November Law Gazette Tax Article

Should you change your business structure– A Tax Professional’s Angle. 

It was only a decade ago when the Accounting Corporate and Regulatory Authority was strongly encouraging unincorporated businesses or self-employed individuals in Singapore to corporatise. In this wave, many doctors, dentists, lawyers, accountants, consultants, commission agents, private tutors and even renovation contractors gradually moved to set-up their private limited companies. This was to protect themselves from being personally liable for business debts and other losses. Within a short span of time, the IRAS has apparently shifted its position by adopting the view that the tax planning option of changing the business structure not with the sole purpose to obtain tax advantage as tax avoidance. Perhaps this is the right time to ditch the use of the sole-proprietorship or partnership structure, once and for all. It is no longer viable to think that one can simply transfer business from a sole-proprietorship or partnership structure to a private limited company once it becomes profitable.

Click here for a pdf copy of the tax article