Tax Guide for Clubs &

Associations
Loke Qi Min
Edna Tan Wei Qian
Pang Wei Ying
Huang Xiaoqi
 Agenda
• Classification of Persons
• Taxation of Clubs or Similar Institutions
• Deductions
• Capital Allowances
• Loss Carry-Back System
• Tax Rate
• Tax Computation
• Tax Rates & Tax Exemption Schemes
(Companies)
Taxation - Clubs &
Associations
Classification of Persons
 Classification of Persons
• Clubs or similar institutions
– Organized as a Not-for-profit
association/society
– Formed for social, recreational or leisure
purposes

• Members
– Persons entitled to vote at the general
meeting
Taxation for Clubs or Similar
Institutions
Taxation for Clubs or Similar
Institutions
Taxation for Clubs or Similar
Institutions
Taxation for Clubs or Similar
Institutions
 Taxation for Clubs or Similar
Institutions
• Club ABC Example
– More than 50% receipts are from
members
– Subject to tax on other sources of
income derived from dealings with non-
members
Taxation - Clubs &
Associations
 DEDUCTIONS

A deduction is a cost of earning income

from a particular source which is
deductible in arriving at the net income
from that source.
DEDUCTIONS
DEDUCTIONS
DEDUCTIONS
 DEDUCTIONS
Case :
The taxpayer was a transport
company. One of its drivers died of
accident. The taxpayer contested a
claim for compensation by the
deceased’s family.

The taxpayer eventually paid a sum to

the family and sought to claim a
deduction for both the compensation
 DEDUCTIONS
Held:
The compensation was deductible.

The legal costs incurred were not

deductible because it were not for
income earning purpose.
 DEDUCTIONS
Special deductions:
As incentives to encourage and
promote desirable economic
activities.

1.Research & 2.
Building
Developme modifications for
nt disabled
DEDUCTIONS
 CAPITAL ALLOWANCES

In place of capital expenditure, a

company may claim for a deduction
for the wear and tear of the fixed
asset known as ‘capital allowance’.
 CAPITAL ALLOWANCES
Examples:

Industrial
buildings and Intellectu
structures al
property
rights

Machinery
and plant
 CAPITAL ALLOWANCES

The person must carry on a trade,

business or profession
Has incurred capital expenditure on
acquiring the plant and machinery
Put to use in his trade, business or
profession
 CAPITAL ALLOWANCES

Capital expenditure is incurred by

the person before the date of
commencement of his trade
Regarded as having been incurred by
that person on the first day on which
he in fact carries on that trade.
CAPITAL ALLOWANCES
Taxation - Clubs &
Associations
 Loss Carry-back System
• Loss carry-forward:
– allowed to carry forward unutilized CA &
trade losses to offset future incomes
– Conditions:
• Deemed to be carrying on a business
• The business is under S11(1) and S11(2)
Not applicable for clubs that are not
deemed to be carrying on a business
Loss Carry-back System (con’d)
• YA 2006 onwards, losses incurred in
current year can be carried back
• Main features:
– Only current year unutilized CAs & trade
losses are allowed to be carried back for
1 YA preceding current YA
– Amount: Up to SGD100k
– carry on the same trade or business
– Given on due claim
Tax Rate
 Tax Rate (con’d)

If X > Y, the effective rate of tax will be

capped at Y.
 Example
Club ABC has chargeable income of $36,000 for
YA2007.
Tax payable :

Under Corporate Tax

Rate,
Taxation - Clubs &
Associations
 Tax Rates
• Flat Rate
• YA 2005 – YA 2007: 20%
• YA 2008: 18%
 Tax Exemption Schemes
• Partial Exemptions
• New start-up companies
YA 2008 Partial Exemptions
• Up to $300,000
• Companies on normal chargeable
income (excluding Singapore franked
dividends)
YA 2008 Partial Exemptions
YA 2008 Partial Exemptions
Company A’s chargeable income: $110,000
YA 2008 Partial Exemptions
Company B’s chargeable income: $500,000
 Tax Exemptions for new start-
up companies
YA 2005
• Full tax exemption on first $100,000
of normal chargeable income
(excluding Singapore Frank
Dividends)
• First 3 YAs
 Tax Exemptions for new start-
up companies
YA 2008
• Further 50% exemption on next $
200,000 of normal chargeable
income (excluding Singapore Frank
Dividends)
• Up to $300,000 of chargeable income
Tax Exemptions for new
start-up companies
 Tax Exemptions for new
start-up companies
• Companies that
do not qualify for
tax exemptions
under this
category will be
given partial tax
exemptions
THE END