On or about 2 December 2019, the Income Tax Act — Income Tax (Deduction for Expenditure of Qualifying Individual under Section 14ZD) Rules 2019 was updated on the Government Gazette.
The rules are the Income Tax (Deduction for Expenditure of Qualifying Individual under Section 14ZD) Rules 2019 and came into operation on 2 December 2019.
This amendment introduces a prescribed deemed expense ratio for tax resident individuals who are self-employed commission agents (i.e. general commission agents, insurance agents, real estate agents, and remisiers) earning gross annual commission income of up to $50,000 in respect of which there are deductible outgoings or expenses.
To ease tax compliance, these commission agents will be allowed to claim tax deduction based on either
- a prescribed deemed expense ratio, set at 25% of gross commission income; or
- the actual amount of expenses incurred in the production of their commission income.
This will be effective from YA 2020, i.e. in respect of income earned in 2019.
Source: Singapore Status Online, 2 December 2019