Seminar 2

Question 4 Fill in the figures in the yellow highlighted cells

Part (i)
Adjusted trading profits 430,000
Less: YA 2021 CA -390,000
40,000

Interest income – Country X

80,000
(72,000/0.9)

Dividend income – Country X Exempt

Royalty income – Country Y
35,000
(33,250/0.95)
Dividend income – Country Y Exempt
Chargeable income 155,000
Less: Partial exemption of Chargeable
income
75% on first $10,000 -7,500
50% on next (155,000 – 10,000) -72,500
Net Chargeable income 75,000

Tax@ 17% 12,750.00

Less: Foreign tax credit
Interest income – Country X (Note 1) -6,580.65
Royalty income – Country Y (Note 2) -1,750.00
Pooling basis (Note 3)
Net Tax payable 4,419.35

Note 1: Singapore tax

80,000/155,000 x 12,750
6,580.65
FTC (lower of Singapore tax or foreign
6,580.65
tax)

Note 2: Singapore tax

35,000/155,000 x 12,750
2,879.03
FTC (lower of Singapore tax or foreign
1,750.00
tax)

Note 3
Computation of FTC under FTC pooling system
Total Singapore tax payable on
income qualifying for FTC
(80,000 + 35,000)/155,000 x 12,750 -9,459.68
Total foreign tax paid (10% x 80k + 5%
9,750
x 35k)

FTC = lower of total Singapore tax

-9,460
payable and total foreign tax paid
e yellow highlighted cells
Part (ii)
430,000
-390,000
40,000

* common mistake: is
dividing by 0.9 (72k/0.9)
80,000 and divide againby 0.85.
Only foreign withholding
tax you suufer. Don’t
suffer copr tax. Do not
regross 2 times
Exempt

35,000

Exempt
155,000

-7,500
-72,500
75,000
Singapore effective tax rate
12,750.00 8.23%

(9,459.68)
3,290.32

Foreign tax Excess foreign tax

10% x 80,000 1,419.35
8,000

6,580.65

Foreign tax Excess Singapore tax

5% x 35,000 1,129.03
1,750

1,750.00
Seminar 2
Question 4 Fill in the figures in the yellow highlighted cells
Part (c)
Adjusted trading profits 430,000
Less: YA 2021 CA -390,000
40,000
Interest income – Country X
80,000
(72,000/0.9)
Dividend income – Country X
60,000
(48,450/0.95/0.85)
Royalty income – Country Y
35,000
(33,250/0.95)
Dividend income – Country Y Exempt
Chargeable income 215,000
Less: Partial exemption of Chargeable
income
75% on first $10,000 -7,500
50% on next (200,000 – 10,000) -95,000
Net Chargeable income 112,500
Singapore effective tax rate
Tax@ 17% 19,125.00 8.90%
Less: Foreign tax credit
Pooling basis (Note 1) (15,566.86) > still got sg sourced incme subjected to
Net Tax payable 3,558.14

Note 1
Computation of FTC under FTC pooling system
Total Singapore tax payable on
income qualifying for FTC
(80,000 + 60,000 + 35,000)/215,000 x
15,566.86
19,125
Total foreign tax paid (10% x 80k +
21,300.00
(60,000 – 48,450) + 5% x 35k)

FTC = lower of total Singapore tax

15,566.86
payable and total foreign tax paid
Singapore effective tax rate

sg sourced incme subjected to tax

Seminar 2
Question 4 Fill in the figures in the yellow highlighted cells
Part (d)
Adjusted trading profits 430,000
Less: YA 2021 CA -390,000
40,000
Interest income – Country X
80,000
(72,000/0.9)
Dividend income – Country X
60,000
(48,450/0.95/0.85)
Royalty income – Country Y
35,000
(33,250/0.95)
Dividend income – Country Y
45,000
(36,000/0.8)
Chargeable income 260,000
Less: Partial exemption of Chargeable
income
75% on first $10,000 -7,500
50% on next (200,000 – 10,000) -95,000
Net Chargeable income 157,500
Singapore effective tax rate
Tax@ 17% 26,775.00 10.30%
Less: Foreign tax credit
Pooling basis (Note 1) (22,655.77)
Net Tax payable 4,119.23

Note 1
Computation of FTC under FTC pooling system
Total Singapore tax payable on
income qualifying for FTC
(80,000 + 60,000 + 35,000
22,655.77
+45,000)/215,000 x 19,125
Total foreign tax paid (10% x 80k +
(60,000 – 48,450) + 5% x 35k + 20% x 30,300
45k)

FTC = lower of total Singapore tax

22,655.77
payable and total foreign tax paid
Singapore effective tax rate