Tax Appeal

Pursuant to Section 11(1) of the Income Tax Act, miscellaneous income earned from Non-SP is subjected to tax based on Part B rates till financial year 2000. For this period, those MCs that fall under this category have been paying excessive tax due to high tax rates. In the budget statement for 2001, the Minister for Finance has announced the rate of tax applicable on the income of a body of persons (MC is one of the type) would be limited to the effective company tax rate, if this was lower than its effective rate of tax determined based on Part B rates. Because of this change, tax burden has been reduced substantially.

Having been the auditors and tax agent for MCSTs in the past 20years, it has come to our attention that most of the MCs which are subjected to tax under Section 11(1) failed to establish a fair and equitable basis to claim deductible expenses. As a result, excessive tax has been paid over the past years. The amount of tax over paid because of the ignorance ranges from $100,000 to $500,000.

We have handled many of such cases and they have been very successful. Upon our appeal for revised assessment on the ground of equity, IRAS has refunded the excess payment.

We would, therefore, like to take this opportunity to extend our services to all.

Our services consist of two stages. The initial stage is to review the tax history and past years' financial statements, give a report of our findings and advise the next course of action to be taken. The fee for this exercise ranges from $500 - $2,000 depending on the number of years involved, volume of work and complexity of the MC operation.
The second stage is to work together with the MC to formulate a basis to claim for relevant deductible expenses pertinent to the income. This may take a longer time and fee charged for this stage is subjected to the time spent by the level of staffs involved. Nevertheless, we will still provide an estimated fee. Alternatively, you may have your fee charged based on an agreed percentage of the amount of tax saved.

If you wish to have more understandings on the above preposition, please contact

Mr Tan Chin Ren at office Tel: 6533 7393 Ext. 129 , HP: 97513490 or email at tancr@tanchan-cpa.com.

Updated January 2006