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. The sole-proprietor, partner, or self-employed person who receives this income has to report the income in his individual income tax return.
The business income is added to all other personal income. The total is then subject to personal income tax rates.
Self-employed partners are required to report in the Individual Income Tax Return (Form B or Form B1) their:
- Share of partnership profit/loss; and
- Salary, bonus, CPF, and other benefits from the partnership.
Please check with your precedent partner on your share of income from the partnership. To determine if you are a partner that is employed or self-employed, please refer to Am I an Employee or a Self-Employed.
Not declaring or under-declaring your partnership income is an omission which may render you liable for penalties under the law.
Completing Form B
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'.
When you are a partner of more than one partnership, you should report the income in Appendix 1.
Completing Form B1
Include your total income from the partnership in the 'Other Income' section and give the details of the income in Appendix 1.
Other Sources of Income
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).