Let’s be honest — corporate income tax is one of those things most business owners find frustrating.
You’re busy running your business, and the last thing you want to worry about is tax filing, deductions, and keeping up with IRAS rules. But whether you like it or not, it’s something you need to get right. Over the years, we’ve seen all sorts of tax headaches — late filing, guesswork figures, and claiming non-deductible expenses — all of which lead to IRAS sending you those dreaded red letters.
1. Four Common Mistakes We See All the Time
Forgetting filing due dates
Many SMEs wait until it is too late, before saying that they either forget or do not know the filing due date. IRAS has probably heard of this reason even before you started your business, so let’s try to be more creative.
Wrongful Claims
Claiming non-deductible or personal expenses as business expenses — things like family dinners, private vehicle transport, or even your Netflix subscriptions (don’t do it).
Poor Record-Keeping by Family-Owned/Managed Companies
Many family-owned companies have poor record-keeping practices and fail to keep sufficient supporting documents to substantiate their claims for purchases and expenses. IRAS’s stance on this is, no supporting document means non deductible, period.
Understatement or Omission of Income Due to Incomplete Recording of Revenue
A common mistake is making incorrect declarations of income by understating or omitting income sources. Property or other investment owners, heads up.
2. Why This Is a Problem
IRAS Query
“Incorrect filings may prompt an IRAS review. For instance, IRAS automatically cross-checks your corporate income tax declared revenue against your GST-reported sales. Even without advanced technology, discrepancies are easily detected—why risk unnecessary scrutiny?”
IRAS Audit or Investigation
An IRAS query is bad enough—but a full audit or investigation is far worse. With whistleblowers entitled to 15% of recovered taxes, can you afford to risk a whistle blowing from a disgruntled employee or tip-off from a rival? Ensure your filings are “zhun zhun”.
Fines & Penalties
Fines and penalties hurt, but the real damage is irreversible—imagine your business publicly named in an IRAS case. The reputational loss and customer exodus could be fatal. Compliance isn’t just about avoiding costs; it’s about survival.
3. Tax Planning 101: Only Two Ways to Reduce Tax
Don’t be misled by all the “tax-saving secrets” you see online. Buying property or private vehicle under company name does not effectively reduce your overall tax payable. If it does, rest assured IRAS would have closed up the loopholes.
The reality is, there are only two ways to reduce tax:
- Reduce Revenue — But do you really want to earn less? Probably not.
- Increase Expenses — But remember, not all expenses are deductible.
4. So What Expenses Are Deductible?
- Business Expenses
Costs directly related to earning income — staff salaries, rent, utilities. - Capital Allowances
Purchasing equipment? You can claim its cost over a few years instead of all at once. - Donations
Cash donations to approved charities can be deducted, but within limits.
5. Tax Planning for Business Owners: Real Questions We Get.
- “Should I buy stock in the company’s name?”
It depends — the company is taxed on gains, but you personally are not. - “How much should I pay myself?”
Salaries are subject to income tax, but dividends are not. For high earners, there’s a big difference between the top individual tax rate of 24% and the flat corporate rate of 17%. - “Can I buy property in the company’s name?”
Yes, but does it benefit you?. - “I am paying too much tax!”
We can review and see if you’ve missed any deductions.
6. How Athel Helps
At Athel Accounting, we don’t just file your tax and hope for the best. We make sure you stay compliant — without any unpleasant surprises.
- We ensure your accounts are accurate, so your tax filing is accurate too.
- Our calculations are always precise — we use automated tax software, so there’s no guesswork.
- We help you identify what can and cannot be claimed, avoiding costly mistakes.
- We advise you on how to pay yourself, claim expenses, and structure your finances for optimising tax positions.
If you’re tired of stressing over taxes or want to ensure you’re not leaving money on the table, let’s talk.
Athel Accounting is here to keep your tax compliant, accurate, and stress-free.
