Singapore is making life easier for over 100,000 commission agents in 2024 by introducing pre-filled income information on tax forms.
Delivery workers may claim tax deductions for business expenditures based on a predetermined fraction of their yearly gross income rather than the actual amount of permissible business expenses.
Easier Method
On Wednesday, Mar. 6, the Singaporean government's tax agency, the Inland Revenue Authority (IRAS), announced new measures meant to make submitting self-employment taxes easier.
The tax authorities claimed to have obtained revenue information on commission earners from around 650 commission-paying companies. About 700 companies were asked to provide the data, but just a few had done so by the Mar. 1 deadline. IRAS said they would get more accurate results from their tax returns if they had pre-filled commission income information.
Claimable FEDR
Meanwhile, the fixed expense deduction ratio (FEDR) may also be automatically calculated for qualified commission agents.
Based on a certain proportion of gross revenue, the FEDR permits eligible persons to deduct a certain amount for business costs. This is a less complicated procedure than seeking tax deductions for the actual amount of permitted company costs, according to The Straits Times.
The no-filing service is available to over 1.8 million taxpayers, and now certain commission agents may also use it.
Individuals using the no-filing service are exempt from submitting income tax returns. They only need to ensure that their income details are correct and that they are eligible for any tax relief.
The FEDR is now available to delivery workers, including those who rideshare for food delivery. This used to be restricted to commission agents, drivers of private vehicles, and taxis.
To be eligible, a delivery worker's gross income from all sources must be S$50,000 (about $37,000) or less per year. Moreover, they are limited to using a few different distribution methods, each with its own FEDR claimability.
Earnings from deliveries made by employees who work on foot, public transportation, or bicycles are eligible for a 20% FEDR. Those who transport goods by van may claim 60% of the cost, while those who utilize motorized personal mobility devices, power-assisted bicycles, or motorbikes can claim 35%.
IRAS said that any money received using different means of transportation should be subject to their respective FEDRs.
If a delivery worker uses a vehicle without an FEDR, for example, they will not be able to use FEDR at all. They will instead have to figure out how much money they can claim as a business expenditure for each delivery method.
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