When you incorporate a business in Singapore, you are obliged to comply with the statutory requirements stipulated in the Singapore Companies Act, and to submit annual filing requirements to Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS). It is imperative for all companies to stay in compliance with the statutory regulations to avoid penalties and quite possibly, legal repercussions.
- 1Filing Dates
Corporate Tax Filing Deadline
Year of Assessment: 20XX Statutory filing deadline: 30 Nov of each year
Corporate Tax Return Filing
The filing deadline for corporate income tax return is 30 November. Documents to be submitted are
- Tax computation
- Director’s Report
- Form C
Audited or Unaudited Accounts
Singapore companies are required to file audited or unaudited accounts. If you are an exempt private company with less than S$5 million of turnover, you may file an unaudited account.
The Form C has to be submitted by July every year for the preceding FYE unless an ECI had been submitted within three months after the end of its accounting period which will then give the company an extension until December.
Per Singapore Companies Act, all companies are required to submit a Directors’ Report. The report consists of unaudited financial statements such as balance sheet and income statements; supporting notes and disclosure of significant accounting policies applied by the company; disclosure of company’s operations; and shareholders and directors’ interests. At Alpha, our accounts experts can help you draft a Directors’ Report that is concise yet comprehensive in addressing the key elements.
Individual Tax Filing Deadline
Year of Assessment: 20XX Statutory filing deadline: 15 April 20XX
Estimated Chargeable Income
What is Estimated Chargeable Income?
Estimated Chargeable Income or ECI is an estimate of a company’s chargeable income for a Year of Assessment (YA). All companies in Singapore are required to submit an ECI within three months from the end of its financial year. It is mandatory to file an ECI regardless of the amount of income. A company with a zero income will file a ‘NIL’ ECI.
Financial Year-end Due Date Accounts Period Year of Assessment (YA) Due date for filing ECI for that (YA) 31 Dec 31 Mar of the following year 1 Jan 20xx to 31 Dec 20xx 2010 31 Mar 2010 31 Mar 30 Jun 1 Apr 20xx to 31 Mar 20xx 20xx 30 Jun 20xx
What documents are required for filing ECI?
To file an ECI, you will need submit the following:
- Financial Year End or FYE
- Estimated Revenue
- Estimated Profits or Chargeable Income after deductible expenses
What are the benefits of early submission of an ECI?
IRAS provides the benefit of paying your taxes in installments. To take advantage of this benefit, you need to file your taxes by the stipulated deadlines:
e-File by the 26th of the month immediately after your accounting year-end 10 installments e-File by the 26th of the second month after your accounting year-end 8 installments e-File by the 26th of the third month after your accounting year-end 6 installments
What if I don’t file?
If your company does not submit an ECI within three months from the end of its financial year, IRAS may issue a Notice of Assessment (NOA) based on an estimation of your company’s income. If you do not agree with our estimated assessment, you must object in writing within 30 days from the date of the NOA. Otherwise, the estimated assessment will be treated as final, even if the actual income based on your Form C and accounts submitted subsequently is lower than the estimates. You will be responsible for the payment of the estimated assessment or risk further penalties or legal consequences.
- 2Ongoing Compliance
Financial Year End
Each company in Singapore has to determine its Financial Year End (FYE). The FYE is the completion of an accounting period. A company’s financial year-end does not necessarily need to fall on December 31, and can actually fall on any day throughout the year.
A company’s fiscal year is the same as its financial year. The date for the company’s FYE is left for the company to decide. Most companies use either the end of the calendar year (December 31) or the end of any of the quarter (March 31, June 30, or September 30) as their fiscal year end date.
Did You Know? It is best to keep the company’s FYE within 365 days in order to enjoy the Zero Tax Exemption for new start-up companies (full tax exemption on the first $100,000 of normal chargeable income for its first three consecutive YA).
Appointment of Auditors
All Singapore incorporated companies must appoint an auditor within 3 months from the date of incorporation, unless it is exempted from audit requirements. To be exempted from audit requirements, a company must satisfy all of the following:
- The Company does not have any corporate shareholder;
- Total number of individual shareholders must be less than 20;
- Annual turnover of the company must be less than S$5 million.
Company Registration Number Disclosure
Singapore Companies Act requires every company to have the Company registration number, known as Unique Entity Number (UEN) on all business letters, statements of account, invoices, official notices, publications, etc.
Notification of Changes
It is the company’s responsibility to update the Registrar (ACRA) of any changes in the company pertaining to the company, shareholders, share capital and officers within the stipulated time. Failure to do so will incur penalties.
Business Licenses and Permits
Some business activities in Singapore are subject to regulation by government authorities. Even if your business firm has been registered you cannot begin operation unless you have the necessary approval or license from the relevant government authorities.
Registered Office Hours
All Singapore Company must have a registered office address in Singapore and the office must be opened to public for minimum of three hours per day during normal business hours on weekdays.
Central Registration (CR) Number
If your business activities involve import and export or Tran-shipment in and out of Singapore, your company will need to register with the Singapore Customs and obtain a CR Number.
Singapore Goods and Services Tax Registration
Goods and Services Tax (GST) is a tax on the supply of goods and services in Singapore and on the import of goods into Singapore. Goods exported from Singapore and international services provided from Singapore are exempt from GST. The current GST rate is 7%.
All Singapore companies must register for GST if their annual taxable revenue is more than S$1 million, or currently making taxable supplies and the annual taxable revenue is expected to be more than S$1 million. The business is expected to register for GST within thirty days from the time it is deemed liable.
You may also choose to register for GST voluntarily. Approval for voluntary registration is at the discretion of the Comptroller in IRAS. Once approval is given, you must remain registered for at least two years.
Registration of Singapore Central Provident (CPF) & SDF
The Central Provident Fund or CPF is a compulsory pension fund scheme in which the employer and employee contribute a percentage of the monthly salary to the fund. CPF contribution by the employer is mandatory for all local employees who are Singapore citizens or permanent residents earning more than S$50 a month. The maximum CPF contribution rate for employer and employee is 14.5% and 20% respectively and can be lower depending on certain factors such as employee age, permanent resident status, etc.Employment pass holders do not have to contribute to CPF.
However, the employer (company) is required to contribute a fee to the skill development fund. SDL contribution is payable by employers for all employees up to the first $4,500 of gross monthly remuneration** at the rate of 0.25% or $2, whichever is higher.
- 3IRAS Compliance
Annual Filing requirements with Inland Revenue Authority of Singapore (IRAS)
ECI is an estimate of a company’s chargeable income for a Year of Assessment (YA). IRAS requires each company to submit an ECI for the Year of Assessment within three months after the financial year ends. It is mandatory to file an ECI regardless of the amount of income. A company with a zero income will file a ‘NIL’ ECI.
All Singapore Company must prepare the accounts which must consist of Profit and Loss Account, Balance Sheet, Cash Flow Statement, and Equity Statement in accordance with the Singapore Financial reporting standard (SFRS). The accounting records must be kept for 5 years.
Tax Return Filing
The filing deadline for corporate income tax return is 31 November. Documents to be submitted are audited or unaudited Report and tax computation (Form C).
Submission of Financial Report – audited and unaudited
Every company is required to submit a Financial Report. The report consists of financial statements such as balance sheet and income statements; supporting notes and disclosure of significant accounting policies applied by the company; disclosure of company’s operations; and shareholders and directors’ interests
A company is not required to prepare an audited report if the sales turnover for the financial year does not exceed the $5 million; it has not more than 20 shareholders and does not have a corporate shareholder.
A Company must audit its accounts, if the Company has a corporate shareholder and or the, sales turnover exceed S$5 million and has more than 20 shareholders
Failure for non compliance
Failure for non compliance with the above requirements will incur penalty and/or court prosecution.
- 4ARCA Compliance
Annual General Meeting (AGM) and Filing of Annual Returns (AR) in Singapore
Every Singapore Company needs to hold its Annual General Meeting (AGM) every calendar year and its financial statements are to be tabled at the AGM for the shareholders’ approval.
The Singapore Companies Act (Cap.50) states that every company is required to hold the Annual General Meeting (“AGM”)
- once in every calendar year
- 15 months from the date of the last AGM, whichever is the earliest
Newly incorporated companies are allowed to hold the first AGM within 18 months from the date of incorporation.
An AGM can be:
- physically held anywhere in the world, whereby the shareholders meet, or
- by way of written resolutions, whereby a meeting is not required.
The following matters are discussed in an AGM:
- To approve the Director’s Report/ Audit Report
- To approve Directors’ fees, remuneration and emolument;
- To re-elect the Director(s) (if applicable)
- To reappoint auditors
- To declare dividends, if any
- To transact any other business
Requirement for Accounts
Where an AGM is held, directors of the company are required to lay before the shareholders, the relevant documents such as the company’s annual financial statements compiled in accordance with the Financial Reporting Standards of Singapore which must consists of:
- Report of Directors & Statement by Directors
- Independent Auditors’ Report (if required)
- Balance Sheet
- Profit and Loss Statement
- Statement of Changes in Equity
- Cash flow Statement
- Corresponding Notes to Financial Statements
Note: Section 201 of the Companies Act states that the financial statement must not be more than 6 months old from the date of the AGM.
Requirements of Directors Reports/Audited Accounts:
A company is not required to prepare an audited report if
- The sales turnover does not exceed the $5 million
- It has not more than 20 shareholders
- It does not have a corporate shareholder at any point in time for the particular financial year
The company which meets with the above requirements can prepare an unaudited report which is commonly known as directors’ report.
Audited reports must be prepared if the Company has
- a corporate shareholder
- Sales turnover exceed S$5 million
- has more than 20 shareholders
Note: A company is considered dormant during a period in which no accounting transaction occurs. Dormant companies can be exempted from preparing audit reports, but will still be required to prepare unaudited report.
Requirement for Annual Return
All locally incorporated companies are required file their annual returns under the Companies Act, within one month of holding the AGM or the passing of written resolutions in place of the AGM.
The following information of the Company is required for filing of annual returns:
- Name & Registration Number
- Registered address
- Principle activities
- Company type during financial year
- Summary of Share Capital and shares
- Registered Charges
- Information of Officers of the Company
- Information of Shareholders
- Dates of Annual Returns, Annual General Meeting and Accounts
- Financial statements (XBRL), if necessary
Filing Financial Statements in XBRL
The company would be required to file their financial statements in XBRL format during the filing of Annual return, if your company is:
- insolvent (Total Assets – Total Liabilities = Negative Value)
- has a corporate shareholder for the financial year
Extension of Time
If your company requires more time to comply with the requirements for preparation of the financial statements for the holding of AGM and the filing of AR, a one time extension of time of either one or two months before the deadline to hold the AGM can be applied.
Failure for non compliance
Failure for non compliance with the requirements for holding of AGM and filing of AR will incur penalty and/or court prosecution. The penalties imposed are dependant on the length of default and the number of sections (175, 197 and 201) of the Companies Act you have breached.
Note: Obligations of a Director under S175, S197 and S201 Singapore Companies Act
Local companies to prepare accounts for Annual General Meeting (AGM) and file their Annual Returns under S175, S197 and S201 of the Companies Act
- Section 175 -to hold its AGM within 18 months of its incorporation. Thereafter, once every calendar year but not later than 15 months from the date of the last meeting.
- Section 201 -the accounts must not be made up to a date more than 6 months from the date of the AGM.
- Section 197 -to file the Annual Return within 1 month after holding the AGM.
Failure to comply – Late filing penalties and/or composition fines
- Fine of $5,000 & default penalty-s 175 & 197
- Fine of $10,000 or up to 2 years imprisonment for s 201
Disqualification for persistent default: 3 convictions within 5 years
Certificate of Compliance
Effective April 2010, companies that comply with all the 3 requirements under sections 175, 197 and 201 of the Act will have a green tick ( ) reflected in ACRA’s online Directory and will be eligible for a Certificate of Compliance whilst those not in compliance with any or all the requirements will receive a red cross ( ) and will not eligible for the certificate.
Disclaimer: The information contained in this website is for general reference only. While all reasonable care has been taken in the preparation of this information, Alpha cannot accept any liability for any action taken as a result of reading its contents without further consulting us with regard to all relevant factors.