Business income is income derived from carrying on a trade, business, profession, or a vocation. Business income is taxable in the sole-proprietor's, partner's, or self-employed person's name. Therefore, a sole-proprietor, partner, or self-employed person who receives this income has to report the income in his individual tax form.
The business income will be added to all other personal income. The total is then subject to personal income tax rates.
For the partner
You have to report in the Individual Income Tax Return (Form B or Form B1):
- your share of partnership profit/loss
- your salary, bonus, CPF, and other benefits from the partnership
Please check with your precedent partner on your share of income from the partnership. Not declaring or under-declaring your partnership income is an omission which may render you liable for penalties under the law.
- Completing Form B
You need to report your share of partnership profit/loss and your salary, bonus, CPF, and other benefits from partnership in the 'Trade, Business, Profession, or Vocation' section under 'Partnership 1'. If you are a partner of more than one partnership, you have to report the income in Appendix 1.
- Completing Form B1
You need to include your total income from the partnership in the 'Other Income' section and give the details of the income in Appendix 1.
[In the event that the total taxable revenue of all your partnership businesses with the same composition of partners exceeded $1 million in the last 12 months, or is expected to exceed $1 million in the next 12 months, you should register yourself for GST. To find out more on what is treated as “taxable” for GST purposes, and how to register, please refer to “Registering for GST”.]
Other sources of income
You have to report your income from all sources (for example: sole-proprietorship business, employment, rent, other income from property, royalty, charge, estate/trust income) in the relevant sections of the Individual Income Tax Return (Form B or Form B1).
Submission of Certified Statement of Accounts
You have to submit the certified statement of accounts of your sole-proprietorship business together with your Income Tax Return if the revenue of your business is $500,000 or more. Please also submit the Computation of Adjusted Profit/Loss (26KB).
You need not submit the certified statement of accounts if the revenue of your business is less than $500,000. However you must still prepare the accounts and keep proper records of your business transactions as we may ask you to send them in for verification.
'Certified' means signed by you, indicating that the accounts are true and correct.
'Statement of accounts' comprises:
- Trading and Profit and Loss Account; and
- Balance Sheets
Preparing Statement of Accounts
You may wish to seek the assistance of an accounting professional to prepare proper statement of accounts for you.
Nevertheless, if you are a taxi driver, commission agent, or engaged in general trade, you may refer to these working sheets (25KB) as a guide.
If you are a hawker, you may refer to the Tax Guide for Hawkers, which are available in 4 languages:
Tax Guide for Hawkers (English) (88KB) Tax Guide for Hawkers -Appendix (English) (70KB) Tax Guide for Hawkers - Appendix (English) (Microsoft Excel version) (40KB)
Tax Guide for Hawkers (Chinese) (118KB) Tax Guide for Hawkers - Appendix (Chinese) (60KB) Tax Guide for Hawkers - Appendix (Chinese) (Microsoft Excel version) (41KB)
Tax Guide for Hawkers (Malay) (93KB) Tax Guide for Hawkers - Appendix (Malay) (69KM) Tax Guide for Hawkers - Appendix (Malay) (Microsoft Excel version) (40KB)
Tax Guide for Hawkers (Tamil) (127KB) Tax Guide for Hawkers - Appendix (Tamil) (58KB) Tax Guide for Hawkers - Appendix (Tamil) (Microsoft Excel version) (84KB)
Note: You may need the relevant font type to view the tax guide and schedules in Chinese and Tamil.
Receipts and supporting documents
You need not send in supporting documents unless we call upon them for verification
From 1 Jan 2007, you have to keep them for five years.
FAQ's
If you are the precedent partner of the partnership, you will receive Form P and you would have to report the income of the partnership on behalf of the other partners.
You will also receive a Form B to report your individual income for all sources. You have to report your share of partnership profit/loss and your income from other sources in Form B.