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Accounting for Hotels in Singapore

Accounting for Hotels in Singapore

Tourism is one of the most prolific industries in Singapore. The city-state offers spectacular views, excellent services and stellar accommodation conditions which have helped this sector thrive and made foreign investors come here and open hotels.

Running a hotel business is quite difficult to consider there are many aspects to take care of, however, accounting is of those tasks that can be outsourced to accounting firms in Singapore that can handle all the bookkeeping and reporting in a professional manner.

If you are a hotel business owner and need help, this article briefly explains how our accountants in Singapore can help you.

Accounting services for your hotel in Singapore

A hotel, no matter if it is a small or large one, implies a complex accounting has it must comply with various requirements. For example, the Singapore Inland Revenue Authority (IRAS) in collaboration with the Tourism Board has agreed on various facilities for hotel keepers which can be used to your advantage in diminishing the taxes paid in the city-state, or the use of incentives to improve your services.

Returning to the accounting services available in Singapore, here are the ones we can provide if you are a hotel owner:

  1. tailored guidance in meeting the tax requirements applicable in this sector;
  2. the preparation of accounts and financial statements, as well as monthly and yearly reports;
  3. audit services are also available for your hotel in Singapore;
  4. assistance in applying for various tax incentives available for tourism facilities.

Even if a hotel is not subject to regular bookkeeping operations such as the case of a convenience store, for example, it must use specific software where all the accounting operations are operated. These must indicate the payments made by clients, the services they use, the discounts they have (if any), other tax information.

Apart from these, a hotel must comply with the requirements imposed by the IRAS to hotel operators in Singapore.

The property tax applied to hotels in Singapore

Hotel owners must pay the Singapore property tax which is computed differently compared to that applied to private citizens.

Singapore hotels are assessed based on the annual value of their rooms and are imposed the property tax at a fixed percentage of the gross amount of the receipts recorded in the previous year. The annual value assessment rate is set at 25%.

It should also be noted that the IRAS imposed the annual value on food and beverages sold in hotels. The rate of this assessment is set at 10% starting with 2018.

Singapore hotels must also pay a tax called CESS on the promotion of tourism by the Singapore Tourism Board.

Our accountants in Singapore can help you with the calculation and filing of the tax documents for the assessment of the property tax.

CESS collection in Singapore

The Singapore Tourism Board imposes a CESS fee on hotels that are promoted it during tourism events. This tax is collected in order to bring to the attention of local and foreign tourists various events that occur in the city-state during the year.

The CESS tax has been imposed in the city-state since 1972 and it has contributed significantly to the increase of this sector.

The CESS applies specifically to the Formula 1 Grand Prix-related events and must be paid by Singapore hotels on all taxable transactions connected to the event. The amount to be paid is set at 20% or 30% of the gross receipts coming from each taxable transaction. Our audit firm in Singapore can also offer specialized services for such businesses.

Our accountants in Singapore are at your service with dedicated services associated with the levy of the CESS fee.

We also provide tailored accounting services for shipping companies in Singapore that also fall under specific tax regulations.

We invite you to watch our video on this subject below:

Incentives for tourism businesses in Singapore

The Singapore Tourism Board has enabled two incentives schemes for hotels in the city-state. These are:

  • the Double Tax Deduction for Approved International Fair through which Singapore businesses are encouraged to participate in internationals trade fairs;
  • the Double Tax Deduction for Inbound Tourism Promotion through which companies are encouraged to promote internal tourism.

According to the Board, tourism declined in the last quarter of 2020 because of the Covid-19 pandemic, however, in numbers:

  • the income registered on a year-to-year basis was 4.4 billion SGD;
  • international arrivals also brought 2.7 million SGD;
  • the hotel industry generated a total of 963 million SGD.

If you need accounting services for your hotel in Singapore, our accounting firm is at your service, so do not hesitate to contact us for tailored guidance and assistance.