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Singapore Income Tax: Are Your Jobs Support Scheme (JSS) or Job Growth Incentives (JGI) COVID-19-Related Payouts Taxable?
Tax season is upon us once more, with the deadline for filing income tax not far off on 18 April 2021 (note that for paper filing instead of e-filing, the deadline is 15 April 2021).
In light of the global COVID-19 outbreak, a series of support measures was introduced in 2020 to help businesses and individuals ease their cash flow, with many of them extended in 2021. These measures have come in the form of cash payouts, wage subsidies or grants, and there can be confusion about which of them will impact the tax we pay this year.
The Inland Revenue Authority of Singapore (IRAS) has released a guideline which explicitly covers the income tax treatment of COVID-19-related payouts to businesses and individuals. The information is as follows:
What Covid-19 Related Payouts are not taxable?
The following payouts are not taxable either because a specific exemption has been granted to exempt the payouts from tax or the payouts are not income in nature:
What Covid-19 Related Payouts are taxable?
The following payouts are taxable, being revenue receipts of a business, in accordance with general income tax rules:
Tax deductions on Work-From-Home expenses
While not strictly Covid-19-related, working from home has become a common practice due to the coronavirus, so a lesser-known tax deduction on WFH expenses has suddenly become important to know. You can read more about this here.
Remember to file them on time!
Failing to file income tax on time is a crime and you may be forced to pay a fine or even summoned to court. Failure to file your tax returns for two or more years can even result in imprisonment. Hopefully the information above will assist our Towkays in filing their taxes timely and without error.
For business related tax returns, the adoption of compatible payroll software for a company would go a long way in making the filing process as simple and fuss-free as possible. You can read our take on the best payroll software for Singapore SMEs as well.
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