Tourism is one thing that Singapore is known for. It is popular for spectacular views, amazing service, and stunning accommodations that helped Singapore succeed in the tourism industry. Therefore, so many foreign investors come to Singapore to open their own hotels.
If you are in the hotel business, you know how difficult it is to run a hotel successfully. Retaining customers and bringing new ones is a difficult job too. There are various things to take care of while running this business. However, accounting is one of the things that need special attention.
If you run a hotel in Singapore or are planning to start one soon, then this article is directed towards you. This blog will help you understand the accounting details for a hotel business.
1. Accounting Services for your hotel based in Singapore:
A hotel, no matter the size, has complex accounting requirements. As a hotelier, you have to follow various tax requirements and compliances. For instance, IRAS has a collaboration with Tourism Board. It has allowed various plans for hoteliers that they can use. This way, they reduce the amount of tax you have to pay or use the incentives to improve the services offered.
Talking about the accounting services for your hotel, you need the following if you run a hotel yourself:
- Customized consultation to meet the tax compliances that are applicable in the sector.
- The preparation of accounts and financial statements along with the monthly and yearly financial reports.
- You can also take up auditing for your hotel in Singapore.
- Support in the application for various tax incentives available for tourism facilities.
Even if you as a hotelier do not maintain bookkeeping regularly, you still need accounting software to streamline all the details. These should store the information about the client payments, the services, the discounts, and other tax details.
Apart from these details, a hotelier must comply with the rules that IRAS has imposed.
2. All about the property tax for hotels in Singapore:
Hotel owners in Singapore have to pay Singapore property tax that is calculated in a different way compared to citizens. The assessment of Singapore hotels is conducted on the basis of the annual value of their rooms. A property tax is imposed at a defined percentage of the gross amount of the receipts that they record in the previous financial year.
The annual value assessment rate is fixed at 25%. It is essential to note that IRAS has imposed an annual value on food and beverages sold in a hotel. Since 2018, this rate is fixed at 10%.
Hotel owners in Singapore are also required to pay a tax called CESS to promote tourism by the Singapore Tourism Board. We can help you with the property tax calculation and submission after the documents are assessed in depth.
3. CESS Collection in Singapore:
The Singapore Tourism Board has imposed a CESS fee on the hotels that promoted it during tourism events. They collect this tax to bring to the attention of local and foreign tourists about the events that happen during the year.
The CESS tax was imposed in 1972 and it has significantly contributed to the rise of this sector. The CESS tax is applicable specifically to Grand Prix-related events. All Singapore hotels must pay the tax on all the transactions that are related to the event. You have to pay 20% or 30% of the gross receipts that come from each taxable transaction.
We offer specialized services for hotel businesses in Singapore to help you with the mentioned tax submissions and filings. With our accountants and our tailored accounting services, you can work with the dedicated services related to the levy of the CESS fees.
4. Incentives for tourism business in Singapore:
The Singapore Tourism Board has enabled two incentive schemes for hotels in Singapore. They are:
- The Double Tax Deduction for Approved International Fair using which they encourage Singapore businesses to participate in international trade fairs.
- The Double Tax Deductions for Inbound Tourism Promotion using which the companies are encouraged to promote internal tourism.
With our tailormade and dedicated accounting services for your hotels in Singapore, the tax filing and submissions become easy to handle. Contact us to know more.