With the three accounting statements out of the way, it is now time to look at legal forms of tax reduction.

a) Structure of the Organization

The structure of the business will have a strong influence on the taxes paid by the company.  If you incorporate a Private Limited Company in Singapore, corporate taxation is at 17% although generous tax exemption schemes exist. If you were to incorporate Limited Liability Partnership, income is treated as personal income for the business partners.

b) Timing of Purchases

You can game your company expenses to offset high taxes from a good year. This is often because revenues are recognized on an accrual basis, when the sale is paid and not when the bills were collected.

c) Write-off accounts receivable

It is a bitter reality that many companies do not pay up after buying  a product or service. These bad debts can be written off tactically to gain some tax...