Dear Clients and friends

Singapore’s economy is now officially out of recession with two consecutive quarters of strong growth. 2009 GDP is now expected to decline by around 2% compared to a forecast decline of almost 10% just six months ago. This recovery has manifested itself in a rapid rise in property prices, so much so that the government had to bring in some anti speculation measures in September.

It remains to be seen if economic recovery can be sustained after the government’s stimulus packages are withdrawn. Businesses will be heartened that the government has decided to continue the very popular Jobs Credit for another two quarters in 2010, albeit at a lower rate.

On the tax front, Singapore has signed exchange of information protocols with almost all of the 12 countries needed to get off the so called OECD ‘grey list’.

Warmest Regards
Shanker Iyer

NEWS

Singapore's economic recession is technically over

Singapore's economy grew an annualised 14.9 per cent in the third quarter, driven by the continued expansion of biomedical and electronics manufacturing output.

This is the second consecutive expansion, following a 22 per cent growth in the second quarter. Compared to a year ago, the economy grew by 0.8 per cent, after a 3.2 per cent contraction in the previous quarter. [MORE]

Government extends Jobs Credit but at a lower rate

The popular Jobs Credit programme will be extended by another six months, with two additional payments on a stepped-down rate to help hold jobs [MORE]

Private residential property price index rose 16% in Q3

Based on the estimated price index of private residential property, prices rose from 133.3 points in the 2nd Quarter 2009 to 154.5 points in the 3rd Quarter 2009.

This represents an increase of 15.9%, compared with the 4.7% decline in the previous quarter. [MORE]

Govt takes fizz out of nascent property bubble

Singapore’s Ministry for National Development (MND) announced that the Government would take the following measures to ensure a stable and sustainable property market: a) Reinstating the Confirmed List in 1st Half 2010 GLS Programme; b) Interest Absorption Scheme (IAS) and Interest-Only Housing Loans (IOL) and c) Non-extension of Property-Related Budget 2009 Assistance Measures. [MORE]

Business loans finally on the rise

In a fresh sign that the Singapore economy is recovering, the amount of bank lending to corporations finally posted an uptick in August after nine straight months of declines.

According to the latest figures from the Monetary Authority of Singapore (MAS), Singapore-dollar business loans in August rose by about 1.1 per cent to $153.5 billion from $151.8 billion in July. [MORE]

Singapore within touching distance of OECD white list

Singapore is now 2 short of the requisite 12 agreements under OECD guidelines to be removed from the “grey list” of Tax Havens and promoted to the white list of compliant jurisdictions. These treaties are compliant with the internationally-agreed tax standard on exchange of information (EOI). [MORE]

Peru-S'pore FTA

A FREE trade agreement between Peru and Singapore took effect on Aug 1, the first pact between the resource-rich Latin American nation and Asia, Peruvian Trade & Tourism Minister Martin Perez said.

As talks on a global trade pact has stalled, Mr Perez said Peru would move on with bilateral discussions, hoping to integrate those bilateral free trade pacts in the future. [MORE]

ASEAN, China sign investment agreement to boost trade

ASEAN and China signed an investment agreement, completing negotiations for an ASEAN—China Free Trade Area (ACFTA).

The agreement was signed at the 41st ASEAN Economic Ministers Meeting in Bangkok. The pact, which will take effect from January next year, aims to boost two—way investment by as much as 60 per cent over the next two years. [MORE]

The ASEAN-India Trade in Goods Agreement signed by ASEAN and India

The ASEAN-India Trade in Goods Agreement (TIG) was signed by Economic Ministers of ASEAN and India at the 12th ASEAN-India Consultations in Bangkok, Thailand. The TIG Agreement forms the first substantive pillar of the ASEAN-India Free Trade Area (AIFTA) arising from the Framework Agreement (FA) on Comprehensive Economic Agreement for the AIFTA signed in 2003. Under the FA, an AIFTA would be realised with Brunei, Indonesia, Malaysia, Singapore, Thailand and India by 31 December 2012 and with the remaining ASEAN countries by 31 December 2017. [MORE]

S'pore population to hit 5 million soon

The population of Singapore at the end of June stood at 4.99 million according to the 2009 Population Trends report.

The Department of Statistics report issued, also showed that there were 3.73 million Singapore residents and 1.25 million non—residents. Singapore Residents and Permanent Residents formed 75% of the population, with the resident population growing 2.55% in 2009, from the 3.1% total growth over the previous year. [MORE]

Steepest fall in office occupancy cost

A plunge in Grade A office rents has raised Singapore’s competitive edge somewhat. According to Colliers International, office occupancy costs here were the fourth-highest among 26 Asia-Pacific cities in Q2 this year – down a notch from a quarter ago.

As rents stay weak while the economy stabilises, property consultants also expect some companies to take advantage of the situation to expand. [MORE]

ARTICLES

Banking Secrecy and International Tax Issues - Switzerland‘s viewpoint

A combination of market and government failure in recent years has led to a financial crisis. The financial crisis caused radical upheavals in the banking world in many countries resulting in collapses, takeovers, and the nationalisation of many hitherto renowned banks.

This article talks about Swiss banking secrecy, its tax system, tax evasion and tax fraud, unwelcome assets, fighting fraud, corruption, and money laundering, last but not least international cooperation.

For full article, please click here.

Article by Swiss Confederation – Federal Department of Finance FDF

UK Taxation Tips for Expatriates

Martin Rimmer, Tax Manager of The Fry Group provides some helpful financial pointers on a number of financial considerations that should be taken on board to not only ensure you are paying the relevant UK-based taxes, but to also ensure you maximise on the opportunities available to you as an expatriate when leaving the UK to reside in another country.

These include things to organise when you leave the UK; UK tax allowances; maintaining non-resident status; exporting UK pension rights; taking local advice and planning your return to the UK carefully.

To find out more, please click here to view full article.

Article by Martin Rimmer of The Fry Group.

SINGAPORE TAXATION UPDATE

Tax Treaties Update

Singapore and Mexico enhance tax cooperation

Singapore and Mexico signed a protocol to incorporate the new internationally agreed Standard for the exchange of information upon request for tax purposes in their standing Agreement for the avoidance of double taxation (“DTA”). [MORE]

S'pore and Qatar sign tax agreement

Singapore and Qatar signed a protocol today that enhances the tax co-operation between both countries.

The enhanced agreement incorporates the new internationally agreed standard for the exchange of information upon request for tax purposes. [MORE]

S'pore, Norway tax protocol

Singapore and Norway signed a protocol amending their standing agreement for the avoidance of double taxation (DTA).

It was signed by Second Permanent Secretary (Finance) Peter Ong and Norway's Ambassador to Singapore Janne Julsrud.
[MORE]

Singapore and Australia Enhance Tax Cooperation

Singapore and Australia signed a protocol amending their standing Agreement for the avoidance of double taxation (“DTA”).

Singapore's High Commissioner, His Excellency Albert Chua, and Australia's Assistant Treasurer, the Honourable Nick Sherry, signed the protocol in Canberra. [MORE]

Tax cooperation between Singapore and The Netherlands enhanced

Singapore and the Netherlands signed a protocol amending their standing Convention for the avoidance of double taxation ('DTA').

This was signed at the Hague between Minister for Finance, Mr Tharman Shanmugaratnam, and the Dutch State Secretary for Finance, Mr Jan Kees de Jager. [MORE]

Singapore and Denmark sign tax deal

Singapore and Denmark signed an agreement to enhance cooperation in exchange of information for tax matters.

The pact was inked in Singapore by Commissioner of Inland RevenueMoses Lee, and Denmark's Ambassador to Singapore Vibeke Rovsing Lauritzen. [MORE]

Singapore and New Zealand sign Avoidance of Double Taxation Agreement

The Government of the Republic of Singapore and the Government of New Zealand signed an Agreement for the avoidance of double taxation ("DTA").

The Agreement incorporates the new internationally agreed Standard for the exchange of information. This is the second agreement Singapore has signed that incorporates the Standard. [MORE]

Signing of a Protocol Amending the Agreement between Singapore and Belgium for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income

The Government of the Republic of Singapore and the Government of the Kingdom of Belgium signed a protocol amending the Agreement for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income (“DTA”). The terms of the protocol, which incorporate the new internationally agreed Standard on Exchange of Information, will permit Belgium and Singapore to enhance their cooperation on the exchange of information for tax matters upon request. This includes information that may be held by a bank or trust company, regardless whether the information relates to a domestic tax matter at hand. [MORE]

Singapore, UK sign info pact

The Government of the Republic of Singapore and the Government of the United Kingdom (“UK”) of Great Britain and Northern Ireland signed a protocol amending the Agreement for the avoidance of double taxation (“DTA”).
The protocol marks the third agreement Singapore has signed that incorporates the new internationally agreed Standard for the exchange of information upon request for tax purposes, as part of the comprehensive renegotiation of the Singapore-UK DTA.
The signing took place in Singapore between Minister for Finance, Mr Tharman Shanmugaratnam, and the UK’s Financial Secretary to the Treasury, Rt Hon Stephen Timms MP.[MORE]

Singapore and France to Sign Protocol on Exchange of Information Under Bilateral Avoidance of Double Taxation Agreement (DTA)

Minister for Finance of Singapore, Mr Tharman Shanmugaratnam, and Minister for the Budget, Public Accounts, Civil Service and State Reform of France, Mr Eric Woerth met in Singapore. To enhance tax cooperation, both Ministers agreed that Singapore and France will work expeditiously to sign a Protocol to incorporate the internationally agreed Standard for the exchange of information for tax purposes in the existing bilateral DTA between the two countries later this year.[MORE]

GST Update

Sectors on IRAS GST audit focus

The taxman has broken with convention and publicly named the sectors it is focusing its auditing on this year.

The Inland Revenue Authority of Singapore (IRAS) usually keeps this information to itself but this year it hopes to encourage voluntary compliance with tax laws. [MORE]

Draft Goods and Services Tax (Amendment) Bill 2009

The Ministry of Finance (MOF) has accepted for implementation nine out of the 16 suggestions received on the draft Goods and Services Tax (Amendment) Bill 2009 during the public consultation exercise held in June.

The draft amendment Bill contains proposed legislation to put into effect tax changes announced in this year's Budget, as well as other changes arising from the periodic review of the GST system... [MORE]

Income Tax Update

Draft Income Tax (Amendment) Bill 2009

A public consultation exercise was held on the draft Income Tax (Amendment) Bill 2009 from 22 June 2009 to 14 July 2009 to obtain feedback on the draft Bill. [MORE]

Latest E-Tax Guides Issued by IRAS:

1. Revision of GST: A Guide to Exports (14 Jul 09)
   
   
2. Revised Circular on Carry-Back Relief System (30 Jul 09)
   
   
3. Revised Circular on Enhanced Carry-Back Relief System (30 Jul 09)
   
   
4. Revised e-Tax Guide on Temporary Liberalisation of Income Tax Exemption for Foreign-Sourced Income received in Singapore from 22 Jan 2009 to 21 Jan 2010 (7 Aug 09)
   
   
5. Revised e-Tax Guide on Income Tax Implications Arising from the Adoption of FRS 39- Financial Instruments; Recognition & Measurement (14 Aug 09)
   
   
6. Guide on Accounting Software for Software Developers (1 Sept 09)
   
   
7. Income Tax: Tax Treatment of Public-Private Partnership Arrangements (10 Sept 09)
   
   
8. Clarification on "Directly in Connection With" and "Directly Benefit" (1 Oct 09)
   
   
9. GST Treatment of Vouchers: Sale and redemption (9 Oct 09)

CORPORATE UPDATE

Launch of new ACRA website
ACRA currently announced the launch of its revamped website. Developed in consultation with various stakeholders, the new website aims to provide information that meets the needs of different user groups. [MORE]

PD No. 4 of 2009: Filing of Financial Statements in XBRL
This Practice Direction seeks to inform companies on the changes that will be made to the filing of financial statements in XBRL, following the adoption of Singapore Financial Reporting Standards (FRS) applicable for financial periods beginning on or after 1 January 2009, specifically, the revised version of FRS 1 Presentation of Financial Statements. [MORE]

ACCOUNTING UPDATE

IFAC Calls for G20 to Adopt Global Accounting, Auditing, and Independence Standards and to Enhance Government Transparency

The International Federation of Accountants (IFAC) has called for broad action by the G20 leaders to encourage adoption and implementation of global accounting, auditing, and auditor independence standards to improve the ability of capital markets to work globally. In addition, IFAC has called for the worldwide adoption and implementation of International Public Sector Accounting Standards as a means to greatly improve government transparency and accountability in light of the “unprecedented takeovers, lending, guarantees, and bailouts of major market institutions, banks, and companies.” It is also urging that further steps be taken to enhance the governance of the International Accounting Standards Board in order to ensure its legitimacy and its ability to act independently, and without inappropriate political interference, in its standard-setting role. [MORE]

IASB Publishes IFRS For SMEs
The International Accounting Standards Board (IASB) has issued an International Financial Reporting Standard (IFRS) designed for use by small and medium-sized entities (SMEs), which are estimated to represent more than 95 per cent of all companies. The standard is a result of a five-year development process with extensive consultation of SMEs worldwide.[MORE]


IFAC Welcomes New SME Reporting Standard as Important Step in Enhancing SME FS
The International Federation of Accountants (IFAC) and its Small and Medium Practices (SMP) Committee welcome the release of the International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs)by the International Accounting Standards Board (IASB). IFAC encourages its 157 member organizations to carefully consider how to use the standard in their respective jurisdictions. [MORE]


IESBA Releases New Code; Clarifies Requirements and Strengthens Independence
The International Ethics Standards Board for Accountants (IESBA) has issued a revised Code of Ethics for Professional Accountants (the Code), clarifying requirements for all professional accountants and significantly strengthening the independence requirements of auditors. The revised Code has been released following the consideration and approval by the Public Interest Oversight Board (PIOB) of due process and extensive public interest consultation. [MORE]

The ASC has issued the exposure drafts to the following:

• ED D25 Extinguishing Financial Liabilities with Equity Instruments
• ED Classification of Rights Issues
• ED Financial Instruments: Classification and Measurement is available for comments.

HUMAN RESOURCE UPDATE

More Protection For Foreign Workers From January 2010

To offer more protection for foreign workers including maids, the Ministry of Manpower (MOM) has announced changes to their compulsory medical insurance coverage and security bond for non-Malaysian workers.

The new requirement applies to workers with new work permits issued on or after 1 January 2010, or existing work permits renewed on or after 1 January 2010. [MORE]

Job market stabilises in Q2

Singapore's job market stabilised in the second quarter, with fewer redundancies and more job openings as the economy emerges from its worst recession.

The overall unemployment rate stood at a seasonally adjusted 3.3 per cent in June, unchanged from the first quarter, according to the latest labour market report released by the Ministry of Manpower. [MORE]

SINGAPORE GOVERNMENT ASSISTANCE SCHEME UPDATE

More business groups can tap govt scheme

Business associations and chambers can now tap a multimillion-dollar government scheme to help members deal with the challenging times - and to prepare for the upturn ahead.

Trade and Industry Minister Lim Hng Kiang said the Local Enterprise and Association Development (Lead) programme has been extended to cover non-industry specific business organisations. [MORE]

EVENTS

Past Events

ACRA's Public Accountants Conference 2009
Singapore
19 Aug 2009

Mr. Shanker Iyer participated on the discussion panel on Strengths and Opportunities for Singapore's Public Accountancy Profession in the ACRA's Public Accountants Conference 2009.

Doing Business in India - A Corporate, Regulatory and Tax Perspective
Singapore
8 Oct 2009

Shanker Iyer & Co together with Amarchand Mangaldas and Singapore International Chamber of Commerce jointly did a well received event on the corporate, regulatory and tax prespective of doing business in India. It covered topics ranging from Corporate Structures for Foreign Investment in India, the different Entry Options available, The Indian Legal System and Understanding India from a Cultural Perspective.

Upcoming Events

The Iyer Practice & Professional Investment Advisory Services Pte Ltd
Becoming a Singapore Permanent Resident - What you need to consider
21 Oct 09
Singapore Cricket Club
For event flyer, please click here.

Institute of Certified Public Accountants of Singapore
Technical Guidance Session - Impairment of Financial and Non-Financial Assets
4 Nov 09

The Iyer Practice & The Henley Group
Bicycles VS BMW’s
5 Nov 09
Singapore Cricket Club
Details to follow

SINGAPORE PUBLIC HOLIDAYS

Remainder of 2009

• Deepavali - 17 October 2009, Saturday
• Hari Raya Haji - 27 November 2009, Friday
• Christmas Day - 25 December 2009, Friday

2010

• New Year's Day - 1 January 2010, Friday
• Chinese New Year - 14 February 2010, Monday *
• Chinese New Year - 15 February 2010, Tuesday
• Good Friday - 2 April 2010, Friday
• Labour Day - 1 May 2010, Friday
• Vesak Day - 28 May 2010, Friday
• National Day - 9 August 2010, Monday
• Hari Raya Puasa - 10 September 2010, Friday
• Deepavali - 5 November 2010, Friday **
• Hari Raya Haji - 17 November 2010, Wednesday
• Christmas Day - 25 December 2010, Saturday

* As Chinese New Year falls on Sunday 14 February 2010 and Monday 15 February 2010, the next day, Tuesday 16 February 2010, will be a public holiday.

** The date for Deepavali, 5 November 2010, needs to be checked against the Indian Almanac when it is available. Should there be a change in date; the Ministry of Manpower will issue a press release to announce the change.

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.   Companies unable to meet the AGM deadline are generally able to apply for an extension of time prior to their financial year end to the Accounting and Corporate Regulatory Authority to hold the Annual General Meeting. The application fees for extension of time range from S$50 to S150 (S$50 for 1 month, S$100 for 2 months and S$150 for 3 months)

“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