Striking off a Singapore company

Because of some reasons, your Singapore company is no longer needed to do business. Hence, you need to close down the company, which is called striking off. To strike the Singapore company’s name off the Company Register is not difficulty, you is only required to submit a form to ACRA (Accounting and Corporate Regulation Authority) in pursuant to section 344 of the Singapore Companies Act.

What are differences between striking off and winding up?

You may be confused between striking off and winding up, because they are all considered as ways of closing down the Singapore company. However, winding up is a more formal process that involves the appointment of liquidator to manage the company’s closure, while striking off is suitable for companies which is not in active business or does not have any assets or liabilities.

It means that if the company is insolvent, it is required to wind up instead of strike off. In fact, a process of striking off the company is much faster than winding up.

Requirements for striking off companies

Companies will be able to strike off when:

  • Do not commerce any business activities from the date of incorporation, or implement to cease all of business activities
  • Do not have any outstanding/ pending tax liabilities with the Inland Revenue Authorities (IRAS)
  • Do not have any current or contingent assets or liabilities
  • Submit completely all of annual reports to IRAS and ACRA
  • Do not be involved in any court proceedings both inside and outside Singapore
  • Cancelling GST registration if the company registered GST, and there are no outstanding GST matters
  • Close of Singapore corporate bank account
  • The company director(s) must obtain the written consent of the majority of the shareholders regarding the strike off

The process of striking off with ACRA

  1. Submit an application form for striking off the Singapore company to ACRA
  2. The application is approved
  3. ACRA will send a striking off letter to the registered address of the company in Singapore
  4. The company’s name will be published in the Government Gazette which is the First Gazette Notification if there is no objection
  5. If there is no objection within the next 2 months from the First Gazette Notification, ACRA will publish the name of the company in the Government Gazette again and the name of the company will be struck off the register. This is considered as the Final Gazette Notification.

Note:

  • The striking off process will last approximately from 3 to 4 months.
  • If ACRA receives any objection against a striking off application, ACRA will give the company 2 months to resolve the matter. In cases, the company cannot resolve this matter, the striking off application will lapse.

The striking off process can only implement smoothly when you are in compliance with all the legal and statutory regulations of ACRA. Hence, to save your time for the striking off process and to give you the best advice, ACE Global Accountant is be willing to assist you in this matter.

Types of business entities in Singapore

Before making decisions in Singapore company incorporation, all of entrepreneurs do not skip this step of choosing type of business entities. In fact, there are many business entities in Singapore which have some effects on the image, perception and the tax that you can pay.  Hence, you should read to the article of ACE Global Accountant below to gain an overview of the various types of business entities in Singapore and the differences between them to make right decision in choosing business entities for your new incorporated Singapore company.

TYPES OF BUSINESS ENTITIES IN SINGAPORE

DESCRIPTIONS

SOLE PROPRIETORSHIP

– Key factors: it suits for small businesses. It is owned and run by an individual who must be a resident in Singapore and at least 18 years old. The sole proprietorship is not considered as a separated legal entity. The fact is foreign individual and company CANNOT register this type of business entities in Singapore.

– Taxation: the profits of a sole proprietorship is taxed based on the personal income tax rate.

PARTNERSHIP

-Key factors: it is formed by a minimum of 2 persons and maximum of 20 persons. Foreign individuals or companies are allowed to be partners. Besides, it is not considered as a separate legal entity and all partners are personally liable for the partnership’s debts and losses, even if the debts and losses are incurred by other partners.

-Taxation: Similar to a sole proprietorship, the tax rate imposed will be that of the partner. If the partner is an individual, the personal income tax rates will apply; If the partner is a company, corporate tax rates will apply.

LIMITED PARTNERSHIP (LP)

-Key factors: it is required at least two partners but no maximum number of partners. There is one partner who will be the general partner. The general partner has unlimited liability and personally liable for all debts and losses. Hence, a limited partner will not be liable for the debts and other liabilities of the partnership beyond the amount of his/her agreed contribution.

-Taxation: the tax rate imposed will be that of the general partner. If the general partner is an individual, the personal income tax rates will apply; If the general partner is a company, corporate tax rates will apply.

LOCAL PRIVATE COMPANIES

Main points: this type of business entities is treated as an separate entity from the members, it means the company is considered  as a “person” in law. It is required one or more individuals who must be a Singaporean or foreigner owning Employment Pass/ Permanent Resident in Singapore registers as a director of the company. This business entities includes three main types:

  1. Private Limited Companies:

-Key factors: it is required at least one director and one shareholder, and the maximum of shareholder is fifty. It’s name will end with Private Limited or Pte. Ltd. Moreover, the shareholders of a private limited company can either be individuals or corporate entities or both.

-Taxation: a private limited company can qualify for tax exemption schemes and is taxed at the effective corporate tax rate of 17%.

2. Exempt Private Limited Companies

-Key factors: A subtype of a private company, an exempt Private Limited Company has less than 20 members, none of them being corporate entities. Should the companies turnover exceed S$5million it will no longer be deemed exempt. The status is not specially conferred, it is simply a status by operation of law

3. Gazetted Exempt Private Companies

-Key factors: Government-owned companies which have been declared Exempt Private Company by the Minister Gazette.

LOCAL PUBLIC COMPANIES

Here are two main types:

  1. Company Limited by Share

-Key factors: The number of shareholders can be more than fifty members and the company may raise capital by offering shares and debentures to the public. A public company must register a prospectus with ACRA before making any public offer of shares and debentures

2. Company Limited by Guarantee

-Key factors: Companies limited by guarantee are usually formed for non-profit making purpose. This type of company is more commonly used for trade associations, charitable bodies, clubs, proffesional and learned societies, some religious bodies and the like, rather than commercial undertakings.

Foreign Company Registration Options

The options for foreign companies

  • Branch Office: A branch office is registered in Singapore as an extension of its parent company and not as a separately incorporated entity. The liabilities of a branch office extend to its parent company.
  • Representative Office: A representative office is registered in Singapore as a temporary arrangement for conducting marketing research activities. A representative office does not have any legal status and cannot be engaged in any profit yielding activities.
  • Subsidiary Company: A subsidiary company is a private limited company incorporated in Singapore with the parent company as its shareholder. For small to medium-sized foreign businesses, a subsidiary company is the most preferred choice of registration in Singapore.

Which types of business entities in Singapore a foreign company or individual should choose?

A private limited company will be the most popular for a foreign company or individual to set up in Singapore because it is advanced and flexible type of business form in Singapore.

  • Separate legal entity
  • Limited liability
  • Ease of incorporation
  • Ease of raising capital
  • Ease of transfer of ownership
  • Tax exemption schemes

For more questions related to Singapore company incorporation, contact us for a quote.

Penalties for Late or Non-Payment of Withholding Tax

The deadline to pay the withholding tax to IRAS will be the 15th of the second month from the date of payment to a non-resident or company in Singapore or on the 25th of the same month if you are on GIRO. In fact, it is essential to comply with the deadline of payment because late payment or non-payment of withholding tax results in penalties including pecuniary and recovery actions. Read information below to know the penalties for late or non-payment of withholding tax.

Confirmation of Payment (CP)

After IRAS has received the withholding tax payment of your business or when the GIRO deduction is successful, IRAS will send to you the Confirmation of Payment (CP) which is considered as a tax receipt. You may receive the CP from IRAS within 10 days after your payment is successful.

  • The CP will be sent to you at the Singapore address which is registered with IRAS.

Note that you will only receive a payment of withholding tax of $10 and above, and the amount stated in the CP does not include any late payment penalty paid although you paid for the penalty for late or non-payment.

Penalties for Late or Non-Payment

Late Payment Penalty

As mentioned, the withholding tax must be paid to IRAS by the 15th of the second month from the date of payment to the non-resident. Late or non-payment of withholding tax results in penalties. If the withholding tax payment is not received by the due date, a 5% penalty and subsequently, an additional 1% penalty (not exceeding 15% of the tax outstanding) can will be imposed for each completed month that the tax remains unpaid.

  • Late Payment Penalty Letter

IRAS will send you the letter which inform you the 5% of penalty and the due date for the late payment penalty. Hence, you must made payment by the stated due date to avoid additional penalty or further enforcement actions.

Imposition of Additional Penalty

Within 30 days from the due date, IRAS has not yet received the withholding tax payment from you, IRAS will impose an additional penalty of 1% for each completed month that the tax remain unpaid (maximum 15% equivalent to 15 months, amount to the highest percentage of penalty is 20%)

Note that IRAS may also take other recovery actions in particularly serious cases of late payment including directly instructing your bank to pay monies held in your bank account, as well as commencing legal action.

Therefore, it is important for making withholding tax payment timely. In case you need a professional corporate tax service to assist you in withholding tax, ACE Global Accountant has abilities to support you to determine and comply with the withholding tax requirements.

 

Basics of Record Keeping for Singapore Company

For small Singapore companies’ owners who have no experience on how to keep Singapore company record, this article will help you to gain a basic understanding of what are the starting steps to maintaining transactional records.

Ingredients of small business record keeping for Pte Ltd Company in Singapore

  1. Monthly Bank Statements
  2. Sales Invoices / Records
  3. Credit Note Records
  4. Purchase Receipts and Documentation
  5. Stock or Inventory Records
  6. Payroll Records
  7. CPF Records
  8. Fixed Assets Records
  9. Rental Agreement and Payment Records
  10. Bank Loan Agreement / Hire Purchase Agreement with their schedule of repayments and interest table
  11. Receipts and Documentation of Expenditure incurred by Directors or Business Owners on behalf of the Company (expenses out of your own pocket)
  12. A suitable accounting recording system (You may invest in an accounting software or simply use Excel if your business is small and simple enough)
  13. A set of Self Inking Stamps that include Paid, Received and Posted.

Tips on source records for a Singapore company

Under the Income Tax Act, it is required a company to keep proper business records for a minimum period of 5 years.

This is a fairly simple rule to follow if you are able to keep a good filing system for all your business records. For a start, be very generous with the number of files you create for your company records. From our experience, we noticed that businesses like to file everything in one or two files with no proper segregation of document types. We recommend that a separate file be created to keep track of specific transactions for ease of retrieval and tracking. Refer to our illustration for a sample category of files to create for your business.

ACCOUNTING FILE

DESCRIPTION

SALES FILE

Houses all your sales invoices with a section for Credit Note (if any)

SUPPLIER (COGS) FILE

Houses all supplier invoices. The difference between this file and the Expense file is that this file contains expenses incurred for goods, services or materials that you will use for your business sales whilst the expense file will contain all other administrative and operating expenses

PAYROLL + CPF FILE

Keeps all payroll records, CPF and Foreign Worker Levy transactions here

EXPENSE FILE

Contains all other administrative and operating expenses (example: Utilities, Telecommunication, Printing & Stationery etc. You may opt to categorize the expenses by Date (recommended) or by Type of Expenses.

If a certain type of expense is high in volume, example if a company has numerous transport claims, it is recommended that you maintain a separate expense file for that particular expense.

BANK STATEMENTS FILE

Contains all Monthly Bank Statements for your Company. This is one of the most important files in your record keeping

IRAS TAX FILE

Contains all IRAS letters, notice of assessments and correspondences

DIRECTOR ACCOUNTS FILE

Contains all transactions paid on behalf of the Company, by the Directors of the Company, and yet to be reimbursed by the Company. You may consider creating this file if there is a significant volume of transactions that are paid by the Directors initially. With this file, it will be more efficient for the person preparing the accounts to identify transactions not paid through the Company account, and also facilitates Reimbursement.

RENTAL FILE

You may create this file to keep track of rental expenses. If you only lease one office with no variable charges, you may keep rental invoices in the Expense file.

FIXED ASSETS FILE

Contains all invoices relating to acquisition of Fixed Assets like Computers and Softwares, Office Equipment, Furniture and Motor Vehicles.

This will allow you to account for taxes and make relevant claims and allowances for Fixed Assets when it’s time to file your company taxes.

LOANS FILE

Contains all Bank Loan agreements, Hire Purchase Lease agreements, Third Party Loan agreements with the corresponding payment schedule and interest amortization table.

Leave your accounting matters to ACE Global Accountants, we offer a full spectrum of accounting and bookkeeping services that are cost-effective to companies. Find out more information related to our bookkeeping services, click here.

When And How To File Withholding Tax

To know what is withholding tax in Singapore, please read an article “A Singapore company – An overview of Withholding Tax”. In this article will updated when and how to file withholding tax of your organization in Singapore.

When to file Withholding tax

The e-filing of withholding tax and payment are due on 15th of the second month from the date of payment to the non-resident.

If you are on GIRO for withholding tax payment, the deduction is on the 25th of the same month after the payment due date.

You may refer to your acknowledgement page for payment details after you have e-filed.

Late penalty fees will be imposed when payment is not received by the due date. Hence, to avoid late payment penalties, please e-file the withholding tax and ensure the payment is received by IRAS before the due date.

The date of payment

The date of payment is defined as the earliest of the following dates:

  1. When the payment is due and payable based on the agreement or contract, or the date of the invoice in the absence of any agreement or contract (credit terms should not be taken into consideration).
  2. When payment is credited to the account of the Non-Resident or any other account(s) designated by the Non-Resident
  3. The date of actual payment
  4. Director’s Fees: The date of payment for director’s fees is the earliest of the payment date or the date the payment was voted and approved (Example: at the Company’s Annual General Meeting).

How to e-file witholding tax

The due date of filling witholding tax to IRAS is on the 15th of the second month from the date of payment to the non-resident.

In fact, the form of withholding tax can only be filed electronically via myTax Portal for withholding tax payment to IRAS from 1 July 2016.

Here is a process of e-filling withholding tax

Step 1 : Authorise Users for Withholding Tax Filing

If this is the first time your organisation is e-filling withholding tax or you wish to authorise/ re-authorise a person for e-filling, this step will be required.

Kindly note that from 1 September 2018, CorpPass will replace EASY as the authorisation system to access IRAS’s e-Service.

Step 2: Log into myTax Portal

After being the authorised, you can log in to myTax Portal for “ Organisation/ Business Tax Matters or Client Tax Matters, whichever is applicable to file for the orgiansation.

Kindly note that form 1 September 2018, the only login method is CorpPass, and the SingPass/ IRAS PIN is no longer accepted. 

Step 3 : e-File Withholding Tax

Next, you log in to myTax Portal to complete and e-file the withholding tax. Here are two points that you need to take note before e-filling:

  • You can choose one of two motheds as follows – S45 Online e-filling (2.109MB) or S45 Offline Data-Entry (ODE) application (1.942MB) (a single file).
  • Singapore dollar is the only currency which is reported in the withholding tax form. However, if your payment to non-resident is in foreign currency, please use foreign currency selling rate based on the date of payment to the non-resident to convert into Singapore dollar.
  • Drop the cents when declaring the gross taxable income
  • If your organization if applying Double Tax Relief or Approved Royalty Incentive rate on the withholding tax records to be e-filed, please select the applicable relief/ incentive under the Relief/ Incentive (If applicable)
  • Only authorised users as Approver can submit the e-filling to IRAS
  • You should receive an acknowledgment page upon successful transmission of the e-filling.

Step 4: Save the Acknowledgement Page and Make Payment

Save and read the instructions in the acknowledgment page to make payment (if applicable) to IRAS by the due date.

For details on the modes and due dates for payment, please refer to the following :

Source: Inland Revenue Authority of Singapore

A Singapore Company – An Overview of Withholding Tax

If your Singapore company pays for services or products provided by a non-resident company or individual and performed in Singapore, the fee for these services or products may be charged a Singapore withholding tax. To find out more, read on an article below.

An overview of Singapore withholding tax

Singapore withholding tax is known as tax deduction at source in other countries refers to the tax withheld and paid to the Inland Revenue Authority of Singapore (IRAS). Under the law, it is required to withhold a percentage of a payment which is paid to a non-resident individual or company in Singapore.

In conclusion, withholding will be applied if:

  • Income derived from a Singaporean source
  • Services provided or work done in Singapore

Do note that under Singapore tax law, income includes wages or allowances as well as accommodation, airfare and other expenses which are incurred on top of actual service fees.

 For Singapore tax purposes, a non-resident company is:

  • Companies incorporated outside Singapore that have operations in Singapore
  • Incorporated Singapore companies that are managed and/or controlled outside Singapore
  • Singapore branches of foreign companies

 So, the place of incorporation of a company is not necessarily indicative of the tax residence of a company.

For Singapore tax purposes, a non-resident individual is:

  • Someone who has spent fewer than 183 days per year in Singapore during the course of providing services in the country.

Types of payments are subject to Singapore withholding tax

Types of payments

Tax rate 

Interests, commissions, and any other debt- or loan-related fees 15%
Royalty, rights of use, and intellectual property 10%
Management fees (prevailing corporate tax rate) prevailing corporate tax rate
Services rendered prevailing corporate tax rate
Rent 15%
Proceeds from sale of any real property by a non-resident property trader 15%
Distributions of taxable income made by a REIT (“Real Estate Investment Trust”) to a unit holder who is a qualifying non-resident non-individual 10%
Technical assistance and service fees prevailing corporate tax rate

Types of payments are NOT subject to Singapore withholding tax

The following types of payments do not attract withholding tax when paid to non-resident:

a. Dividend Payments

b. Payments to Singapore Branches of Non-resident Companies

c. Payments made by Banks, Finance Companies and certain Approved Entities

d. Payments for the Charter of Ships

e. Other Payments

Read on information updated by IRAS, click here

For more information related to withholding tax in Singapore, contact us for a quote.

Definition of Annual General Meeting (AGM) and Annual Return (AR)

It’s the Singapore company’s obligation to hold an AGM (Annual General Meeting) yearly and file Annual Return, as the regulations of the Company Act and the Accounting and Corporate Regulatory Authority (ACRA) that companies have to stay compliant.

In this article, we will find out what AGM & AR are, how do their processes are like and another couple of notice for companies to hold a successful AGM.

 Definition of AGM and AR

AGM is going for Annual General Meeting, it’s a yearly meeting of all the shareholders in the Singapore company. It’s an occasion for company to inform their financial statements, business health, etc. Shareholders are permitted to raise queries, vote and make important decisions for the company (such as appointment or removal of a director). According to the Companies Act, every company must have the first AGM held within 18 months from the date of incorporation, meeting can be held every year with the interval of not be more than 15 months between such AGMs.

AR is stand for Annual Return, one of the annual filing requirements almost all company in Singapore have to file with ACRA yearly, for updating company information. The AR must be signed by director of the company or a company secretary upon submission. These information containing:

  • Company Name and Registration Number
  • Principal activities
  • Registered Office Address
  • Details of company officers (directors, secretary)
  • Shareholder details, share capital, etc.
  • Dates of Annual Returns, Annual General Meeting and Accounts
  • Financial statements (XBRL format), if necessary. This financial statements need to be audited following the Reporting Standard mandates all companies to prepare year-end Financial Statements that summarize the financial activities during the accounting year in XBRL format.

The process of holding AGM & filling AR

There are 2 main tasks that an AGM has to be completed, which is giving shareholders information of the company’s situation (such as inform financial statements, and business health) and answering shareholders’ questions about the company. The meeting leader is very important, usually are the chairman of the company. If there is no appointment for the position, every members in the AGM can be appointed to direct the meeting. Secretary or appointed secretary need to prepare every necessary documents for AGM (such as Company Constitution)

Detail timeline for holding AGMs and filing of AR

***

  • On the other hand, there are some companies that are exempted from holding AGM or has dispensed with the holding of AGM, these companies have to submit the details when filing the company’s AR.
  • The penalty for failing to comply with the requirements for holding AGM & filing AR can be paying a fine or sometimes going to the court prosecution imposed by ACRA.

Contact Ace Global Accountants for get more details related to AGM and AR

 

Definition of Form C/C-S and When to file

As mentioned before in a Singapore company – Annual fillings, and as all business owners have already known how important annual filing requirements in Singapore might have to ensure a pro-business environment for its entrepreneurs and firms. Today we are going to share with you one of the mandatory annual filing requirements that is very much important as the ECI, filing form C-S or form C to IRAS. So what is a form C-S and why do we, business owners in Singapore, have to file it, let’s find out.

An overview of Form C/ C-S

A Form C-S, is usually known as a 3-page brief of your company’s Income Tax Returns report instead of 7 pages as Form C. Form C or Form C-S is simply an income declaration form for the year of assessment (YA), one of the annual filing requirements that must be submitted annually to the Inland Revenue Authority of Singapore (IRAS). Your company might have a profitable year or made a loss, however, there is still a requirement to complete Form C/C-S.

For more details, a form C/C-S includes some important information for IRAS which have an insight view of how all the companies are working, in order to offer supportive policies for companies. Such as:

  • A declaration statement of the company’s eligibility
  • Information on tax adjustments
  • Information from the financial accounts

Although there are a few similar point between Form C and Form C-S, here are some differences between those two forms:

The company must meet all the four criteria in order to file Form C-S:

  • The company is incorporated in Singapore
  • The company has an annual revenue of 5 million SGD or less (from YA 2017 onwards)
  • The company derives only income taxable at the prevailing corporate tax rate;
  • The company does not claim carry back relief, group relief, investment allowance, research and development tax allowance, foreign tax credit and tax deducted at source.

The company is also not required to submit financial statements, tax computation and supporting schedules with the Form C-S unless requested by IRAS.

Regarding to Form C:

If your company does not qualify to file Form C-S, you must submit Form C. Together with form C, you must file the company’s financial statements, tax computation, and supporting schedules.

Filling process

There are still some questions about filing Form C/C-S which entrepreneurs would like to know. Firstly, as same as other filing requirements, there are 2 ways to file Form C/C-S with e-File on 15th December or paper File on 30th November annually.

As announced in Budget 2016, in line with Government’s direction for more cost effective delivery of public services and the Smart Nation vision to harness technology to enhance productivity, e-Filing of Corporate Income Tax returns (Including ECI, Form C/C-S) will be made compulsory in a phased approach from Years of Assessment (YAs) 2018 to 2020 as follows:

As an easy and convenient way to file your company’s requirements, e-Filing itself has some benefits that business owners should know clearly.

  • Comparing to paper-filing, e-filing having its due date half a month later than hard-file one;
  • Auto-computation system of certain fields will minimize the filing errors;
  • Granted companies to save draft if your company is not yet ready for submitting;
  • Receive step-by-step guidance from iHelp;
  • Instant computation of estimated tax payable;
  • Instant acknowledgement upon successful e-Filing.

Usually, IRAS will send companies either a Form C-S or Form C e-Filing notification letter by May of each year, starting from the second year following the year of incorporation. If your company is new, IRAS will provide your company with New Company Start-Up Kit, which is an interactive e-learning guide, not only to learn about these Forms but also very necessary stuffs your company have to accomplish especially corporate tax filing obligations. This Kit will also provide you with the information you need for your first tax filing process – from incorporation to the filing of the first Corporate Tax Return.

Notes that companies have to submit additional documents required for Form C. Some of these relevant documents are tax computation including details of any asset acquisitions or disposals, and financial statements also (prepared by the Singapore Financial Reporting Standards and Singapore Companies Act, Chapter 50).

Signing on Form C/C-S can belong to any person authorized by the company. However, the director or principal officer of the company is still responsible for the company’s tax affairs.

The penalty for late submission Form C/C-S

Late submission of form C/C-S can be a costly mistake that companies have to be concerned. Many companies have been through this mistake over the years. If your company is in this position, IRAS would likely send you a Notice of Assessment (NOA) based on the ECI submission earlier by the company. It’s IRAS to forecast your company’s tax that you must pay although the tax is not accurate so if there is any disagreement, you should inform IRAS by filing a Notice of Objection within two months. There are also fines for either late submission or late payment. Furthermore, if the company fails to submit every filing requirements above, your company might have received a court summons and the penalty might be as much as twice the required amount of tax.

Business owners can seek for assistance to file annual requirements on IRAS guiding website for more details or you can contact ACE Global Accountant for experienced tax professional support in order to ensure your company tax filing to be done accurately and also in compliance to local laws.

 

Definition of Estimated of Chargeable Income (ECI) and When to File

What is ECI?

ECI is standing for Estimated Chargeable Income, as its name, is an estimate of your company’s taxable profits (after deducting tax-allowable expenses) for the fiscal year ended or  a Year of Assessment (YA). It is necessary for a business owner to file  ECI with IRAS because of the need of raising an early assessment.

Because this is an estimation, there’s no need for the figures to be strictly correct in ECI. If your chargeable income in ECI is different from the reality, IRAS will raise an amended assessment.

When to File ECI

All companies including new companies are required to file ECI within three months from the end of their financial year except for companies that qualify for the administrative concession and those that are specifically not required to file.

Companies will receive a notification from IRAS to file the ECI in the last month of its financial year. Companies should still proceed to file the ECI within three months from its financial year end even if they do not receive the ECI notification.

There will be cases when corporate failed to comply with the requirements after 3 month for filing, IRAS will issue a Notice of Assessment (NOA) based on its estimation of that particular company’s income. NOA might be the last assessment for consideration. Any disagree with the estimation of IRAS, companies have to lodge an objection with agency within one month from the date of NOA. You can either do this process by writing to the agency’s corporate tax division.

Examples of ECI Filing Deadlines Based on Different Financial Year Ends.

Advantages and tips of filing ECI

It is important for your company to file ECI if you are in the position of tax payable. IRAS will provide you with flexible payment options, for example, they permit you to pay tax in instalments if you file ECI early.During the last month of fiscal year, companies will receive a notification from IRAS, an ECI filing request,  Instead of paying all taxes totally, your company is able to pay its taxes over a few months. Your cash flows will literally improve its performance. This following table will show you detail:

As mentioned before, there are 2 ways you can have you ECI filed: e-filing or paper filling. Since it was announced in Budget 2016, in line with Government’s direction for more cost effective delivery of public services and the Smart Nation vision to harness technology to enhance productivity, e-Filing of corporate Income Tax Returns (Including ECI, Form C and Form C-S). Notes that only company with GIRO (automated electronic payment service) qualify for it. Companies that do not have an existing GIRO arrangement for Corporate Tax are advised to apply for GIRO at least two weeks before e-filing their ECI.

That’s why the e-filing is highly recommends by the Singapore Government. As you can see the advantages in the number of instalments your company should have if you file ECI on time and of course by e-filing.

Difference in amount declared as ECI and Chargeable Income reported in Form C-S/ C

The chargeable income reported in Form C-S might be different than the chargeable income estimated in ECI, the excess tax paid earlier will be refunded automatically. The additional tax must be paid within one month from the date of the NOA. Note that if there is a significant difference between the ECI reported earlier and the chargeable income reported in the Form C-S/S subsequently, IRAS may require the company to provide an explanation.

This is an overview of ECI, if there is any issue while gaining information in this field.

General compliance requirements for Singapore companies

Foreign entrepreneurs or companies who would like to incorporate private limited Singapore company should consider some important compliance requirements below:

  • Three basic requirements you must adapt for Singapore incorporation as follows:

+ Appointing a qualified resident* director who will be your Singapore company nominee director. Kindly note that this person must be at least 18 years old, not bankrupt, and free of any malpractice charges.

+ Appointing a resident* company secretary within six months of your Singapore company’s incorporation.

*refers to a Singapore Citizen, Permanent Resident, or EntrePass/Employment Pass holders

+ Providing a local, physical Singapore address as registered address of your incorporated company. It cannot be a postal address, and must be open and accessible to the public during normal office hours.

  • Annual filling requirements of your incorporated Singapore required to fill by IRAS and ACRA are:

+ Annual Return (AR)

+ Annual General Meetings (AGM)

+ Estimated Chargeable Income (ECI)

+ Form C/C-S

For more information, refer to A Singapore Company – Annual Fillings 

  • Registering for the Goods and Services Tax (GST) if your Singapore company actual annual revenue exceeds S$1 million. The GST is also considered as Value Added Tax (VAT) in many other countries. In Singapore, GST registered companies have to add GST tax (a standard tax rate is 7%) into their products’ or services’ price, and submit these amount of GST tax to IRAS. For more information, refer to Overview of Goods and Services Tax (GST) in Singapore
  • Obtaining business licenses before commencing your Singapore business operations. Restaurants, educational institutes, travel agencies, financial services and medical fields are some categories that are required to obtain business licenses in Singapore.
  • Your company will receive audit exemption if you meet at least two of the conditions below in the last 2 FYEs:

+ Total annual revenue of no more than S$10 million

+ Total assets worth no more than S$10 million

+ No more than 50 employees

  • You need to keep necessary accounting records that can sufficiently explain the transactions and financial position of your Singapore company. These records need to be kept for at least five years after the related transactions have been completed.
  • The director(s) of your company need to disclose any material personal interest that is related to company affairs, as well as any information that is necessary to avoid a perceived or actual conflict of interest.
  • You need to lodge any changes in company particulars to ACRA within the time frames allocated for that item. If you fail to update the particulars in time, you will incur penalties.
  • You need to publish your Unique Entity Number (or company registration number) on all official company correspondence.

For more questions related to Singapore company incorporation, contact ACE Global Accountant for a quote