Resources

Mar 2022
By Medinex Specialist Centre Team

Running your clinic or healthcare business can be challenging but rewarding. 

When it comes to filing personal tax, it would be helpful to know that there are tax benefits and concessions when you are both the owner and employee of your business or company. 

How to do your tax planning?

One way doctors can pay less tax is by careful tax planning to take advantage of tax reliefs, tax schemes, taking all of the allowed deductions and protecting those deductions from being phased out. The best time to start would be in the month of January. 

Top Tax Issues for Doctors

1. Taxable VS non-taxable allowance: What’s the difference? 

Taxable: You pay tax on wages, salaries, allowances, and bonuses. These are generally taxable unless specifically exempted by law or administrative concession.

Non Taxable: Reimbursement of expenses are not taxable. These include reimbursement of transport, Wi Fi expenses and IT equipment expenses.

2. Reporting of Director fees In Arrears VS In Advance: When do I need to declare?

In Arrears: For director’s fees approved in arrears, the director has already rendered the services for the year. However, the company must approve the director’s fee before they can be paid to him/her. Thus, the declaration is based on the AGM date.  

In Advance: For director’s fees approved in advance, the director has not yet rendered the services for the year. Therefore, the declaration is based on the period as and when the services are rendered. 

3. CPF Cash Top-up Relief VS Supplementary Retirement Scheme (SRS): Which should I choose? 

Supplementary Retirement Scheme: 

Under the SRS, withdrawal is only allowed after statutory retirement age. Today, the statutory retirement age is 62 but this is set to progressively increase to 65 by 2030. There is no age cap for when you must start your withdrawals, however, once you start making withdrawals, you need to withdraw the entire amount within 10 years. You will be taxed on 50% of any amount withdrawn.  

CPF Cash Top-up Relief:  

Only cash top-up is eligible for this tax relief. It does not apply when the top-up is done by transferal of funds from your own CPF Account to your own/family member’s Special/Retirement Account. Your Spouse/Siblings must not have an annual income of more than $4,000 in the preceding year. The CPF Cash Top-up relief amount is capped at $14,000. (maximum of $7,000 for self and maximum of $7,000 for family members)

4. How to Maximize your Tax Savings? 

Here are some tax strategies to consider:

• Personal reliefs: Earned income, SRS & CPF cash Top up Relief 
• Charitable donations: Tax deduction of 2.5x the donated amount. Unutilised donations can be carried forward by up to 5 years.
• For female doctors with families: The Working Mother Child Relief. Total relief capped at $80,000.
• Tax deductions for self-employed doctors: Allowable business expenses deductions & Medisave Top-up.

Proper accounting and tax compliance are essential for robust business growth. 

We provide the following services to help monitor your business’ growth and comply with the regulatory requirements : 

• Book-keeping (full-set accounts on a monthly, quarterly and yearly basis) 
• Payment Processing 
• GST Accounting and advisory 
• Corporate tax return preparation 
• Personal and partnership tax 
• Singapore tax structuring 
• Negotiation of tax incentives 
• Tax incentives and exemptions 
• Utilization of tax losses 
• Negotiation and dispute resolution