sundaymorningstaple wrote:+1
Spot on.
Of course, if he didn't declare as dividends, then the company would have paid taxes, which would have been okay, but without the "spend" it's still debatable whether it will fly or not. I expect to see a lot of "Entrepass" companies wound up this year as well as EP rejected because of people trying to abuse the intent of the Pass.
Not quite right. Dividends can only come out of profits. New companies in Singapore get a very significant tax break for the first three years. Thus, there is no corporate tax paid on the profits and if the employees take dividends in lieu of salary or directors fees, there is no personal tax paid either.
I have written in many posts through the years that people who do this are playing with fire when it comes to the gahmen. Employees should be paid in accordance with their work skills and value.
$8K is OK for a salary, but if the OP is also taking another 8 to 10 K in dividends as well, the red lights start to flash. OP, I don't have all the details about your company but I'd bet money that your EP rejection IS about how you run your company financially. Because, otherwise, holding real clients, and having contracts in hand has gotten lots of the exactly the EP you are trying to obtain, in exactly the same manner.
As a closing thought, I am aware of a PR who played this game for years... paying virtually zero tax in either his company or personal tax. Time to renew REP - no renewal.
. I wish I could inform all of you what made the difference from my original application, but since i don't know we can only guess.