Definition of dormant company in Singapore
In fact, a definition about “Dormant Company” with IRAS differs from ARCA in somewhat. To more details, a company being a dormancy with IRAS may be considered as an active company with ACRA.
According to IRAS
A company is considered as a dormant if it does not have any transactions or income during a given financial year or “basis period” although it may have incurred expenses. In Singapore, the amount of tax paying to IRAS will be based on the income and expenses which a company received during a financial year.
For instance, a company didn’t carry on business and receive any income in the year of 2017, it will be considered as a dormant status in the following year of Assessment (YA), is 2018 in this case.
According to ACRA
- If a company has no accounting transaction occurs during a period will be defined as a dormant to ACRA.
- Note that transactions below are not affected the dormant status of the company:
- The appointment of a secretary of a company
- The appointment of an auditor
- The maintenance of a registered office
- The keeping of registers and books
- The payment of fees to the Registrar or an amount of any fine or default penalty paid to the Registrar (ACRA)
- The taking of shares in the company by a subscriber to the memorandum in pursuance of an undertaking of his in the memorandum.
Filing requirements for dormant companies
|Income Tax Returns unless granted Waiver of Income Tax Return (Form C-S/C) Submission||Hold Annual General Meeting (AGM)
File Annual Returns (AR)
File Income Tax Return (Form C-S/ C)
Although a dormant company did not carry on business and had no income during the basis period, it is still required to file Income Tax Return (Form C-S/ C). The dormant company can be allowed to skip filling its income tax return if it is granted with a Waiver of Income Tax Return Submission.
Here are two ways to file income tax return:
- E-Filling through mytax.iras.gov.sg by accomplishing the File Income Tax Return (Form for Dormant Company).
+ Authorizing yourself as an “Approver” through e-Services Authorisation System (EASY) (It is an online portal where companies can authorize their employees or third party on behalf of the companies to access e-Services)
+After being “Approver”, log in to mytax.iras.gov.sg to fill out the form, and submit the completed form.
- Submitting a hard copy of the Form C-S/C to IRAS.
+Only fill out the first page of the form
+It is not required by IRAS to submit financial accounts
Waiver of Income Tax Return (Form C-S/ C) Submission
A dormant company will be granted a waiver of income tax return (Form C-S/C) from IRAS if the company satisfy the qualifying conditions below:
- It must be dormant and has up-to-date with the Form C-S or Form C, accounts & tax submissions till it’s cessation.
- It must not own any investments (e.g. shares, real properties, fixed deposits)
- It must have been de-registered for Goods and Services Tax (GST)
- It must not have the intention to restarting business within the next 2 years.
To apply for a Waiver of Income Tax Return (Form C-S/C), the company can choose applying between e-service and hardcopy application.
- E-service: authorize yourself as the “Approver” for Corporate Tax Matters though EASY
- Hardcopy application: fill the “Application for Waiver of Income Tax Return (Form C/ C-S) submission by a dormant company” Form. Then send to IRAS at 55 Newton Road, Revenue House, Singapore 307987
It is up to 2 months from the date IRAS receiving your application, you will be notified the result. It is not required to renew the waiver as long as your company stays dormant.
File Annual Returns
From 3 January 2016, a dormant non-listed company is exempt from preparing financial statements if:
- The company fulfils the substantial assets test; and
- The company has been dormant from the time of formation or since the end of the previous financial year.
To get more details, contact ACE Global Accountant for a free consultancy