In Singapore, there are various types of tax filings that a company may have to do. In this article, we discuss three types of filings that most companies would have to perform, namely:
- Estimated Chargeable Income (ECI)
- Corporate Income Tax (CIT), including Form C, C-S, or C-S (Lite)
- Goods and Services Tax (GST)
1. Estimated Chargeable Income (ECI)
You have to file the ECI within three months of the end of your company’s financial year-end. However, your company does not need to perform the ECI filing if the following conditions are met:
- Annual revenue is not more than $5 million for the financial year; and
- ECI* is NIL for the YA.
The process of filing corporate income tax usually begins with the filing of ECI, which has to be filed within three months of the company’s FYE. From YA 2020, companies are required to file their ECI through an online filing system on the Inland Revenue Authority of Singapore’s (IRAS) MyTax Portal.
2. Goods and Services Tax (GST)
Companies that provide products and services in Singapore with annual revenue estimated to exceed $S1 million have to register as a GST-registered company. For these businesses, GST returns must be filed every quarter. Companies can also choose to make GST payments through a GIRO plan to ensure that they do not miss the deadlines. With or without a GIRO plan, companies still have to abide by the same quarterly deadlines for filing: 30 April, 31 July, 31 October, and 31 January. Payments through GIRO will be deducted on the 15th day of the following month after the due date of the GST return. Should the 15th day falls on a weekend, the deduction will be made on the next working day, while payments without GIRO must be paid by the same filing deadline.
| Without GIRO Plan | With GIRO Plan | ||
|---|---|---|---|
| Quarter | File and Pay By | File By | Payment deducted on |
| Jan – Mar | 30 Apr | 30 Apr | 15 May |
| Apr – Jun | 31 Jul | 31 Jul | 15 Aug |
| Jul – Sept | 31 Oct | 31 Oct | 15 Nov |
| Oct – Dec | 31 Jan | 31 Jan | 15 Feb |
3. Corporate Income Tax (CIT)
Your company’s chargeable income has to be filed by a fixed annual deadline through the same online IRAS MyTax Portal that is used for ECI filing. Unlike ECI which must be filed within three months of the company’s financial year-end, the CIT has to be filed by a fixed date that applies to all companies in Singapore, which is 30 November from YA 2021 onwards. Companies need to file their CIT using Form C, C-S, or C-S (Lite).
Generally, all companies should use Form C to file their income tax. However, if yours is a qualifying small company with (i) an annual revenue of S$ 5 million and below, (ii) incorporated in Singapore, (iii) derives only income taxable at 17%, and (iv) does not claim tax relief like Group Relief, Investment Allowance, Carry-back of Current Year Capital Allowances/ Losses, or Foreign Tax Credit and Tax Deducted at Source, you should use Form C-S to file your company’s CIT instead.
The newest introduction in YA2020 is Form C-S (Lite) which is a simplified version of Form C-S to allow for easier filing for companies that earn annual revenue of S$200, 000 or below. For these companies, tax computations and financial statements do not have to be filed but should be prepared in case IRAS requests for them.
What happens next?
After you file your ECI and CIT, IRAS will evaluate your forms and send a Notice of Assessment (NOA) to your company detailing your business’ tax liabilities. Objections to IRAS’ assessment may be made within the 2-months window period, but you will still have to make the payment of your assessed corporate tax within 30 days from the date of the NOA.
What are the penalties for failing to comply?
There are three ways you may fail to comply with IRAS’ tax filing and payment requirement: late filing or payment, inaccurate tax filing, and tax evasion.
If taxes are filed late, the company may be imposed with a 5% tax penalty, with an additional penalty of 1% for each month that the tax is not paid, up to a total 12% penalty. For inaccurate tax filings, your company will have to pay up to 200% of the tax that was undercharged, be fined up to S$5,000, and/or be imprisoned up to 3 years (for the person responsible).
Tax evasion is when the company or person intentionally gives false information to IRAS so as to evade or reduce tax liabilities. This is viewed as a serious criminal offence in Singapore and your company will suffer heavy consequences including having to pay up to 400% of the tax that was underpaid, be fined up to S$50,000, and/or be imprisoned up to 7 years (for the person involved).
Corporate Tax Services
Filing for corporate tax is a tedious, detailed, but necessary task. To ensure that taxes are filed accurately and paid on time, many companies choose to use tax agents to manage deadlines, do up financial statements, tax computations and other needed documents, and file taxes on their behalf. Tax agents also assist with withholding tax compliance matters, attend to queries raised by IRAS, handle tax audits and investigations initiated by IRAS, and make objections and requests for advance rulings if necessary.
In addition to tax compliance services, tax advisors/agents also provide professional advice for identifying and pursuing opportunities in Singapore tax incentives, reliefs or grants to minimise costs and maximise tax savings. You can read more about tax exemptions and incentives available to your company in this article, ‘How is my company taxed in Singapore?’, and how such services can help you with these too.
About CLA Global TS (formerly Nexia TS)
Founded in 1993, CLA Global TS (formerly known as Nexia T.S.), is an award-winning Asia-Centred Business Advisor. An independent member firm of CLA Global Network, CLA Global TS provides a full spectrum of professional services including, but not limited to Assurance & IPO Reporting, Tax, Risk Advisory, Valuation, Insolvency & Restructuring, Sustainability & Climate Change Advisory and more.
For more information, visit CLA-TS.com.
