Both local and foreign companies (an incorporated subsidiary or registered branch) in Singapore are subject to annual filing requirements from Inland Revenue Authority of Singapore (IRAS) and Accounting and Corporate Regulatory Authority of Singapore (ACRA).
ACRA Annual Filing Requirements
Each private limited Singapore company must file an annual return with ACRA signed by a director or secretary within one month of its annual general meeting (AGM).
The AGM must be held within 18 months from the date of incorporation; subsequent AGMs must be held every calendar year, with interval between each AGM not exceeding 15 months. The directors must table the company’s financial accounts in compliance with Singapore’s Financial Reporting Standards (FRS) framework. Financial accounts consist of Profit and Loss Account and Balance Sheet.
Annual Return is separate from a company’s financial accounts. It includes key information about the company’s legal status such as information about directors, secretary, shareholders, share capital, registered address, etc. The company is required to attach its audit/unaudited financial accounts along with the annual return except for dormant companies (i.e. no accounting transactions).
ACRA will normally send a letter to your company’s registered office about 30 days before the due date to remind you when your annual return is due.
IRAS Annual Filing Requirements
The Inland Revenue Authority of Singapore (IRAS) requires companies to file their annual income tax return by submitting a 1) tax computation; 2) audited/unaudited financial accounts; and 3) Form C. The filing deadline for corporate income tax return from Year of Assessment 2009 onwards is 31 October.
A tax computation is a statement showing the adjustments to the net profit/loss as per the accounts of a company to arrive at the amount of income that is chargeable to tax. Calculating corporate income tax liability is important as your net profit/losses alone does not provide an accurate picture of your taxable income. For instance, some of the expenses incurred by your company may not be deductible for tax purposes or some of the income received may not be taxable or it may be taxed separately as a non-trade source income. A company is still required to prepare and submit a tax computation even if it does not need to make any adjustment to its net profit/loss.
All Singapore companies (except dormant companies) are required to file either audited or unaudited accounts. Whether a company needs to file audited or unaudited accounts depends on the following:
The accounts, prepared in compliance with FRS framework, must be accompanied by the Directors’ Report and Statement by Directors.
If your company has filed full sets of financial accounts with ACRA (Accounting and Corporate Regulatory Authority) in XBRL (extensible Business Reporting Language) format, it is not mandatory to file the same with IRAS. However, companies are still required to submit a copy of their detailed profit and loss statement together with Form C.
Dormant companies (a company is considered dormant during a period in which no accounting transaction occurs) do not need to submit their accounts with Form C. Under certain circumstances dormant companies can also request waiver for submission of Form C. However, a dormant company must still submit its accounts to ACRA for its annual return filing, as there are no exemptions for filing of accounts with ACRA. Like exempt private companies, dormant companies can submit unaudited accounts to ACRA.
The Form C is a declaration form for a company to declare its income. All companies carrying on a trade or business in Singapore need to file Form C annually to report their income. This is regardless of whether the company is making profits or losses. The hard copy of the Form C will be sent to your company’s registered address by the end of March each year. Alternatively, you can download the form from the IRAS website.
Information captured in the Form C includes:
In addition, if your company has items listed in the following table in the Form C and tax computation for the Year of Assessment (YA), you will have to furnish the necessary additional information and documents relating to these items when submitting Form C.
|Items in the Profit & Loss Statement||Items in the Balance Sheet||Other items|
Bad Debts/Provision for Doubtful Debt
Motor Vehicle Expenses
|Addition of New Assets
Sale of Fixed Assets
Purchase of Shares
Purchase of Property
Gain/Loss on Sale of Shares
Gain/Loss on Sale of property
|Double Taxation Relief
The penalty for filing late or not filing Form C is paying a composition fee as notified to you by the IRAS. If you still fail to file the returns and composition fee, a Court summons can be issued to your company.
ECI (Estimated Chargeable Income) Form
Effective 1 Jan 2009, companies will also be required to declare the revenue amount in the ECI Form, in addition to disclosing revenue data in the Form C. ECI or Estimated Chargeable Income is an estimate of a company’s chargeable income for a Year of Assessment (YA) and must be furnished to the IRAS within 3 months after the end of the company’s accounting period for that YA. Failure to do so is considered a punishable offence. The revenue to be declared in the ECI form refers to a company’s main source of income and excludes items like gain on disposal of fixed assets. Even if the company estimates its chargeable income as zero, it still has to file a “Nil” ECI.
The ECI enables the Comptroller to raise an estimated assessment of tax to be paid with reasonable accuracy. Otherwise, the IRAS may estimate your chargeable income and send you a Notice of Assessment. Please note, this is only an estimate and the final assessment will be based on the actual income declared in the Form C. However, if you do not agree with even the estimated assessment, you must object in writing within 30 days from the date of the NOA (Notice of Assessment). Otherwise, the estimated assessment will be treated as final, even if the actual income based on your Form C and accounts submitted subsequently is lower than the IRAS estimates.
Important pointers while filling the ECI Form
The amount of ECI declared must be before the deduction of the exempt amount under partial tax exemption or tax exemption scheme for new start-up companies.
If you are claiming unutilized losses, capital allowances or donations brought forward from previous YA, your ECI amount must consider the unutilized losses, capital allowances, or donations claimed.
If you are claiming loss items under Group Relief System, the ECI amount must consider the loss items transferred or claimed under group relief.
Based on your tax return (tax computation, summary of audited/unaudited accounts and Form C), IRAS will assess how much tax you need to pay. IRAS will then send you a Notice of Assessment and Statement of Account. You have to pay your taxes within 1 month of receiving the Notice of Assessment. For taxes arising from the Estimated Chargeable Income (ECI), you can either pay the taxes at one go or by monthly instalments.
If you disagree with the tax assessment, you can contact the IRAS and proceed with the matter. However, you will still be required to pay your taxes within 1 month of the Notice of Assessment.