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Tax Information : Individuals : Profits Tax - What you need to know as a Self-Employed
 
 

Profits Tax - What you need to know as a Self-Employed
Am I a self-employed person
What are my tax obligations as a self-employed
Which tax return is for reporting my business profits / loss and how to report
How Profits Tax is computed
Can I pay less tax by electing Personal Assessment
What should I do if I disagree with the tax assessment or wish to apply for holdover of the provisional tax
Related Information and Pamphlets

Am I a self-employed person


If your income is derived from the buying and selling of goods, or from the providing of professional or personal services, you are considered as carrying on a trade, business or profession and a self-employed person. To put it simply, you are a self-employed person if you work for yourself and are not employed as an employee.

A self-employed person may be a sole-proprietor or a partner of a partnership business.

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What are my tax obligations as a self-employed


1.You are chargeable to Profits Tax on the assessable profits of your sole proprietorship or partnership business. You need to:
(a)Keep sufficient business records for at least 7 years;
(b)Prepare accounts based on your accounting records;
(c)Complete and submit a tax return for reporting business profits / loss;
(d)Notify liability to tax (see Notification of Chargeability for time limit and other details) unless you have already received the tax return from us;
(e) Notify cessation of business within 1 month of cessation;
(f) Notify change of address within 1 month of change; and
(g)Pay the tax.
Note: If you are employed as an Employee, you are not a self-employed and your income is chargeable to Salaries Tax.

2.If you receive a tax return from us, you must complete and submit it in time even if your business had ceased, was inactive or operating in losses.

3.Also see
(a) A Guide to keeping Business Records
The minimum records to be kept to comply with the tax law.

(b) Admissibility of Business Records kept in Electronic Form for Tax Purposes

(c)Business Registration
You have the obligation to apply for business registration.

(d)Employers
Understand your tax obligations as an employer.

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Which tax return is for reporting my business profits / loss and how to report


1.Sole Proprietorship throughout the basis period for that year of assessment

You should report the profits / loss of all your sole proprietorship businesses in Part 5 of your Tax Return - Individuals (B.I.R. 60).


2.Partnership, or Partnership changed to/from Sole Proprietorship during the basis period for that year of assessment

You should report the profits / loss of all your business in Profits Tax Return - Persons Other Than Corporations (B.I.R. 52).

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How to report, please see

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How Profits Tax is computed


See

Includes information on what constitutes assessable profits, basis period, exemption and deductions.

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Can I pay less tax by electing Personal Assessment

 

See

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What should I do if I disagree with the tax assessment or wish to apply for holdover of the provisional tax


See

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Related Information and Pamphlets


See

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2003 | Important notices | Privacy policy Last revision date: 15 August 2008