Singapore’s agreement with the Russian Federation for the avoidance of double taxation comes into force on 16 January 2009 following the completion of ratification formalities. The provisions of the Agreement shall apply to income derived on or after 1 January 2010.

The Agreement, which is Singapore’s 60th agreement for the avoidance of double taxation, encourages and facilitates cross-border trade and investment between Singapore and Russia through the lowering of tax barriers and the better definition of taxing rights between the two nations. The main provisions under the Agreement include the following:

a) Lower withholding tax rates are imposed on dividends, interest and royalties. The tax rate for interest and royalties is 7.5% while the following rates apply to dividends:
i) 5% (for corporate shareholders holding at least 15% of the share capital and has invested at least US$100,000 or its equivalent in other currencies);
ii) 5% for the Government; and
iii) 10% (for other shareholders) (more…)

Singapore’s agreement with the Russian Federation for the avoidance of double taxation comes into force on 16 January 2009 following the completion of ratification formalities. The provisions of the Agreement shall apply to income derived on or after 1 January 2010.

The Agreement, which is Singapore’s 60th agreement for the avoidance of double taxation, encourages and facilitates cross-border trade and investment between Singapore and Russia through the lowering of tax barriers and the better definition of taxing rights between the two nations. The main provisions under the Agreement include the following: (more…)

It is a common misnomer that and organization needs to use the same method of accounting depreciation for financial reporting and tax purposes. An organization must decide if it is cost effective to use more than one depreciation method and furthermore which method or combination of methods to use. Each method carries with it a distinct list of benefits and draw backs and can be customized to fit a company’s unique situation.

There are three main types of depreciation techniques.

Straight-Line – Simplest deprecation technique. A company estimates the salvage value of the item and the usable life. It then subtracts the scrap value from the original cost and divides by the life span in years to get the annual depreciation expense. The largest benefit of this method is that it is very simple to understand and easy to use. A major drawback to this technique is that it does not acquire all the possible tax benefit early in the life cycle, effectively leaving those tax dollars on the table longer. (more…)

In accounting terms depreciation is the distribution of an assets cost over its useful life. In other words when a firm purchases an asset it has to make the decision if the asset will economically benefit the organization for more than a year. If the answer is yes than the firm would add this asset as a non current asset on its balance sheet, and would commence depreciating this asset over its useful life. In depreciating the asset the firm is subtracting the value (or the original cost) of the asset that was originally booked when the asset was purchased (under the non current asset section of the firm’s balance sheet) and is then expensing (the calculated accounting period depreciation amount) from the firms revenues earned in the same accounting period. The firm is in essence matching the cost (or value in terms of assets) against the revenues earned by the asset use. Many methods exist to calculate depreciation but I am going to focus on two of the more popular methods: Straight Line and Double Declining Balance.

Straight Line:

In the straight line depreciation method the total cost of the depreciable asset is subtracted from the salvage value of the asset. This number is then divided by the useful life of an asset (in years) to determine the amount will be depreciated from this asset each year. An example of this would be if a firm where to purchase a piece of equipment that cost $5,000 and the salvage value of the asset is calculated at $500 ; the amount to be depreciated would be $4,500 ($5,000-$500=$4,500). The useful life of this piece of equipment for this example is 4 years. Using this data we would calculate the yearly depreciation of this asset to be $1,125 (which would represent a depreciation percentage of 25% per year). (more…)

Tax credits are available for qualified education expenses paid by taxpayers who are continuing their education. A qualified education expense is defined as an expense that is paid during the tax year for fees and tuition requied by an eligible educational institution for the purpose of student enrollment and attendance. It does not matter how the expenses are paid, only that they are valid. Expenses that are not considered valid are those paid for room and board, medical expenses, student health fees, transportation, personal living expense, insurance, course-related books, supplies, equipment, or any non-academic activity or non-credit course. This basically leaves only tuition costs as valid education expenses.

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We are all crossing our fingers that the money is on the way. Now, why are we all so excited? For some, it is because they will finally be able to buy that 52″ HDTV without having to dip into their savings account.

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Under the current start-up exemption scheme, a newly incorporated company can claim full tax exemption on the first S$100,000 of chargeable income and 50% exemption for next S$ 200,000 of chargeable income. A company that qualifies should have been incorporated and tax resident in Singapore, and have no more than 20 shareholders of which at least one individual holds at least 10% of total number of issued ordinary shares. The full tax exemption is available for the first 3 consecutive Years of Assessment.

The Minister has proposed the start-up exemption scheme to be extended to companies limited by guarantee, subject to same conditions imposed on companies limited by shares, with effect from Year of Assessment 2010. (more…)

‘I have no intention of continuing to provide support for the construction of dwellings that are a sieve in terms of their energy consumption’, said President Sarkozy last month.

Accordingly, the deductibility of mortgage interest for new dwellings will progressively be reserved for very low energy consumption properties.

Existing properties remain unaffected by this proposal, as the announcement is clearly aimed at trying to persuade developers that they need to improve the energy performance of newly constructed dwellings. (more…)

It is always a scary ordeal when you know you are not going to be able to meet that April 15th tax deadline. When you know that your taxes are going to be complicated to file, it sometimes makes us procrastinate even more. Many times, try as we might, we just can not get everything ready to file on time. It can be a difficult process, especially when we are going to try and go it alone and get them prepared without using a CPA.

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When you run your own small business it can be filled with all kinds of responsibilities and obligations that you have to take care of personally. After all, you are the boss and if you do not do whatever has to be done, no one else is likely to. Just keeping a small business operating in this day and age can be a day to day challenge in itself and the last thing you want riding on your shoulders along with everything else is the burden of dealing with the IRS and tax issues.

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