Below is some essential information for Singapore companies on corporate income tax and annual filing obligations.
The company’s income for the preceding financial year is the income for a particular Year of Assessment (YA).
If the company closes its financial year on 31 December 2016, its taxable income for YA 2017 is from 1 January 2016 to 31 December 2016.
If the company closes its financial year on 31 March 2017, its taxable income for YA 2018 is from 1 April 2016 to 31 March 2017.
The prevailing corporate tax rate is 17%.
a. The company must submit the Estimated Chargeable Income (ECI) within three months from the company’s financial year end.
b. The company must submit the Form C or Form C-S by 30 November of every year. If the company opts for e-filing, the due date is on 15 December.
The company must maintain a proper and robust system to keep the documentary records of its business transactions during the financial year.
Business records are source documents i.e. sales invoices, receipts, payment vouchers, bank statements, bank-in slips, general ledgers and other forms of documentary records that support the occurrence of related business transactions during the financial year.
The company must keep these business records for at least five years from the relevant Year of Assessment and be retrievable upon request by IRAS.
For example, for YA 2017 (i.e. the financial year from 1 January 2016 to 31 December 2016), the company must keep business records up to 31 December 2021 (i.e., five years).
For transfer pricing documentation, please refer to "Transfer Pricing Guidelines For Singapore Companies".
(A) ECI Form
Estimated Chargeable Income (ECI) is the company’s estimated income after deducting tax allowable expenses for the preceding financial year.
(a) The company is incorporated in the calendar financial year end is on 31 December 2016. The company must submit its ECI for the financial year ended 31 December 2016 to IRAS by 31 March 2017.
(b) The company’s financial year end is not 31 December, the company must submit the Forms “Request for Income Tax Return (Form C-S or Form C)" and "Notification of New Financial Year End” to IRAS once the company closes its first set of accounts.
(B) IRAS Tax Forms
There are two type tax forms – Form C and Form C-S.
To qualify to file Form C-S, a Singapore incorporated company must fulfil all the following criteria:
1. The company has annual revenue of SGD 1 million or less;
2. The company only derives taxable income at corporate tax rate; and
3. 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.
For filing of Form C-S, there are no requirements to file financial statements, tax computations and supporting schedules unless requested by IRAS.
If your company does not qualify to file Form C-S, the company must file Form C, together with financial statements, tax computations and supporting schedules to IRAS.
All companies must also declare its actual income or losses in the corporate income tax form annually.
Please note that IRAS takes a serious on late filing or non-filing of income tax form.
For the first three consecutive Year of Assessments, qualifying companies can enjoy tax exemption on the first SGD 100,000 of the chargeable income and a further 50% tax exemption on the next SGD 200,000 of chargeable income.
Partial Tax Exemption
All Singapore companies can enjoy partial tax exemption unless the companies have already claimed the Tax Exemptions for New Start-Up Companies.
Expenses Incurred Before the Commencement of Business
The company can claim a tax deduction for operating expenses incurred one year before the first day of the financial year against its operating revenue.
In general, all business related expenses incurred after commencement of the company's business are tax deductible.
The company can claim capital allowances deduction on fixed assets – purchased and used in the business.
The company is required to issue a statement of remuneration to every employee before 1 March of every year.
The employee will then file his personal tax return before 15 April of every year.
To read more about Managing taxes for dormant companies.
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