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Key Things To Note About Corporate Tax Filing

Key Things to Note About Corporate Tax Filing

Every company is required to comply with the tax filing in Singapore. Under the scrutiny of IRAS, the corporate tax compliance has become more complex.Therefore, it is critical that companies stay abreast to the fast-changing and dynamic regulatory requirements.

There are 2 requirements to be filed each year, the estimated chargeable income (ECI) and the Corporate Income Tax Return.

 

Estimated Chargeable Income (ECI)

The ECI is an estimate of the company’s taxable income after deducting tax deductible expenses for a year of assessment (YA). It is to be filed electronically via myTax Portal within 3 months from the companies’ financial year end.Singapore-registered companies that submit their ECI within the qualifying period may opt to pay corporate taxes by instalments if they are on GIRO. The earlier a company files, the greater the number of instalments they will be given.

Companies that meet the following 2 criteria need not file an ECI:

  1. The company’s annual revenue is not more than $5 million for the financial year; and
  2. The ECI is NIL.

 

Corporate Income Tax Return

The infographic below tells you which corporate income tax return you should file, Form C-S, Form C-S Lite or Form C.
Which Corporate Income Tax Return Do I File?

Form C-S
Form C-S is for companies which fulfil all of the following conditions:

  • Incorporated in Singapore
  • Have an annual revenue of less than $5 million
  • Derives income taxable at the standard corporate tax rate of 17%
  • Does not claim the following:
    • Carry-back of Current Year Capital Allowances/Losses
    • Group Relief
    • Investment Allowance
    • Foreign Tax Credit and Tax Deducted Scheme

 
Form C-S Lite
Form C-S Lite is for companies which fulfil all of the following conditions:

  • Qualifies to file Form C-S
  • Has an annual revenue of less than $200,000

 
Form C
Form C is for companies who do not qualify to file Form C-S. Financial statements, tax computations and supporting schedules must be filed together.

The Corporate Income Tax Return must be filed by all companies via myTax Portal before 30th November annually. This applies even to companies that are making losses, applying to be struck off or under liquidation.

 

Notice of Assessment (NOA)

After filing the necessary forms, IRAS will review the forms and then issue a Notice of Assessment (NOA) to the company by 31st May of the following year, indicating the amount of tax payable. Companies that do not agree with the tax assessment raised may file an objection to have the tax assessment revised within 2 months from the date of the NOA.The full tax amountwill have to be paid within 30 days of receiving the NOA regardless of whether you have filed an objection.

 

Consequences of Late/Non-Filing of Tax Returns

Tax filing is an important obligation for all companies and failing to do so could have serious consequences. IRAS may estimate a company’s income and issue an estimated NOA. The estimated tax must be paid within 1 month from the date of the NOA. A company failing to file a tax return can be fined for up to $1000 and or summoned to court. If the company fails to file for more than 2 years, an additional penalty of twice the amount of tax assessed may be imposed.

 

Penalties for Errors in Tax Returns

When the Corporate Income Tax Returns have been inaccurately filed without any intention to evade taxes IRAS could impose:
Financial penalties of up to 200% of the tax undercharged;

  • Fines of up to S$5,000; and/or
  • Imprisonment of up to 3 years.

 

When the tax returns have been filed inaccurately with the intention to evade taxes however, IRAS could impose:

  • Financial penalties of up to 400% of the tax undercharged;
  • Fines of up to S$50,000; and/or
  • Imprisonment of up to 5 years.

 

Consequences of Late or Non-Payment of Corporate Tax

If your tax is not paid within 1 month of receiving the NOA, a 5% penalty will be imposed, with subsequent penalties of 1% imposed for each month the tax remains unpaid, up to a maximum of 12% penalty.

IRAS may also take further enforcement or legal actions to recover the unpaid tax.

 

References

We provide:
– Strategic advice to the company’s board of directors
– Virtual Receptionist
– Registered Address
– Leads Qualifications
– Expense Management

Speak with us for a customised solution for your business needs.

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We provide:
Go to market strategy in multiple Asia Markets
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Corporate Tax & Goods & Services Tax (GST Singapore) / VAT
Verti provides advice, tax computation and tax filing on your Corporate (ECI, Form C/CS Form) issues, to ensure adherence to regulations.

Personal Tax
If you are a Singaporean, Singapore Permanent Resident or a foreigner who has lived and worked in Singapore for at least 183 days in the tax year, you are required to pay personal taxes on your chargeable income as a tax resident. Non-residents who have lived and worked in Singapore for less than 183 days in the tax year may also be required to pay taxes. The corresponding forms you will have to fill out include:

• Form B1 (individual tax residents)
• Form B (self-employed)
• Form M (non-residents)

Other taxes, that individuals may have to pay, include those imposed on property, rental income, stamp duty, motor vehicles and Central Provident Fund (CPF) contributions.

A corporate secretary needs to be familiar with the Singapore Companies Act and the various
requirements stipulated by the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS).

“Great incorporation gives you a great head start for your business!”
As a gateway to Southeast Asia, Singapore continues to be the leading hub for businesses to gain their presence, be it world’s largest multinational corporations or fast-growing start-ups.

Having us to steer you around with Singapore’s rules & regulations would accelerate your success route in this business-friendly city.

a) For Singapore or Permanent Resident
b) For Foreigner Individual (+ VISA/Work permit related matters for key personnel of the Business)
c) For Foreigner Companies

Subsidiary Company:
Subsidiary Company + Employment Pass
Subsidiary Company + Nominee Director

Branch Office
Branch Office + Employment Pass
Branch Office + Nominee Agents

Representative Office
Singapore Representative Office Setup

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