Corporate Income Tax (CIT) Rebate on ECI Filed for Years of Assessment (YAs) 2018 and 2019
According to Budget 2018, the Minister for Finance announced that the cap for the CIT Rebate for YA 2018 will be raised to 40% of the corporate tax payable subject to a cap of $15,000, an increase of 20% of the corporate tax payable in the previous notice subject to a cap of $10,000. In addition, the CIT Rebate will be extended to YA 2019 at 20% of the corporate tax payable, subject to a cap of $10,000.
Companies need not factor in the CIT Rebate when filing their ECI for YAs 2018 and 2019 as IRAS will compute and allow the Rebate automatically.
IRAS has started to revise the tax assessments of companies that filed their YAs 2018 and 2019 ECI previously and received Notices of Assessment (NOAs) that did not take into account the CIT Rebate changes. The affected companies can expect to receive the revised NOAs and refunds for the excess tax paid by April 2018. If the company is paying the tax on ECI by instalments, the revised instalment plan will be issued to the company with the revised NOAs.
Compulsory e-Filing for ECI
Based on 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) will be made compulsory in a phased approach from YAs 2018 to 2020 as follows:
However, smaller companies will be provided more time for implementing the phase to modify their processes and ease into e-Filing.
Methods of Filing ECI
Companies have two ways to submit their ECI. Companies are strongly encouraged to start e-Filing early because of compulsory of e-Filling starting from YA 2018
1. e-File via mytax.iras.gov.sg
Before e-Filing, please ensure:
a. You have been authorised by the company as an “Approver” for Corporate Tax (Filing and Applications) in CorpPass; and
b. You have the company’s tax reference number, your CorpPass ID and CorpPass password
2. Paper file
The completed ECI Form can be submitted to IRAS by post:
Inland Revenue Authority of Singapore
55 Newton Road
NOTE: e-Filing of ECI is currently available for YA 2018 and YA 2019. For YA 2017 ECI, please paper file instead
Advantages of e-Filing
Companies that e-File their ECI enjoy:
- Instant acknowledgement upon successful e-Filing; and
- A greater number of instalments to pay your company’s estimated tax.
Only companies that are on GIRO qualify for instalment payment. Companies that do not have an existing GIRO arrangement for Corporate Tax are encouraged to apply for GIRO at least 14 days before e-filing their ECI.
1. The instalment plan is subject to a minimum monthly GIRO deduction amount of $50.
2. The first few instalments could be combined and deducted on the first GIRO deduction date, depending on the date of filing of ECI. Please see example 2 below.
3. IRAS reserves the right to vary the instalment plan for companies that file revised ECIs.
- e-File by 26th of each qualifying month to enjoy the maximum number of instalments allowable for that month.
- Paper file by 24th of each qualifying month to enjoy the maximum number of instalments allowable for that month.
Calculation of ECI
Companies need not factor in the Tax Exemption Scheme for New Start-Up Companies/ Partial Tax exemption and the YAs 2018 and 2019 Corporate Income Tax (CIT) rebate when filing their ECI. IRAS will compute these and allow the New Start-Up Companies/ Partial Tax exemption and CIT rebate automatically.
Getting Your Tax Notice and Paying Estimated Tax
After IRAS has processed the ECI form, your company will receive a Notice of Assessment (NOA), which is an official Notice that states the amount of tax to be paid. You can also view the NOA at mytax.iras.gov.sg. However, no NOA will be issued if your company filed a “Nil” ECI amount.
The tax must be paid within one month from the date of the NOA, unless you are paying via instalment (GIRO). The NOA will include information on the various ways to pay.
Ways to Pay
There are two ways to pay your taxes:
- Payment by GIRO
Companies that wish to pay taxes by instalment must sign up for GIRO by submitting a GIRO application.
- Payment by other Electronic Modes
You can also make payment via internet Banking, Phone Banking, NETS, etc.
GIRO Instalment Plans for Singapore-registered Companies
You may qualify for GIRO instalment plan as long as you are a Singapore-registered company.
For companies confuse how to fill Estimated Chargeable Income (ECI) and Pay Estimated Taxes, we have expertise to assist you, contact us for a quote!