The Draft tax computation is generated when you as a user click on the APPROVE ALL button in the Workspace tab.
Upon clicking the button, the system prompts the user about any validation errors that are present in tallying ledger items to P/L items. The system also warns the user about any open OSIs. You can either choose to resolve these issues or continue without fixing them.
You are also prompted to indicate if the company meets the qualifying conditions for Form C-S.
When the CONTINUE button is clicked, you are shown a message that says draft tax computation is being generated. This will take a few seconds. Once the computation is ready, you are notified and the tax computation is made available under the Draft Tax Computation tab.
Note: When new changes are made to the Workspace after generating the draft tax computation once, you will have to re-generate the draft computation by clicking on APPROVE ALL button again in the Workspace, for the changes to take effect in the draft tax computation.
Note: The Draft Tax Computation will auto save any changes made to it.
Here is a list of the different tabs on the tax computation sheet,
Formulas - This is a code in our own tax language - TDL. This can be used to make changes in the draft computation. More information will be provided in an article on TDL.
Contents - Schedule listing of the computation
Company's Particulars - Your company details provided at the time of Assessment creation.
Tax Computation - The actual draft tax computation. The system automatically updates all the fields of this form based on the Workspace ledger items, labels added and from fixed assets.
Profit and Loss - The PnL is shown in this tab. The systems automatically updates all values from the PL Accounts tab in the Workspace and computes the Net Income.
Tax Adjustments - This tab is shown only when there are accounts in the Workspace that have that have part deductible and part non-deductible expense or part taxable and part non taxable income. These accounts appear on Tax Adjustments tab as schedules. If an account has no adjustment or if it is fully adjusted it wont show in the Tax Adjustments tab.
Other Schedules - If you would like any PL account to appear in Other Schedules tab, you can select it from the PL tab under the column 'Show on Computation'.
Medical Expense – This sheet is auto populated by the system based on the labels added in the Workspace. Accounts with Remuneration labels and Medical Expense label are added in the tab and all calculations are done by the system automatically. The final computed disallowed expense amount is reflected in the Tax Computation.
R&R Cost Schedule – This sheet is auto populated by the system based on Fixed Assets tab in the Workspace. R&R cost is calculated for Fixed Assets that fall under Section 14Q.
CA Additions - This sheet is auto populated by the system with all the New assets (categorised based on Purchase date of the asset and the YA of the assessment) that are available in the Fixed Assets tab (in Workspace). HP and PIC New assets are also listed in this sheet.
CA Continued - This sheet is auto populated by the system with all the Continued assets (categorised based on Purchase date of the asset and the YA of the assessment) that are available in the Fixed Assets tab (in Workspace). HP and PIC Continued assets are also listed in this sheet.
CA Disposed - This sheet is auto populated by the system with all the Disposed assets that are available in the Fixed Assets tab (in Workspace). PIC Disposed assets are also listed in this sheet.
Capital Allowance Summary – This provides the total CA, total BC and total BA values and is auto calculated by the system.
FX - This tab appears only when the functional currency of the assessment is not SGD. The tab will list the conversion rate referenced from MAS for every month and then calculate the average rate to be used on the Tax Computation tab.
You can make the necessary changes on the Draft Tax Computation and the changes are auto saved. Once you are done with the changes, you can click on SUBMIT FOR REVIEW/SUBMIT TO MANAGER/APPROVE ASSESSMENT button depending on the role you currently hold in that assessment.
Now let’s look at each of the tabs in draft tax computation and their functions.
Contents Tab
This tab shows if you have generated a Form CS or Form C. Following which the contents of the draft computation is listed one by one. Supporting Schedules are listed starting from the Tax Adjustments tab.
Company's Particulars Tab
This tab lists the details of your assessment including client company name, Year of Assessment, Currency etc.
Tax Computation Tab
This is the main tab that shows the net income and the Net Tax Payable for the company. Here is the detailing of how the numbers are obtained on the tax computation in our tool,
1. Net Profit/(Loss) before Tax as per Financial Statements – This is the amount (Income-Expense) obtained from the Tax Classification tab in the Workspace which is read in from the GL/PL you have uploaded
2. Less: Separate Source Income – Accounts that are labelled as Separate Source Income in Workspace will be displayed in this section in the Draft Computation. The Separate Source label is displayed on the draft computation.
3. Less: Non-Taxable Income – Income accounts that are non-taxable are listed in this section. Account names as in the PL are listed on the draft computation if the GL account has been mapped to the PL account. If the mapping is not done, the GL account name as in the Tax Classification tab will be displayed on the draft computation.
4. Add: Non-Deductible Expenses – Expense accounts that are non-deductible in nature are listed in this section. Account names as in the PL are listed on the draft computation if the GL account has been mapped to the PL account. If the mapping is not done, the GL account name as in the Tax Classification tab will be displayed on the draft computation.
5. Less: Deduction for Renovation or Refurbishment under Section 14Q – The 14Q deduction amount from the R&R tab is displayed here.
6. Add: Deemed Income - Enhanced Allowances / Previous PIC Deductions – Manual field for you to enter any additional deductions
7. Less: Further Deductions – Manual field for you to enter any additional deductions
8. Add: Balancing Charge (BC) – Obtained from the Capital Allowance Summary tab
9. Less: Unutilised Capital Allowances brought forward – Calculated automatically by the tool using BTC formulas
10. Current Year Capital Allowances – Obtained from Capital Allowance Summary tab
11. Balancing Allowance (BA) - Obtained from Capital Allowance Summary tab
12. Unutilised losses brought forward - Manual field for you to enter any additional amounts
13. Add: Separate Source Income – Same amount as in Less: Separate Source Income is added back here
14. (Less) Rental Expense – Obtained from the Rental Income tab
15. Less: Unutilised donations brought forward - Manual field for you to enter any additional amounts
16. Donations to approved institutions of public character (Enter 2.5 times the donations made) - Manual field for you to enter any additional amounts
17. Less: Exempt amount - Calculated automatically by the tool using BTC formulas
18. Tax @ Rate - Calculated automatically by the tool using BTC formulas
19. Less: Foreign Tax Credit - Manual field for you to enter any additional amounts
20. Less: Corporate Income Tax (CIT) rebate - Calculated automatically by the tool using BTC formulas
21. Less: Tax deducted at source - Manual field for you to enter any additional amounts
22. Net tax payable / (repayable) - Calculated automatically by the tool using BTC formulas
23. Less: Tax previously assessed - Manual field for you to enter any additional amounts
24. Additional tax payable / (tax discharged) - Calculated automatically by the tool
25. Unutilised capital allowances c/f - Calculated automatically by the tool using BTC formulas
26. Unutilised losses c/f - Calculated automatically by the tool using BTC formulas
27. Unutilised donations c/f - Calculated automatically by the tool using BTC formulas
An assessment with currency other than Singapore Dollar, Tax computation tab will be populated with the foreign currency and SGD values as shown below,
For non SGD currency, you will also see the FX tab come up with the conversion rate referenced from the Monetary Authority of Singapore (MAS) for every month from January to December. The average of the 12 rates is used on the Tax Computation tab.
Tax Adjustments Tab
Accounts that have a part deductible and part non-deductible amount will appear in the Tax Adjustments tab. This applies to accounts that have part taxable and part non-taxable amounts as well. If an account is entirely non-deductible for example Depreciation, it will not be listed in the Tax Adjustments tab.
Other Schedules Tab
You can choose for accounts to appear in this tab by selecting the account in PL Accounts tab under the column Show on Computation. This tab is completely manual and you can use it for explaining accounts further.
Note:- Accounts that appear in the Tax Adjustment tab will not be repeated in the Other Schedules tab.
Medical Expense Tab
Accounts marked with labels Medical Expense and Remuneration will appear in this tab. All calculations in the tab are automatic and the final disallowed amount is updated in the Tax Computation automatically as well.
R&R Cost Schedule
The R&R tab is populated when there are fixed assets that fall in the section 14Q Deductions. All calculations in the tab are done automatically and the tax computation is updated automatically as well.
CA Additions Tab
This tab is populated with all the new assets (additions) for YA of the assessment. Hence all the assets marked with Status New in the Fixed Assets tab in Workspace will appear in this tab. The CA-Additions tab also displays the New assets that fall under Hire Purchase and PIC categories as well.
CA Continued Tab
This tab is populated with assets that are continued from previous years (exisitng assets). Hence all assets marked with Status Continue in the Fixed Asset tab of Workspace will appear here.The CA-Continued tab also displays the old assets that fall under Hire Purchase and PIC categories as well.
CA Disposed Tab
Assets that are marked with a Disposed Status in the Fixed Assets tab of Workspace are populated here. Disposed assets that are PIC in nature are also captured in this tab.
When your assessment has multiple rates, the CA-Disposed tab will display the assets according to the rates they fall under.
Capital Allowance Summary Tab
CA Summary tab is where the calculations that will go on the Tax Computation tab are done automatically by the tool. This tab will calculate the amounts for,
Total Capital Allowances for current YA
Total BA
Total BC
FX Tab
This tab only becomes visible when your assessment has a functional currency other than SGD. FX tab shows the conversion rate referenced from Monetary Authority of Singapore (MAS) for every month from January to December. The average of the 12 rates is used on the Tax Computation tab.
What’s Next?
Do you want to know more about the Reviewer’s role in an assessment? Click on Reviews.