O o O o,
U sure a not, there is something called post balance sheet event
(FRS 10.8).
If u don't know what is FRS, let me tell u. This is called
the financial reporting standard of the Republic of
Singapore.
FRS
10.8
a) Those that provide evidence of conditions that
existed at the balance sheet date (adjusting events).
An entity shall adjust the amounts recognised in its financial
statements to reflect adjusting events after the balance sheet
date.
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Don't try to say balance sheet is only for "Company" and not
"sole proprietorship or LLP". Because FRS is used to determine how
much tax should IRAS draw from a self-employed.
So long as the partnership's intent takes effect before the
financial year 2007, the amount of taxable income will still be
adjusted. So what u have try to argue has fallen prey to
this FRS rule.
Uncertain, you have once jump into conclusion
without reading the details of my discussion with
M13, hence I believe it is better if I ask if you
have read the following statement from Maurizio13
Ask this of you, a businessman with a chargeable income of $80,000
for year of assessment 2007 and tax charge of $4,300, decides to keep away
from paying tax by giving his wife a 50% of his
sole proprietorship
company shares, thereby reducing their total tax payable
from $4,300 to $1,800.
(My original
figures for tax payable was wrong as pointed out by
jojobeach in page 16, corrected figures in blue.)
The businessman effectively cheated IRAS by avoiding the
difference of the two tax payable, which is $2,500.
Did he commit tax evasion?
I am fully aware what is required by IRAS as they are clearly
stated in with website, including the part on balance sheet.
http://www.iras.gov.sg/irasHome/page01.aspx?id=1262
Since Maurizio13 suggesting here is about one could evade tax by
switching a company from sole proprietor status to a partnership
and splitting the income between 2 person. hence my question
is,
a) Even taking into consideration of FRS 10.8, how can you
justify to IRAS you need to pay 50% of the company's profit
to someone who never exisit in your company during FY07?
We are talking about a shareholder here, not some bad debts
provision, WIP, stocks adjustment, assets
reclassification etc.
b) How would you do your income tax filing since, for Sole
proprietor, you can only file through your personal income tax
returns, while for a partnership company you must file through a
Company Income tax returns which will send to the company
seperately at the end of first financial year?
