Singapore tax filing – Basic guide for new business owners who register Pte Ltd
All companies are required to pay corporate tax under the Income Tax Act, regardless of tax-residency status, on any chargeable income derived from Singapore or foreign income remitted into Singapore. However, there is neither any capital gains tax in Singapore or any withholding tax on dividends for business owners who register Pte Ltd. There are also no significant restrictions on foreign exchange transactions and capital movements, meaning funds may flow freely into and from Singapore.
Singapore Tax Filing
Singapore Tax Filing Obligations that are Applicable to Newly Incorporated Companies
All companies are required to submit two Corporate Income Tax Returns to IRAS every year:
Estimated Chargeable Income (ECI)
Within 3 months from the end of the financial year, if required to submit ECI
Form C-S/ C
15 Dec for YA 2020, 30 Nov from YA 2021 onwards
ECI, also known as Estimated Chargeable Income, is an estimate of a company’s chargeable income for a Year of Assessment (YA).
Filing of Estimated Chargeable Income (ECI) has to be done within 3 months after the end of the financial year unless the company does not need to submit ECI.
For filing of Form C / C-S it has to be done annually on 30 Nov; or 15 Dec.
Estimated Due Date: Within 3 months after FYE.
Filing of Corporate Tax
There are two types of Income Tax Return, Form C-S and Form C.
The Form C-S/ C is a declaration form for companies to declare their actual income.
Companies must ensure that the form is correctly completed and gives a full and true account of the company’s income.
For filing of Form C / C-S it has to be done annually on 30 Nov (paper); or 15 Dec (electronic) of the subsequent year following FYE.
First year filing should be done 1 year after the first FYE.
Estimated Due Date: By 30 Nov (paper); or 15 Dec (electronic) of the subsequent year after FYE.
Latest Update from IRAS: Filing of corporate taxes for YA2020 will become easier via a new simplified Form C-s Lite. IRAS will launch the Form C-s lite in July 2020 and it’s possible for companies with simple structure (minimal transaction or simple MA) to file taxes by filing out 6 essential fields. Companies filing Form C-s lite are not required to submit their financial statements and tax computations. However these companies will still need to prepare these documents and are ready to submit in the event that IRAS requested for them.The requirements for the simplified filing are:
Company has an annual revenue of $200,000 or below
Excluding separate source income like interest
Company only derives income taxable at prevailing corporate tax rate ot 17% and
Company not claiming the following in the YA:
Carry-back of current year capital allowances or losses
Foreign tax credit and tax deducted at source
Also from this year there will be no more physical filing and e-filing is compulsory. The extended tax filing due date of 15 Dec will not be available from YA 2021 and companies will require to e-file their YA2021 by 30 November 2021. More information on Form C-S (Lite) can be found on IRAS.
Penalties for Inaccurate Tax Filings
Income Tax Returns inaccurately filed without any intention to evade taxes could lead to:
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
Penalties for Late or Non-Payment of Corporate Tax
Failure to pay the assessed corporate tax on time may result in a 5% penalty, with subsequent penalties of 1% imposed for each month the tax remains unpaid (up to a total of 12% penalty).
IRAS may also take further enforcement or legal actions to recover the unpaid tax.