Compared to other countries in the world, the Singapore government always supports foreign businesses to invest and start up companies in Singapore. Therefore, the procedures for submitting the annual report to the Singapore government are very simple. However, there are still many foreign enterprises that do not understand and forget the payment deadline, leading to unnecessary fines.
So what do accountants in Singapore need to do after a financial year end?
Firstly, you need to submit an Estimated Chargeable Income report (ECI for short) within 3 months from the end of the fiscal year.
The statement is an estimate of the company’s total taxable income for any given Assessment Year (YA). It is calculated based on gross income, minus all taxable expenses and other deductions.
Your company is not required to file an ECI in a Year of Assessment (YA) if both of the following criteria are met: Annual Revenue is SGD $5 million or less and ECI is nil.
There are many benefits if your company files an ECI early. The biggest reason is the Corporate Income Tax (CIT) discount on your ECI. For the Year of Assessment (YA) 2019, companies are entitled to a 20% CIT refund, based on the amount of corporate tax payable. Plus, if you file early, you’ll have more installments that you can pay your company’s estimated taxes, as follows:
- ECI filed 1 month from financial year end – 10 instalments for e-file, 5 for paper filers
- ECI filed 2 months from financial year end – 8 instalments for e-file, 4 for paper filers
- ECI filed 3 months from financial year end – 6 instalments for e-file, 3 for paper files
- ECI filed 3+ months from financial year end – NO INSTALMENTS ALLOWED
Secondly, you need to hold an AGM every year.
- If you are not a listed company, you must hold an AGM within six months after your company’s financial year end and file the annual return within seven months after your company’s financial year end.
- If you are a listed company, you must hold an AGM within four months after your company’s financial year end and file the annual return within five months after your company’s financial year end.
Thirdly, all companies that conduct trade or run business in Singapore must report their income to IRAS annually by filing a Corporate Income Tax Return (Form C-S / Form C-S (Lite) / Form C) ) before 30 November of the year of assessment (YA)
In Singapore, the government introduced Form C-S to simplify the filing of tax forms. The C-S Form is a shortened version of Form C which is only three pages long and is intended exclusively for small companies. To be eligible to file a C-S form, a company needs to meet the following 3 conditions: Be incorporated in Singapore, have an annual revenue of $5 million or less, and generate only 17% taxable income.
Form C-S (Lite) was introduced in 2020 and is for companies that can meet the criteria for Form C-S and have less than $200,000 in revenue.
Companies that do not meet all of the above conditions must file Form C instead. This form is long and for larger companies, requires more attachments, and has more fields to enter.
If not filed by the due date, IRAS will issue a Notice of Assessment (NOA) based on your company’s earnings estimates. If your company wishes to file a dispute against the NOA, you can file a Notice of Objection (NOO) within two months. And even if you’ve filed a NOO, you are still required to pay the tax on the said assessment within one month from the issuance of NOA.
If the company still fails to settle the estimated tax, IRAS will offer to compound the offence with a composition fee from $200 to $1,000. And if the company still fails to pay the component amount and file the tax return, the company director could face a maximum fine of $10,000, up to 12 months in prison, or both.