Basic checklist on keeping accounts, preparing statement of accounts and filing income tax for sole-proprietors and self-employed persons including freelancers, commission agents, taxi drivers, private-hire car drivers and hawkers.
On this page:
1. Know your tax obligations
All self-employed persons must report the income earned from their business operations as business income, and not as salary. The business income is part of the total personal income which is taxed at individual income tax rates.
You are a self-employed person when you earn a living by carrying on a trade, business, profession or vocation. Generally, sole-proprietors and partners registered with the Accounting and Corporate Regulatory Authority (ACRA) are self-employed.
To check whether you are a self-employed person, please refer to Am I a self-employed person.
2. Decide on the accounting period
Every year, you declare your business income for a specific accounting period. The accounting period is usually a 12-month period of trade for which you calculate your profits or losses.
You should decide on your accounting period when you first start your business. Most businesses choose accounting period that ends on 31 Dec each year. You may choose an accounting period that ends on any date.
Example 1: Accounting period that ends on 31 Dec
Your business starts on 1 Apr 2020 and you choose to end your accounting period on 31 Dec. The relevant accounting periods and the respective YAs are:
| S/N | Accounting Period | YA |
|---|---|---|
| 1st Accounting Period | 01 Apr 2020 to 31 Dec 2020 | YA 2021 |
| 2nd Accounting Period | 01 Jan 2021 to 31 Dec 2021 | YA 2022 |
| 3rd Accounting Period | 01 Jan 2022 to 31 Dec 2022 | YA 2023 |
| 4th Accounting Period | 01 Jan 2023 to 31 Dec 2023 | YA 2024 |
Example 2: Accounting period other than 31 Dec
Your business starts on 1 April 2019 and you choose to end your accounting period on 31 Mar. The relevant accounting periods and the respective YAs are:
| S/N | Accounting Period | YA |
|---|---|---|
| 1st Accounting Period | 01 Apr 2019 to 31 Mar 2020 | YA 2021 |
| 2nd Accounting Period | 01 Apr 2020 to 31 Mar 2021 | YA 2022 |
| 3rd Accounting Period | 01 Apr 2021 to 31 Mar 2022 | YA 2023 |
| 4th Accounting Period | 01 Apr 2022 to 31 Mar 2023 | YA 2024 |
3. Keep proper records and accounts
You are required to keep full and accurate records and accounts of your business transactions from the start. These records and accounts must be supported with invoices, receipts, vouchers, and other documents.
IRAS will not accept estimate and improper records. For details, please refer to Keeping proper records and accounts.
4. Prepare statement of accounts
At the end of every accounting period, you must prepare the statement of accounts comprising:
- Profit and Loss Account
- Balance Sheet
For details, please refer to Preparing statement of accounts.
5. Prepare a 2-line / 4-line statement
From your statement of accounts, you have to extract the relevant figures and prepare a 2-line / 4-line statement for filing your Income Tax Return.
2-line statement
The figures that you need when your revenue is $200,000 or less from YA 2021 are:
| First line | Revenue |
|---|---|
| Second line | Adjusted Profit/Loss |
For YA 2020 and before, you will need to prepare a 2-line statement if your revenue is $100,000 or less.
4-line statement
The figures that you need when your revenue is more than $200,000 from YA 2021 are:
| First line | Revenue |
|---|---|
| Second line | Gross Profit/Loss |
| Third line | Allowable Business Expenses |
| Fourth line | Adjusted Profit/Loss |
For YA 2020 and before, you will need to prepare a 4-line statement if your revenue is more than $100,000.
For details, please refer to Calculating business income.
6. File income tax
Whether you need to file your taxes depends on:
- whether you received a filing notification or tax return from IRAS. IRAS will send out notification to file or issue a paper Income Tax Return (Form B/B1) between January and mid-March each year;
- the type of notification you received; and
- how much income you earned in the preceding year.
Scenario 1: You received a notification via SMS/ letter from IRAS stating that you are required to file
You are required to e-File your Income Tax Return via myTax Portal with your Singpass from 1 Mar to 18 Apr.
You are required to file regardless how much you earned in the previous year or whether your employer or agency has submitted your income to us.
You can refer to IRAS’ website for details on how to file your income tax.
Scenario 2: You received a paper Income Tax Return (Form B/B1) from IRAS
You will need to complete the paper Income Tax Return and mail it to IRAS by 15 Apr at the following address:
Inland Revenue Authority of Singapore
55 Newton Road
Revenue House
Singapore 307987
Even though you may have received a paper form from IRAS, you are highly encouraged to e-File your Income Tax Return via myTax Portal with your Singpass from 1 Mar to 18 Apr to enjoy the following benefits of e-Filing:
- Longer filing deadline of 18 Apr;
- Simplify tax filing and minimise errors as some tax information will be pre-filled in your electronic tax return;
- Ease of uploading supporting documents (if any) using the attachment features; and
- For eligible taxpayers, receive immediate tax bill upon successful e-Filing.
You can refer to IRAS’ website for details on how to file your income tax.
Scenario 3: You received a notification via SMS/ letter from IRAS stating that you have been selected for No-Filing Service (NFS)
You are generally not required to file your Income Tax Return.
However, you are encouraged to verify the details of your pre-filled and auto-included information and preview your Notice of Assessment at myTax Portal using your Singpass from 1 Mar to 18 Apr.
If you have changes to make, you can amend your income, deduction and reliefs (e.g. to claim for actual business expenses or to declare income not auto-included) by e-Filing an Income Tax Return at myTax Portal.
For more details, please refer to No-Filing Service (NFS) for self-employed persons (SEPs) under the Pre-filling of Income initiative.
Scenario 4: You did not receive any notification via SMS/ letter/ paper Income Tax Return from IRAS
Please check if you need to file an Income Tax Return by using the Filing Checker.
The Filing Checker will assess your requirement to file based on how much you earned in the preceding year.
Required to file based on Filing Checker | Not required to file based on Filing Checker |
|---|---|
e-File your Income Tax Return via myTax Portal with your Singpass during 1 Mar to 18 Apr. You can refer to IRAS’ website for details on how to file your income tax. | No action is required from you. [NEW!] From YA 2024 onwards (for income earned in or after year 2023) If you are a self-employed person and you require a tax bill (i.e. Notice of Assessment) or need to submit your income declaration for purpose such as to apply for government assistance scheme(s); you may e-File your Income Tax Return at myTax Portal with your Singpass from 1 Mar to 31 Oct. We will issue you an income tax bill once we finalise your tax assessment from end Apr onwards, depending on when you e-File. If you are unable to e-File via myTax Portal, you may either:
|
7. Pay withholding tax
When a non-resident person (including partnership with 100% non-resident partners) derives income of a specified nature (e.g. interest, royalty, director fees, technical service fees, etc.) in Singapore, such income may be subjected to withholding tax in Singapore.
In this regard, when you made such payment to a non-resident person, you are required to:
- Deduct the applicable withholding tax from the payment; and
- e-File and pay the withholding tax to IRAS by 15th of the second month from the date of payment to the non-resident.
The withholding tax rate varies according to the type of payment made to the non-resident person.
You can use the Basic Withholding Tax Applicability Calculator to determine if your payment made to the non-resident person is subject to withholding tax.
For more details, you can refer to Withholding tax.
FAQs
If I am doing freelance work from home, am I considered a self-employed person?
Yes. You are considered a self-employed person even if you operate your non-registered business from home and the money that you receive is considered your income from a trade.
Should I inform IRAS that I have registered a sole-proprietorship or become self-employed?
You do not have to inform IRAS immediately after you registered or started your business. Usually before 15 Mar, IRAS will send a notification to file your Income Tax Return which could be a:
- Letter of invitation to file
- Income Tax Return (Form B/B1)
- SMS message informing you to file
If you do not receive any filing notification from IRAS by 15 Mar, you can check if you need to file an Income Tax Return by using the filing checker or contact us for assistance.
When will my income be taxed?
Your income will be taxed in the year following the year the income is earned. For example, income earned in 2023 will be taxed in 2024.
2023 is known as the basis year and 2024 is known as the Year of Assessment.