Purpose, identifiers and basis period
The three-page format is a guide for companies formed to hold investments and earn investment income. Enter tax reference, company name, YA and basis period. Tax is assessed on the preceding financial year: for YA 2023, a 31 March year-end gives 1 April 2021–31 March 2022; a 31 December year-end gives calendar 2022.
Gross investment income B
B includes total dividends, interest, rent and other income. Total dividends include Singapore-exempt dividends, unremitted foreign dividends and exempt foreign dividends; other income can include WCS/JGI/JSS payouts, royalties and unremitted foreign income. Including an item in allocation income B does not make it taxable in the later net-income schedule.
Common expenses A and the 5% guide
Statutory and regulatory expenses include audit, secretarial, accounting, annual listing and income-tax service fees. Other allowable common costs include directors’ fees, salaries, approved provident-fund contributions, office rent/utilities and general, administration and management expenses; the guide says this other category should not exceed 5% of gross investment income. Attach schedules showing the basis for common and direct expenses.
Allocate expenses to each income stream
For each stream, its share of common expenses equals stream investment income ÷ total income B × common expenses A. For taxable foreign dividends C the template shows C/B × A. Direct revenue expenses are allowed only for income-producing investments. This separates directly linked expenses from shared costs.
Taxable dividends, interest, rent and other income
The foreign-dividend taxable schedule excludes unremitted and exempt foreign dividends. For interest and other income deduct direct and allocated common costs, excluding unremitted foreign income from taxable other income. For rent the listed direct costs include interest, property tax, insurance, repairs and maintenance, MCST management and specified other expenses, then allocated common costs.
Donations and five-year carryforward
Deduct 2.5 times qualifying donations to IPCs and other approved recipients. Unused donations carry forward subject to the shareholding test for at most five years. The example discards unused YA 2017 donations still present at the end of YA 2022 rather than carrying them into YA 2023.
Partial exemption and start-up exclusion
From YA 2020 the template exempts 75% of the first S$10,000 and 50% of the next S$190,000: maximum S$102,500 exemption on S$200,000 income. Investment holding companies cannot claim the new start-up exemption but can receive partial exemption. After deducting exemption the format applies 17% tax.
Foreign tax credit and pooling
FTC is the lower of Singapore tax on net foreign income and foreign tax paid. Pooling uses the lower of total Singapore tax on pooled foreign income and pooled foreign tax. FTC does not apply to foreign dividends exempt in Singapore.
Historical rebates and final payable tax
Subtract applicable FTC, then CIT rebate, to arrive at net tax. The source lists YA 2019 rebate of 20% capped at S$10,000 and YA 2020 rebate of 25% capped at S$15,000. These are historical examples, not today’s rebate. The source directs readers to IRAS’s current rates/exemptions, donations, FTC and investment-holding-company guidance.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗