Financial compliance in Singapore is the ninth easiest in the world

But Budget 2018 changes could make compliance harder.

Singapore remains among the easier jurisdictions in the world for financial compliance, moving from 83 to 85 out of 94 this year, according to compliance firm TMF Group. “The country is known for its favourable tax system and ideal international business environment, and that hasn’t changed over the last 12 months,” it said.

TMF Group’s rankings places most complex locations near the first place and the least complex locations near 94th place. For a second year, the Cayman Islands came in as the least complex place for compliance from an accounting and tax perspective. Meanwhile, China and and Brazil were in first and second place, making them the most complex locations in the world.

However, TMF Group said announcements in the 2018 budget indicate there are changes afoot which may have a financial impact on businesses in Singapore.

It noted the CIT rebate, which reduces from 50% of tax payable capped at $25,000, to 40% of tax payable, capped at $15,000 (for assessment year 2018). “The 40% rebate is however an increase from the 20% that was announced earlier. This rebate will be extended to assessment year 2019 at 20% tax payable, capped at $10,000,” it added.

Meanwhile, from 2020 there will be changes to the partial tax exemption and start-up tax exemption schemes, lowering the rates, and levels of exemption.

The company noted that imported services will be subject to goods and services tax (GST) on or after 1 January 2020, with business-to-business imported services taxed via a reverse charge mechanism.