Prepare statement of accounts

Yes

Yes

Yes

Report 2-line statement:

• Revenue
• Adjusted Profit/Loss
  

Yes

No

No

Report 4-line statement:

• Revenue
• Gross Profit/Loss
• Allowable Business Expenses
• Adjusted Profit/Loss

No

Yes

Yes

No

No

Yes

1. Statement of Accounts

Certified Trading, Profit and Loss account and Balance Sheet

Businesses with revenue of $500,000 or more have to submit certified Statement of Accounts i.e. Trading, Profit and Loss account and Balance Sheet.

General Ledger showing revenue and expenses are not acceptable as Statement of Accounts.

“Certified” means signed by the sole -proprietor of the business, indicating that the accounts are true and correct.

2. Assets in Balance Sheet

Fixed assets schedule

If your business revenue is $500,000 or more and you are claiming capital allowances on the assets used for your business, you have to give an asset schedule (Details of Fixed Assets Purchased/ Disposed of) showing full details of the assets acquired and disposed of in the year (e.g. cost, terms of purchase, date of purchase/sold, description of asset).

3. Grouping of expenses in Profit/Loss Account

Staff salary/CPF/FWL/SDL

Give a breakdown of the amount applicable to each item if the expenses are grouped in the Profit and Loss Account.

Claims for each item on CPF, FWL and SDL cannot exceed the statutory contribution rates. Any excess contributions are not allowable as deductions.

E.g. YA2010- The maximum CPF allowable to employer on employees’ salary is 14.5% (for employees aged 50 years and below) of the gross employees’ salary.

For prevailing CPF contribution rates, please refer to the CPF website.

For prevailing FWL contribution rates, please refer to MOM website.

For prevailing SDL contribution rates, please refer to SDF website .

If excess CPF, FWL and SDL contributions have been included in the Profit & Loss Account, the amount is to be added to the net accounting profit/loss to arrive at Adjusted Profit/Loss.

4. General classification of expenses in Profit/Loss Account

Operating/General/ Miscellaneous expenses

If expenses are labeled as “Operating”, “General” or “Miscellaneous” in the Profit and Loss Account, give a breakdown of the expenses with detailed description of the amount applicable to each item.

Do not claim private and capital expenses (e.g prayer expenses, purchase of assets and drawings) as allowable business expenses.

If these disallowable expenses have been included in Profit & Loss Account, the amount is to be added to the net accounting profit/loss to arrive at Adjusted Profit/Loss. 

5. Expenses that are not deductible

Private and domestic expenses such as: travelling expenses for personal/family trips, private entertainment, food and refreshment for own consumption, proprietor’s own medical expenses and CPF contribution.

Capital expenditure such as: capital contributions, purchase of fixed assets, hire purchase installments, loan repayment.

Expenses in respect of private vehicles such as: petrol, parking charges, repairs and maintenance, hire purchase interest.

All expenses of a private and domestic nature are not deductible for tax purposes.

All expenses of a capital nature are not deductible for tax purposes. However, capital allowances are allowable on the cost for plant and machinery used in the business. To claim for the capital allowances, fixed assets of the business must be reflected in Balance Sheet

All private vehicle expenses are not deductible even if they are incurred in the course of business.

If these disallowable expenses have been included in Profit & Loss Account, the amount is to be added to the net accounting profit/loss to arrive at Adjusted Profit/Loss.