Frequently Asked Questions (FAQs) on Preparing Information for Submission

Transcription

1 Questions 1. When is commission considered as income earned? Should commission-paying organisations submit commission information for overseas earners? Should gross commission income submitted by the commission-paying organisation include GST? Should benefits in kind (e.g. vouchers, accommodation, and flight tickets) given to commission earners after achieving a target be considered commission? Should lucky draw prizes received from the commission-paying organisation be considered commission income? Should sole-proprietors earning commission from their sole-proprietorships include their own commission information in the file submission? What is the commission amount to be submitted if the commission-paying organisation has deducted fees or penalties from the gross commission earned by the commission earner (e.g. for the use of office space, telephone charges etc)? Should commission-paying organisations include rebates (e.g. rebates given when a specific targeted sales amount is achieved) given to the commission earner in the submission? A token of appreciation was given for sales referral. Should the commission-paying organisation submit this information? Should commission income be reported in Singapore or foreign currency? What is the exchange rate that we should use? How should a commission-paying organisation (e.g. estate agency) submit co-broking transactions for their commission earners (e.g. salesperson)? Should commission-paying organisations submit information of referral fees to freelancer? Should commission-paying organisations include commission earners who join the organisation for a short period? Do commission-paying organisations only submit commission information for commission earners who are taxable?... 4

2 Answers 1. When is commission considered as income earned?. Commission is considered as income earned when it is accrued (due and payable), regardless of the payment date. If the payment is conditional on the commission earner achieving a certain target, commission is considered accrued once the target has been achieved. 2. Should commission-paying organisations submit commission information for overseas earners? Commission-paying organisations should submit information relating to Singapore sourced income.. If the commission income is sourced in Singapore, it is taxable in Singapore regardless of whether the commission earner is a local or foreigner. Commission-paying organisations do not need to submit the commission information if commission is paid to an overseas commission earner who: Has no permanent establishment in Singapore; or Did not conduct any work in Singapore. 3. Should gross commission income submitted by the commission-paying organisation include GST? If the recipient of the commission is not GST registered, GST should not be included in the submission even if the commission-paying organisation is GST registered. If the recipient of commission is GST registered, GST should be included in the submission. 4. Should benefits in kind (e.g. vouchers, accommodation, and flight tickets) given to commission earners after achieving a target be considered commission? If the benefits in kind were given as a result for the services rendered, it should be included as part of the commission. Page 1 of 4

3 5. Should lucky draw prizes received from the commission-paying organisation be considered commission income? Lucky draw prizes that the commission earners receive from company events are generally not taxable and hence should not be submitted as part of the commission income. 6. Should sole-proprietors earning commission from their sole-proprietorships include their own commission information in the file submission? Sole-proprietors are not required to submit their commission income information in e- Submission of Commission. They should report the commission income as part of their trade income when filing their Income Tax Returns. 7. What is the commission amount to be submitted if the commission-paying organisation has deducted fees or penalties from the gross commission earned by the commission earner (e.g. for the use of office space, telephone charges etc)? The commission-paying organisation should submit the gross commission before deductions. The commission earner can claim these as his business expenses during tax filing. 8. Should commission-paying organisations include rebates (e.g. rebates given when a specific targeted sales amount is achieved) given to the commission earner in the submission? Commission-paying organisations should submit the gross commission, including cash and product rebates. 9. A token of appreciation was given for sales referral. Should the commissionpaying organisation submit this information? It should be submitted in the submission file. Page 2 of 4

4 10. Should commission income be reported in Singapore or foreign currency? What is the exchange rate that we should use? Commission is to be reported in Singapore currency. The organisation can use the exchange rate from Monetary Authority of Singapore at: How should a commission-paying organisation (e.g. estate agency) submit cobroking transactions for their commission earners (e.g. salesperson)? If salesperson A has entered into a co-broking deal with Salesperson B through their respective estate agencies, both the salespersons will receive their share of commission (co-broking fees) from their own estate agencies on their services rendered. The commission received by the respective salespersons from the co-broking deal will form part of their total commission received for the year. The estate agencies will transmit the information of the total commission earned by their respective salesperson in their e-submission to us. 12. Should commission-paying organisations submit information of referral fees to freelancer? If the commission paid for closing the deal are paid directly to commission earner and freelancer (for referrals), the commission-paying organisation is required to submit the information for both commission earner and freelancer. If the commission is only paid to commission earner and not freelancer, the commission-paying organisation should only submit the gross commission information earned by the commission earner. The payment of the commission from the commission earner to the freelancer is a private arrangement between them. In this case, the commission earner will claim business expenses paid to the freelancer when he e-files. 13. Should commission-paying organisations include commission earners who join the organisation for a short period? Yes, commission-paying organisations should include all commission earners regardless of the duration that they were with the organisation. Page 3 of 4

5 14. Do commission-paying organisations only submit commission information for commission earners who are taxable? Commission-paying organisations should submit the commission information of all commission earners, regardless whether they are taxable. However, exclude those who did not earn any commission in the year. The information provided is intended for better general understanding and is not intended to comprehensively address all possible issues that may arise. The contents are correct as at 28 Dec 2015 and are provided on an as is basis without warranties of any kind. IRAS shall not be liable for any damages, expenses, costs or loss of any kind however caused as a result of, or in connection with your use of this user guide. While every effort has been made to ensure that the above information is consistent with existing policies and practice, should there be any changes, IRAS reserves the right to vary our position accordingly. Page 4 of 4