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Taxation of a Sole Trader in Singapore

Taxation of a Sole Trader in Singapore

The taxation of a sole trader in Singapore applies on the income derived from the business, trade or professional activities undertaken by the self-employed individual.

Those who work as sole traders in Singapore must calculate and include their income, according to their business activity, in their tax return.

Having an accountant in Singapore to help with the tax calculation can be especially important for those freelancers and sole traders who are in their first year of business.

Taxable income for sole traders in Singapore

Any income obtained as a result of performing activities related to freelance services, counseling or other professional activity undertaken by a single individual, or a sole trader, is subject to the corporate income tax.

Because the sole trader is not a separate legal entity from its founder, a special tax return filing method is in place: the income from the business is reported separately from the personal income. Singapore does not impose a capital gains tax.

All self-employed individuals in Singapore must report the income they derive after they conduct their specific activities in the city-state. This is not the same as the salary.

You can also contact us for details on our payroll services in Singapore. Handling payroll also entails keeping records. Each employee’s salary amounts for each pay period must be documented in a separate record. Several forms that are provided to employees and end-of-year reports use this information. Our payroll company in Singapore can assist with the drafting and filing of these forms.

Tax filing and reporting for Singapore sole traders 

Sole traders in Singapore are required to keep updated and accurate record and accounts of all of their business transactions, as soon as they set up the sole trader.

The business income is declared for a twelve-month period, that included both profits and losses. One of our accountants in Singapore can help you establish this period as soon as you start your freelance business. Tax filing is performed with the Inland Revenue Authority of Singapore. In case you  need GST registration services in Singapore, our team of accountants is ready to help you.

Sole traders in Singapore who satisfy the existing criteria may claim deductions. These may be made for usual business expenses, medical expenses, capital allowances and others. One of our agents who specialize in accounting in Singapore can help you with detailed information on the special tax deductions.

You can contact our accounting firm in Singapore for complete accounting services and tax consultancy for self-employed individuals and freelancers.