Dear Clients and friends

Welcome to the 4th issue of our newsletter for 2007.

We are pleased to announce significant developments in our firm’s capabilities. We will now be able to offer Trustee services through our licensed Joint venture company, Singtrust. From 1 December our firm will become a member of Nexia International, one of the 10 largest groupings of accounting firms in the world.  

This issue also highlights two important deadlines in Singapore’s corporate and tax environment, namely the launch of XBRL filing by companies from 1 November 2007 and the end of the transitional period for the dividend imputation system on 31 December 2007.

Warmest Regards
Shanker Iyer

NEWS

Singtrust Limited obtains Trust Business Licence from Monetary Authority of Singapore  

 

Our firm has formed a joint venture with two leading trust professionals, Mark Lea and Peter Finch and established “Singtrust Limited” to undertake trust business. Singtrust has recently obtained a Trust Business licence from the Monetary Authority of Singapore. This development will allow the firm to offer trustee services to its clients and contacts. The growth of Singapore as a centre for wealth management has seen an increase in demand for trusts from high net worth individuals and families from across the world. [MORE]

The Iyer Practice will soon be a part of Nexia International

Our firm will soon be part of Nexia International (www.Nexia.com), a top 10 worldwide grouping of accounting firms.  SC International, of which the firm is currently a member, is merging with Nexia International from 1 December 2007. [MORE]

Singapore’s economy grew by 9.4 per cent in Q3 2007

Singapore economy continued to show strong growth in Q307. Advance estimates of the Ministry of Industry (MTI) shows real Gross Domestic Product (GDP) rose to 9.4 per cent on a year-on-year basis in the third quarter. This is an increase from the 8.7 per cent in the previous quarter.

For further information, please click here.

Hong Kong to cut taxes by one percentage point

Hong Kong’s government is reducing income and corporate taxes by one percentage point in order to help protect its position as an Asian financial centre in its high-stakes race with Singapore. [MORE]

SGX proposes to launch new Board similar to UK’s Alternative Investment Market

Singapore Stock Exchange (SGX) is proposing to launch something similar to the Alternative Investment Market (“AIM”) that United Kingdom currently has. [MORE]

Singapore to benefit from tariff concessions by exporting to India

The current tariff concessions from the Singapore Comprehensive Economic Cooperation Agreement (CECA) will see an overall increase from the current 64 per cent to 81 per cent in terms of coverage of Singapore’s domestic exports to India enjoying tariff concessions. [MORE]

Strong FDI inflows seen for Singapore for the next 5 years

Singapore will remain as an attractive destination for foreign investors for the next 5 years with its robust business environment as one of the most attractive factor in the world. [MORE]

ARTICLES

Singapore: 2007 Update on Tax Legislation and Practices

Our firm recently contributed an article on “Singapore: 2007 Update on Tax Legislation and Practices” to the British Chamber of Commerce’s magazine ORIENT. The article highlighted the recent developments in tax legislation and practice in Singapore. [MORE]

Keys to Commercial Success in China

A good understanding of the China market and how it works is the single most important common attribute shared by the many foreign enterprises succeeding in China today.  If you are looking for success in the China market it is important that your strategists, key decision makers, and in-market team have a good understanding of the differences between mainland Chinese society and its people as opposed to those of markets in which you are accustomed to dealing. [MORE]

The Malaysia Budget 2008

Prime Minister of Malaysia, unveiled the 2008 Budget on 7 September 2007. Highlights of the Budget include the reduction of the corporate tax rate to 26% for 2008 and to 25% to 2009. Further, the single-tier system for dividends will be implemented in 2008, where profits will be taxed at the company level only. A six year transition has been proposed for existing companies to move over to the single-tier system. The Budget also gives an option to Labuan Offshore companies to be taxed under the Income Tax Act 1967 in addition to the existing options. [MORE]

SINGAPORE TAXATION UPDATE

Income Tax (Amendment) Bill 2007

Income Tax (Amendment No. 2) Bill published

The Bill was introduced in Parliament on 22 October 2007 and published electronically in the Government Gazette on 23 October 2007 after the public consultation exercise carried out by the Ministry of Finance (please refer to update below on summary of responses). The changes presented in this Bill include the Budget 2007 tax changes and other non-Budget changes. [MORE]

MOF accepted majority of suggestions

The Ministry of Finance (MOF) accepted majority of suggestions on the Income Tax (Amendment) Bill 2007 after receiving the comments during the public consultation exercise held from 15 June to 14 July 2007. [MORE]

Corporate Tax Update

Transition to the One Tier system ends on 31 December 2007

The five year transition to the one-tier system for the taxation of companies will come to an end on 31 December 2007. Companies with tax credits and distributable profits should explore the payment of special dividends before the above date, if their shareholders include Singapore residents with a marginal tax rate of below 18%. Such shareholders could be entitled to a full or partial refund of the tax credits attached to the taxable dividends received.

Tax Treaties

Revised DTA further strengthens economic links between Singapore and China

The revised agreement signed between Singapore and China for the Avoidance of Double Taxation (DTA) enters into force on 18 September 2007. [MORE]

Avoidance of Double Taxation Agreement

• Singapore-Qatar [MORE]
• Singapore-Kazakhstan [MORE]
  

GST Update

Guides to visitors and retailers on Tourist Refund Scheme

The IRAS has published two guides on 1 August 2007 on Tourist Refund Scheme for:

• Tourists to Singapore who have purchased goods from retailers operating the Tourist Refund Scheme.
• Retailers who are operating or intend to operate the Tourist Refund Scheme. [MORE]

GST Compliance Assurance Programme

The IRAS issued the tax guide of GST Compliance Assurance Programme (“CAP”) on 26 July 2007 providing information on this programme for GST-registered businesses and explaining how IRAS conducts a CAP.  The objective of GST CAP is to attain desired internal control for the systems and processes for accurate GST accounting, record keeping and reporting by partnering large businesses. [MORE]

ACCOUNTING UPDATE

FRS 11: Construction Contracts

Proposed new accounting standard

A new proposed rule may result in lumpy property earnings – a new accounting standard rule that allows property developers to only recognise revenue from their projects upon completion. [MORE]

Financial Reporting Standards (FRSs) - UPDATED

New / Revised FRS

The following is a tabulation of the latest revised standards that are new / and last updated in 2007. [MORE]

CORPORATE UPDATE

Official launch of XBRL on 1 Nov

Companies with financial years ending on or after 30 April 2007 are required to file their financial statements in eXtensible Business Reporting Language (XBRL) format with effect from 1 November 2007, unless exempted. [MORE]

Public consultation exercise on the review of the registration and regulatory regime for foreign companies

The Accounting & Corporate Regulatory Authority (ACRA) is reviewing registration and regulatory regime for foreign companies in Singapore in order to ensure that Singapore’s legislation in this area is progressive and comparable to those in major jurisdictions. A public consultation exercise has just been launched [MORE]

SINGAPORE GOVERNMENT ASSISTANCE UPDATE

International Business Fellowship (IBF) Programme extended to include Latin America

International Enterprise (IE) Singapore will be extending the IBF Programme to include Latin America so that companies can better understand Latin American markets, in addition to existing foreign markets such as Russia, China, India, the Middle East and Vietnam. [MORE]

Financial support provided for SMEs to be more innovative and enterprising

SPRING Singapore provides financial support for small and medium enterprises (SMEs) to test-bed their latest innovations and ideas. [MORE]

EVENTS

Upcoming Events

Launch of Singtrust

Singtrust Limited will be formally launched at a reception in Singapore on 21 November 2007 Details to follow.

International Tax Conference 2007
Toronto, Canada
November 15 – 17, 2007

Shanker Iyer will be presenting a paper on Taxation on Singapore Companies and its widely-used treaty network at the “International Tax Conference 2007” in Canada.

Past Events

Holding Companies Conference, Copenhagen, Denmark

The Jurisdictions and who can use them
September 10 – 11, 2007

Shanker Iyer covered the topic on Singapore as a country for international intermediary holding company location as well as other uses in international tax planning.

STAFF NEWS

Senior Appointments

Raymond Teo, CPA Australia Manager, Audit & Specialist Services	Lai Cheow Yee, ACCA Manager, Audit & Specialist Services	Chirag Shah, ACA Assistant Manager, Taxation Services
We are pleased to announce the appointment of the above executives, all of whom have worked with Big 4 accounting firms prior to joining us.

Staff Promotions

Senior staff departure

We were sorry to lose the services of Senior Tax Manager, Agnes Schlesinger, who left us recently to return to the US for personal family reasons.

SINGAPORE PUBLIC HOLIDAYS

• Remainder of 2007

  1. Deepavali – 8 November, Thursday
  2. Hari Raya Haji – 20 December, Thursday
  3. Christmas Day – 25 December, Tuesday

  2008

  • New Year’s Day – 1 January, Tuesday
  • Chinese New Year – 7 & 8 February, Thursday and Friday
  • Good Friday – 21 March, Friday
  • Labour Day – 1 May, Thursday
  • Vesak Day – 19 May, Monday
  • National Day – 9 August, Saturday
  • Hari Raya Puasa – 1 October, Wednesday
  • Deepavali – 28 October, Tuesday
  • Hari Raya Haji – 8 December, Monday
  • Christmas Day – 25 December, Thursday
  
  

REMINDER FOR YOUR DIARY...

Important Dates 1 November 2007 Launch of compulsory filing of financial statements in eXtensible Business Reporting Language (XBRL) 31 December 2007 Deadline for providing Estimated Chargeable Income for companies with a 30 September 2007 year end Deadline for filing company tax returns for the Year of Assessment 2007 Annual General Meeting Deadline for companies with a 30 June year end 31 December 2007 End of transitional period for transition to one tier system for dividend payments “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