It is getting towards that time of the year where you need to complete your tax return.
The filing of Form C or Form C-S (known as income tax return) is simply an income declaration for the year of assessment (YA), and it must be submitted annually to the Inland Revenue Authority of Singapore (IRAS).
It doesn’t matter whether you have had a profitable year or whether you have made a loss, there is still a requirement to complete Form C or Form C-S.
The Form C or Form C-S should be filled in by an employee who understands Singapore tax rules well.
However, the responsibility for the tax return will ultimately rest with the company's directors.
In Budget 2016, the CIT rebate increases from 30% to 50% of the corporate tax payable for YA 2016 and YA 2017, subject to a cap of SGD 20,000 for each year of assessment.
In Budget 2017, the YA 2017 CIT Tax rebate cap is revised upwards to SGD 25,000. For YA 2018, the CIT rebate is revised to 20% of corporate tax payable at a cap of SGD 10,000.
As announced in Budget 2016, the Singapore Government has adopted cost effective strategies and e-filing for Estimated Chargeable Income (ECI), Form C and Form C-S are mandatory from Years of Assessment 2018 to 2020 for the following group of companies.
1. YA 2018 – Companies with turnover more than SGD 10 million in YA 2017;
2. YA 2019 – Companies with turnover more than SGD 1 million in YA 2018; and
3. YA 2020 – All companies.
In effect, the Form C-S is a simplified version of the tax return. The IRAS will accept this version from small companies.
The company must meet all the four criteria in order to file Form C-S.
1. The company is incorporated in Singapore;
2. The company has an annual revenue (ie main source of income) of SGD 5 million or less (effective from YA 2017 onwards);
3. The company derives only income taxable at prevailing corporate tax rate; and
4. The company does not claim carry back relief, group relief, investment allowance, research and development tax allowance, foreign tax credit and tax deducted at source.
The company is also not required to submit financial statements, tax computation and supporting schedules with the Form C-S unless requested by IRAS.
If your company does not qualify to file Form C-S, you must submit Form C.
Together with Form C, you must file the company's financial statements, tax computation, and supporting schedules.
The IRAS will send a filing package to the registered company address by May of each year, commencing from the 2nd year following the incorporation of the company in Singapore.
The Form C-S can be completed online, and this has some associated benefits (i.e. 15 days extension to 15 December for e-filing).
For paper filing, both Form C-S and Form C must be completed by 30 November each year, which is 11 months after the end of the financial year-end. For e-filing, there is a 15-day extension to 15 December each year for both Form C-S and Form C.
In addition to completing the required form, other relevant documents must also be submitted together with Form C. Companies must include a tax computation including details of any asset acquisitions or disposals.
Companies must include the financial statements (prepared by the Singapore Financial Reporting Standards and Singapore Companies Act, Chapter 50).
Not submitting a tax return on time can be a costly mistake.
Every year many companies do not comply with the IRAS filing requirements.
If you find yourself in this position, you can expect the IRAS to issue a Notice of Assessment (NOA) based on the ECI submitted earlier by the company.
The tax forecast by IRAS must be paid despite the fact that it may not be accurate.
There may be fines for either late submission or late payment.
If all else fails, the relevant party will receive a court summons. The penalty, in this case, can be as much as twice the required amount of tax!
There is an appeals process should fines be imposed, but nobody wants to be in that position.
We offer assistance to companies in Singapore to complete and file the Form C / Form C-S.
Should you need any clarifications or additional information, please complete the quotation form and our tax service team will contact you for a no-obligation discussion.