Re: To BirdbrainZ: And what substance do you currently have bolster this assertion?
The substance you seek has been given by another user on a different forum at the link #1 and the source of which has also been provided in link #2.
2. http://www.iras.gov.sg/irasHome/page..._New_CompaniesAbuse of Tax Exemption Scheme for New Companies
IRAS has observed a number of cases where shell companies have been used to take advantage of the tax exemption scheme for new start-ups and not for genuine commercial reasons.
These shell companies do not carry out any activities or significant activities and have no employee or few employees. Their accounts usually show relatively few transactions and low capitalisation (usually at $2).
Tax evasion/fraud is a criminal offence punishable under the law and the Court imposes severe penalties for such offences <-- (Link). ...
In respect of the relatively rare prosecution, it is the case of blatant abuse wherein even the paperwork is fictitious: 'Company convicted for abuse of tax exemption scheme for Singapore start ups' (July 15,2010) where "Alphalog claimed fictitious expenses amounting to $1.2 million as management fees paid to VEPL when no such services had been performed by VEPL."
Firstly, I would like to remind you that "According to Singapore Companies Act, any person (foreign or local) above the age of 18 can register a Singapore company", your reference puts their worth at beginning from $2.
I thus stand by my assertion that in my original example, IRAS would have difficulty prosecuting Mr X even if they had picked him up for investigation.
He may very well claim that his intention of creating so many companies is bonafide- to distinguish between nuances in his consultancy services, as well as (ridiculous as it might sound) in preparation for his eventual demise- for the convenience of estate division purposes amongst his harem of wives and mistresses.
In any case, and as first mentioned, it is "Zero tax for new Singapore companies on the first 100K annual profits for the first 3 years".
How much in terms of resources shall IRAS expand in persecuting the clown?
Does IRAS depend on mainly scare tactics to enforce its harebrained taxation laws?
But for such harebrained policies, would such tactics of evasion have even arisen in the first place?
My point remains, that it is ridiculous and unwise for IRAS to grant companies (aka a 'persona ficta') GREATER tax concessions then they do to real human beings (aka your average Singaporean). My contention is that the MOF did this (corp tax rt. 17%) merely as a flimsy trick to con foreign businesses into investing in Singapore, only to feel betrayed by a relatively less attractive personal income tax regime (top rt= 20%).
Unlike a company, a person has an identity that cannot be easily changed or replaced, as such, greater respect in terms of both rights and freedoms need be accorded to real people rather then 'persona ficta(s)'.
In short, the Singapore government is no friend of the poor nor the honest as it creates more and more flawed laws, stop gap, band aid measures towards 'growing' its economy. An arbitrary one wherein gambling is considered a valid and respectable occupation.
- 'Legal personality': [wiki]: "Legal personality (also artificial personality, juridical personalty, and juristic personality) is the characteristic of a non-human entity regarded by law to have the status of a person. A legal person (Latin: persona ficta), (also artificial person, juridical person, juristic person, and body corporate, also commonly called a vehicle) has a legal name and has rights, protections, privileges, responsibilities, and liabilities under law, just as natural persons (humans) do. The concept of legal personality is perhaps one of the most fundamental legal fictions. It is pertinent to the philosophy of law, as well as corporations law (the law of business associations)."
21Feb2011: Tax loopholes in SG that allow the cunning to CHEAT on personal income taxes