Mighty Glory Corporate Solutions

Foreign Domestic Worker (FDW) Levy Concession

by Mighty Glory Corporate Solutions | 30 Sep 2019 | News, Taxation

Businesses in Singapore are required to adhere to accounting regulations set by ASC or the Accounting Standards Council. Compliance with accounting standards is important to ensure transparency and reliability of a business’ financial information. Transparency and reliability of financial information enable comparability of global financial data and smooth functioning of international capital markets. The increasing number of businesses in Singapore is another compelling reason for entities to adhere to a uniform financial standard. As a business, it can be time-consuming, exhausting and even downright intimidating, to maintain your seemingly infinite financial records. Hiring an accounting firm is one of the best ways to manage your business’ financial data. With a reputed accounting service provider, you will have an expert to take care of the financial aspects of your business. You can focus more on your core business knowing that your financial matters will be taken care of duly in compliance with the law. An accounting firm will also ensure a robust accounting system, which will give you a reliable and actionable financial base to make business decisions.

Expertise of an accounting firm is the key to your business success

With Mighty Glory Corporate Solutions, you get a wide range of accounting services delivered by a team with substantial industry experience. We offer a deposit-free accounting service with complete client confidentiality and a transparent fee structure. If you are in search of a professional accounting firm, then you may want to explore the services such firms offer. Here are some types of services that an accounting firm usually offers business: Singapore citizens, needing domestic care, can get support from Singapore government through the foreign domestic worker (FDW) levy concession. FDW employers who meet the criteria can qualify for a S$60 monthly concessionary rate.

The following are the employer qualifications for the FDW levy concession:

One has to be a Singapore citizen.
Living with a child under 16 years old.
Living with an elderly person 67 years old and above.
Living with a person with disability (PWD) who needs help with at least one daily living activity such as showering, dressing, feeding, or toileting.

Applications for the FDW levy concession must be submitted by qualified individuals. If you have a minor or elderly relative or family member and is qualified for the levy concession, you can follow this link to apply online. The application for FDW levy concession for a PWD is coursed through the Agency for Integrated Care (AIC). Please follow this link for your PWD application. Please collect the information of the employer, foreign domestic worker and the eligible person (i.e. the person who needs care) to complete the form and application. No application is necessary if you need the foreign domestic worker for your care or your child’s. If you or your spouse is a Singapore citizen, the levy concession will automatically start on your 67th birthday or upon your child’s birth and will continue until his or her 16th birthday provided that he or she is a Singapore citizen, or on the date your child is granted the Singapore citizenship. The FDW levy concession is granted for one FDW per eligible person, with a maximum of two FDW per household. The monthly concessionary rate can be as much as S$120 for FDWs hired to care for an eligible person who needs permanent assistant on at least three daily living activities.

Conclusion

Effective 1 September 2019, the FDW levy concession coverage will include employers needing domestic care for an extended family member or a friend living with them, provided the eligible person is a Singapore citizen, as opposed to the previous limitations of the levy to immediate family members. All existing qualifications applied to immediate family members will also apply to the expanded FDW levy concessions. Connect with us today to discuss more on the other personal tax reliefs and how we can incorporate them to your personal individual income tax. We look forward to helping you identify your business and personal needs and provide you with efficient and holistic solutions.

Introduction And Impact Of SORA On Corporate Borrowers

by Mighty Glory Corporate Solutions | 24 Sep 2019 | Finance, News

On August 30, The Monetary Authority of Singapore (MAS) announced the transition of the interest rate benchmark from SOR to SORA. The USD reliant Swap Offer Rate (SOR) will cease to be relevant upon the imminent discontinuation of the USD Libor or the London Inter-bank Offered Rate. The Association of Banks in Singapore (ABS) and the Singapore Foreign Exchange Market Committee (ABS-SFEMC) studied several replacement options and concluded on the viability of SORA.

What is SORA?

The Singapore Overnight Rate Average (SORA) is an interest rate benchmark pegged on actual transactions. It is the weighted average rate of all overnight cash transactions brokered in Singapore from 9:00 am to 6:15 pm and is published daily on the MAS website at about 6:30 pm.

Why is there a need to transition?

The UK regulatory authorities recently announced the discontinuance of the USD Libor by the end of 2021. This will take away one of the major inputs in the computation of SOR. The volume-weighted average forex rate of USD and SGD is another SOR factor that is looked into as extraneous and causes extreme volatility of rates.

Are there any options aside from adopting SORA?

Aside from adopting SORA, ABS-SFEMC is also looking into two other options – reforming SOR and enhancing SIBOR. Reforming SOR would mean replacing USD Libor with another component. In the US, the Alternative Reference Rate Committee (AARC), endorsed the recommended alternative, the Secured Overnight Financing Rate (SOFR). The SOFR is published by the Federal Reserve Bank of New York at about 8:00 am and is the overnight measure of the cost of borrowing money. However, producing forward-looking benchmarks using SOFR is too complex. Furthermore, SOFR is not intended for the derivatives market and is not expected to be in use until late 2021.

Enhancing the SIBOR is looked into as another option to SOR. The SIBOR (Singapore Interbank Offered Rate) reflects the rate at which banks are willing to lend and is already in use in various financial products, but not on derivatives. However, due to the structural shifts in banks’ sources of funding and derivatives markets towards overnight interest rates benchmark referencing, this option proves to be unsustainable.

Why is SORA the recommended option?

SORA is liquid and deeply reflects the daily trends and conditions of the SGD money markets. Using SORA as a benchmark is aligned with global trends and the transition will result in significant synergies in the global trading capabilities of derivatives. This will put the SGD market ahead in the global trends, encourage and apply best practices and keep domestic derivatives competitive and attractive in the global markets. Daily SORA has been published by the MAS since July 2005, providing accurate data for historical analyses on prices, risks, and market trends.

What happens to legacy SOR contracts?

Existing SOR contracts which will expire after 2021 will remain as is for now. However, expect your bank to notify you regarding the transition in due time. They will provide alternative loan packages that will replace the current SOR-referenced contract to be applied to its remaining term.

How will the transition impact corporate borrowers?

The transition from SOR to SORA is deemed favorable to corporate borrowers. The elimination of the USD/SGD forex factor in the interest rate computation will hugely improve the volatility of rates. The compounded 6-month SORA is more stable and lower than SIBOR, SOR and other benchmarks.

There will be no immediate impact before the end of 2021 and existing SOR referenced contracts will remain as is. MAS and ABS-SFEMC are keeping close tabs on the transition process, making sure the market functions continuously, with the least disruption and hassle to end-users as possible.

Ample communication and public information dissemination will be in place, while banks will be required to provide their clients with enough time, information, and guidance on loan restructuring and contract switching as necessary. Corporate service providers in Singapore such as accounting firms and business outsourcing firms will also be on hand to assist their clients in a smooth transition.

Connect with Mighty Glory today to know more about the transition and to discuss your financial contracts and options. We look forward to helping you with your business needs and in meeting your company compliance requirements in Singapore by providing you with the efficient and holistic solutions.

Return of Data Register Pte Ltd

by Mighty Glory Corporate Solutions | 23 Nov 2018 | News

Overview

Data Register Pte Ltd, a Singapore-registered company and previously known as the Company Register Pte Ltd was back again in 2018. The company sent fraudulent business letters to innocent business owners, demanding payments. Their letters were crafted to look legally official and even included the recipient companies’ details, which are registered with the Accounting and Corporate Regulatory Authority (ACRA).

Local organizations, which had unwittingly signed up to be part of its database, were subsequently asked to pay a yearly subscription fee of $490 for using the services. This resulted in 21,780 recipients inadvertently subscribing to the company’s services and paying the subscription fee. According to the authorities’ portals, Data Register is GST-registered with a live company status.

Starting from January 2014, ACRA investigated and found Data Register guilty of 500 charges of scamming and malicious practices, with another 604 charges taken into consideration. Even after ACRA started investigating the scam company, Data Register continued sending out payment letters to new subscribers and demanding payments from the previous subscribers. This elicited controversies that affected ACRA’s public standing and reputation. In June 2016, the company was ultimately fined with $200,000.

Data Register is Back

Data Register is apparently back after two years and a massive fine of $200,000. A sole proprietor reported her predicament with Data Register when the company returned in 2018.

She first received a letter and an email from the scam company in November 2013. The design, logo, and content of letter led her to believe that it was something official from ACRA. Hence, she followed the instructions, as printed on the scam letter.

After Data Register was punished in 2016, no correspondence was received. In July 2018, the sole proprietor got a new letter which demanded for the new subscription fee together with the past overdue. The modes of payments include cash, cheque and PayPal. The letter instructed to make the cheques payable to another entity called Singapore Data Register Pte Ltd. The Unique Entity Number (UEN) and registered office addresses for both companies, Data Register Pte Ltd and Singapore Data Register Pte Ltd, are different.

Business owners who were entangled with the scam company are advised to remain calm and ignore all correspondences from them.

The scam company also has its own registered domain.

Implementation Of CorpPass Replaces SingPass With Effect From 2018

by Mighty Glory Corporate Solutions | 25 Dec 2017 | News, Rules and Regulations

SingPass Update:

Businesses can still login to access statutory e-services with SingPass before 31 August 2018. On 1 September 2018, only users with a CorpPass account can access.

Original

Since 25 March 2017, all local businesses can use a new corporate digital identity (CorpPass) to access the Government-to-Business (G2B) digital services in Singapore.

With the increased digitalisation of businesses and platforms, a high volume of business transactions is being conducted through digital platforms with SingPass. However, there are security concerns over the sharing of SingPass login details with other individuals for transactions with statutory boards, such as ACRA, IRAS and CPF Board.

CorpPass allows for the conflation of such e-services – as a single corporate digital identity, it enhances the convenience and ease of management for businesses. For businesses that carry out transactions with multiple government agencies, CorpPass will remove the need for multiple login identities. Businesses can also allocate CorpPass’s various administrative roles to employees, allowing them to have a greater level of control and management.

Businesses have to obtain their CorpPass via online application. The use of SingPass will cease on 31 December 2017. From 1 January 2018 onwards, business entities can only transact with ACRA with the CorpPass accounts registered.

Do you have other related questions about CorpPass? Get in touch with Mighty Glory today, let’s discuss your business needs.

How Does The Increased Water Prices Affect Singapore’s Various Industries?

by Mighty Glory Corporate Solutions | 9 Mar 2017 | Case Studies, News

At the 2017 Singapore Budget, it was announced that water prices were to increase for the first time in 17 years by up to 30 percent. Although the government made a clear attempt to reassure the media that “the increase is estimated to be less than $25 per month for three-quarters of businesses”, it is clear that a price hike would have a big impact for industries that are extremely water-intensive

For Singapore, two industries that would most likely be affected the most is our wafer manufacturing and petrochemical industries. For example, Systems on Silicon Manufacturing Co. Pte. Ltd. (SSMC)’s manufacturing processes require a daily water usage equivalent to 6,500 4-room flats, and up to 130,000 cubic metres of consistently good quality water per month. Given that Singapore is currently the choice location for the world’s top wafer foundries and a key manufacturing location for electronics, it is important to know that the water price hike would have a direct impact on the costs of these businesses; and in turn severely affect Singapore’s global competitiveness in these industries.

The impact of the water price hike on non-domestic users (businesses)

Potable Water Prices

The key revisions to the water prices are:

A 30% increase in water price, phased over 2 years, starting from 1 Jul 2017.
Restructuring of the Sanitary Appliance Fee and the Waterborne Fee into a single, volume-based fee.

NEW Water Prices

Key revisions to the NEWater prices are:

From July 2017, there will be an increase in NEWater tariff and a 10% Water Conservation Tax imposed on NEWater.
The increase in Waterborne Fee will be phased over two years, in July 2017 and in July 2018.

Industrial Water Prices

Key revisions to the Industrial Water prices are:

The Industrial Water Tariff will be raised in one step from July 2017.
The Waterborne Fee increase will be phased over two years, in July 2017 and in July 2018.

Potable Water Prices for Shipping Customers

Singapore New Audit Exemption For Financial Periods Starting On Or After 1 July 2015

by Mighty Glory Corporate Solutions | 10 Oct 2016 | Accounting, Corporate Secretarial, News, Rules and Regulations

The amendments to the Companies Act include Singapore Audit Exemptions for smaller companies with financial periods on or after 1 July 2015. Let’s find out more.

With accordance to the legislative amendments introduced by the Companies (Amendment) Act 2014, the first phase of the legislative amendments has taken effect on 1 July 2015. Amongst the list of proposed amendments, one of the most significant changes would be the new audit exemption for “small companies” concept. In prior to the amendments, a company is exempted from having its accounts audited if it is an exempt private company (EPC) with annual revenue of $5 million or lower.

The amendments have been modified to include a broader set of criteria that defines those entities eligible for audit exemption, reflecting that audit is more of value to broader groups of stakeholders like suppliers, employees and customers than shareholders. This newly introduced concept allows more corporations to opt for audit exemption. This would in turn reduce compliance costs and responsibilities.

Thirteenth Schedule (Section 205C) of the Companies Act states that a company is considered a “small company” if:

It is a private corporation throughout the financial period in question; and
It satisfies any two of the three criteria below for each of the two preceding consecutive financial years:

The annual revenue does not exceed $10 million.
The value of total assets does not exceed $10 million as at the end of the financial year,
There are no more than 50 employees at the end of the financial year

The qualifying factors are consistent with Singapore Financial Reporting Standards for Small Entities approach, but are slightly different by incorporating additional requirements that the “small company” status to be determined through reference of a two-year period. There is limitation in revealing the reason behind this requirement but there has been justifications made to further justify the criteria, namely to safeguard against manipulation in order to achieve the audit-exemption status and to assess the eligibility on a longer term basis so that the impact of abnormal earnings are reduced and the company will not lose its exemption status due to a sudden yet short-lived increase in their earnings.

As the amendments are scheduled to take effect only for financial periods commencing on or after 1 July 2015, there have been transitional arrangements made for corporations that are formed before the day that the “small company” criteria starts. Companies, which are formed before the effective date, will still be qualified as a small company from the first or second financial period on or after the effective date, on the condition that it is a private company throughout the concerned financial period and meet the quantitative criteria for that financial period.

Once audit-exemption status has been granted to a company, the status shall remain valid until it is no longer a small company when:

The Quantitative Criteria is not being satisfied for two immediately preceding financial years; or
It ceases to be a private company during a financial year.

Do you have further questions regarding the New Audit Exemption in Singapore? or any concerns on your accounting and tax works? Please do not hesitate to ask Mighty Glory Corporate Solutions. We would gladly answer your questions and provide solutions to your business needs.

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