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Common filing mistakes
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The correct way to file |
| 1 |
Declaration of Partner's Income as Employment / Sole-proprietorship Income in Form B/B1
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A partner who is self-employed should report his share of profit/loss and remuneration (salary, bonus, CPF, and other benefits) from the partnership in the 'Trade, Business, Profession, or Vocation' section and 'Partnership' sub-section in his income tax return.
When e-Filing:
Declare the income as 'partner's salary, bonus & CPF' under item 3 'Trade, Business, Profession or Vocation'>>> 'Partnership'
When Paper Filing:
- Form B: Complete item 1b(4) on Page 2
- Form B1: Complete item 3 ('Other Income') on Page 2 and item 1 'Trade, Business, Profession, or Vocation' on Appendix 1.
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| 2 |
A partner not declaring his share of partnership income in the Form B; or declaring an estimated partnership income as he does not know his share of the Partnership income |
He should obtain his share of the partnership income from the precedent partner and declare it in his Form B.
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| 3 |
A partner not filing his Form B as the precedent partner has submitted the Form P on behalf of the partnership |
He is required to file his Form B to declare his share of the partnership income and income from other sources, if any. |
| 4 |
A partner declaring his Partnership Rent income as Other Income |
He should declare his Partnership Rent income in the 'Partnership' section.
When e-Filing:
Declare the income as ‘Partner’s Other Income' under item 3 'Trade, Business, Profession or Vocation' >>> 'Partnership'.
When Paper Filing:
• Form B: Complete item 1b(7) on Page 2.
• Form B1: Complete item 3 ('Other Income') on Page 2 and item 1 'Trade, Business, Profession or Vocation' on Appendix 1.
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| 5 |
A partner claiming partner's expenses in his Form B when the expenses are already charged to the partnership's Profit and Loss Account |
Partner's expenses incurred wholly and exclusively in the production of partnership income are allowable provided they have not been claimed against the partnership's income in Form P or claimed against your other income.
Examples of Allowable Expenses:
i) Interest expenses on monies borrowed to invest in partnership
ii) Subscription to professional bodies not reimbursed by the partnership business
iii)Public transport for business purposes (e.g. taxi fare) not reimbursed by the partnership business
Examples of Disallowable Expenses:
i) All expenses incured on usage of private vehicles even if trips are for business purposes
ii) Subscription / entrance fees to private social clubs
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| 5 |
For precedent partner: Declaration of Partnership income (Form P)
Salary, bonus and CPF paid to partners are claimed under 'Allowable Business Expenses'
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Partners’ salary, bonus, CPF are not to be included under Allowable Business Expenses. The precedent partner should enter it under the column: Partner's salary, Bonus & CPF.
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| 6 |
For precedent partner:
Not filing the Form P as the partners have all sent in their respective Form B
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The Precedent Partner is still required to file the Form P to declare the partnership income. |
| 7 |
Claiming the amount contributed last year as a self-employed person in the Form B to qualify for Self-Employed CPF Relief |
CPF relief for a self-employed person is automatically allowed based on information from CPF Board. You need not indicate your claim in Form B.
Self-employed CPF relief is allowed if :
- you have declared trade income
- you are making the contribution as a self-employed person
- your contribution was made before 31 Dec of the preceding year
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