR (Skiils Programme for Upgrading and Resilience) to further develop Singapore's manpower capabilities and provide greater support for companies and workers, especially Professionals, Managers, Executives and Technicians (PMETs), affected by the downturn. [MORE]

Excess Manpower Guidelines For Employers Updated
Changes on working arrangements and wages.
 
To help companies lower costs and save jobs through a projected 6% - 9% contraction of Singapore's economy in 2009, manpower guidelines previously issued in November 2008 have been refined. [MORE]

EVENTS

Past Events

Mr. Shanker Iyer presented to a group of Chartered Accountants in Hyderabad on Asia Pacific Tax Systems and Comparative Analysis of Holding Company Jurisdictions. Certificate Course in International Taxation Hyderabad Branch of ICAI 6 June 2009

Mr. Shanker Iyer presented a paper on recent changes and developments relevant to Singapore Tax at the Asia/ Africa IFA Conference in Mauritius. 3rd IFA International Tax conference 2009 IFA Mauritius 15 May 2009

SENIOR STAFF APPOINTMENT

Alice Tan Manager, Audit We are pleased to welcome Alice to the firm. Alice graduated from Nanyang Technological University with a Bachelor’s Degree in Accountancy. Since then, she worked with one of the Big 4 firms in Singapore for more than 6 years.

STAFF PROMOTIONS - Jan - Jun 2009

Audit Dept Rina - Senior 1 Thea Wei Hau - Semi Senior 1 Corporate Secretarial Dept Esther Hoo – Manager Lau Kar Yee - Senior 1

Tax Dept Leong Mew Pheng - Supervisor Melissa Yeo - Senior 2 Yang Xue - Assistant 2 Erna - Assistant 2

SINGAPORE PUBLIC HOLIDAYS - REMAINDER OF 2009

• National Day - 9 August 2009, Sunday*
• Hari Raya Puasa - 20 September 2009, Sunday*               
• Deepavali - 17 October 2009, Saturday
• Hari Raya Haji - 27 November 2009, Friday
• Christmas Day - 25 December 2009, Friday

* The following Monday will be a public holiday.

REMINDERS FOR YOUR DIARY...

Important Dates Deadline for Tax filing 30 November 2009 – Deadline for filing company tax returns for the Year of Assessment 2009. No extensions available.

“THE IYER PRACTICE NEWSLETTER” is issued exclusively by Shanker Iyer & Co for the information of clients and associates and should not be used or relied upon as a substitute for detailed advice or as a basis for formulating business decisions. Materials published may only be reproduced with the consent of Shanker Iyer & Co