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Companies under Liquidation

During liquidation, companies must fulfill specific tax obligations before the process can be finalized.

Duties of Liquidators

When a company undergoes voluntary or compulsory liquidation, a court-appointed or company-designated liquidator assumes responsibility for the company’s affairs. This includes fulfilling specific duties outlined in the Income Tax Act of 1947.

• Section 59(1) of the Act makes the liquidator accountable for all actions required regarding the company’s tax obligations.
• Section 59(2) prohibits the distribution of company assets to shareholders until all tax liabilities are settled by the liquidator.

The liquidator for a company undergoing voluntary or compulsory liquidation is responsible for several key tax-related tasks:

1. Filing the company’s financial statements and tax computations for all outstanding assessment years up to the liquidation date. This should be submitted electronically via ctmail@iras.gov.sg with the subject line “Submission of Liquidation Documents.”
2. Filing a subsequent Declaration of Receipts and Payments specifically for the liquidation period. This also needs to be submitted electronically to ctmail@iras.gov.sg with the same subject line.
3. Ensuring all outstanding tax liabilities are settled before the liquidation process is finalized.

To minimize their carbon footprint, liquidators are encouraged to submit all documents, including the Declaration of Receipts and Payments, electronically to IRAS via ctmail@iras.gov.sg. This eliminates the need for duplicate hard copies.

Before finalizing the liquidation process, the liquidator can verify the company’s tax status electronically on mytax.iras.gov.sg . IRAS no longer issues tax clearance letters for companies in liquidation.

To confirm no outstanding tax matters or liabilities exist, the liquidator can access these documents:

• Latest Notice of Assessment: This document details any taxes owed by the company.
• Latest Statement of Accounts: This document provides a summary of the company’s tax account activity.

Once the liquidation process is complete, the liquidator is required to retain the company’s books and records for at least five years from the dissolution date.

Filling Requirement

The frequency of filing the Declaration of Receipts and Payments (Declaration) for companies in liquidation depends on their ongoing income:

• Companies with receipts must file the Declaration annually.
• Companies without receipts need to file only once every four years.

An important change implemented on 1 May 2021, simplifies the filing process. Companies in liquidation no longer need to separate receipts and payments based on the calendar year. This aligns with the Insolvency, Restructuring and Dissolution Act 2018 (IRDA). Under IRDA, liquidators prepare a 12-month account of the company’s finances starting from their appointment date, and for every subsequent 12-month period. This 12-month period can be used directly when filing the Declaration, eliminating the need for calendar year splitting

Example

Let’s illustrate the new filing process. Suppose Company A began liquidation on 25 August 2022. The liquidator would prepare an account of the company’s receipts and payments for the 12-month period following that date, ending on 24 August 2023. This same 12-month period can be used directly when filing the Declaration with IRAS. There’s no need to split it into two separate periods based on the calendar year (25 August 2022 – 31 December 2022 and 1 January 2023 – 24 August 2023).

Company Under Liquidation with Receipts

Companies in liquidation with ongoing income must file a Declaration of Receipts and Payments (available as a 128KB PDF) with IRAS annually. The deadline for filing is within one month of the period covered by the declaration.

Example

Let’s use Company A as an example. Assuming they began liquidation on 25 August 2022, with ongoing income, here’s the filing process:

1. First Declaration: They must file a Declaration for the period 25 August 2022, to 24 August 2023, by 24 September 2023. IRAS will assess this for the Year of Assessment (YA) 2024.
2. Subsequent Declarations: Each subsequent 12-month period (e.g., 25 August 2023, to 24 August 2024) requires a new Declaration filed within one month (by 24 September 2024) and will be assessed for the corresponding YA (YA 2025 in this example).
3. Final Declaration: The final Declaration is due within 7 days of calling the Final Meeting, which must occur within 6 months of the decision to hold it. For compulsory liquidation, the Final Meeting coincides with the court order for dissolution.

Example

Continuing with Company A’s example, suppose they decided to call a Final Meeting on 21 June 2023 (within the 6-month window from 21 December 2023). Here’s what follows:

1. Last Declaration: Company A must file a Declaration for the period 25 August 2022, to 21 June 2023, by 28 June 2023 (7 days from the decision to call the Final Meeting).
2. Final Financial Statements: After the Final Meeting, the company needs to submit its final financial statements to IRAS. These statements cover the period from the liquidation commencement date to the Final Meeting date.

Example

If Company A schedules its Final Meeting for 21December 2023, an additional step follows:

• Final Financial Statements: After the meeting, Company A must submit its final financial statements to IRAS. These statements cover the entire liquidation period, from 25 August 2022, to the 21 December 2023, Final Meeting date.

Company Under Liquidation without Receipts

Companies in liquidation without ongoing income (receipts) are required to file a Declaration of Receipts and Payments (available as a 128KB PDF) with IRAS only once every four years.

However, if the Final Meeting is scheduled within this four-year period, the following applies:

• Last Declaration: The company must file a final Declaration within 7 days of calling the meeting, which itself needs to occur within 6 months of the decision to hold it.
• Compulsory Liquidation: In compulsory liquidation cases, the Final Meeting coincides with the court order for dissolution.

Example

Let’s illustrate the filing process for Company B, which began liquidation on 1 June 2021, with no ongoing income.

• Regular Filing: Since there were no receipts, Company B wouldn’t need to file a Declaration of Receipts and Payments until four years from the liquidation start date (1 June 2025).
• Early Final Meeting: However, suppose they decide to call a Final Meeting on 15 February 2023 (within the 6-month window by 15 August 2023). In this case:
  • Last Declaration: A final Declaration for the period 1 June 2021, to 15 February 2023, must be filed within 7 days (by 22 February 023).
  • Final Financial Statements: After the Final Meeting, Company B would submit its final financial statements, covering 1 June 2021 (liquidation start) to 15 February 2023 (Final Meeting).

Example

If Company B schedules its Final Meeting for 15 August 2023, they must submit their final financial statements to IRAS after the meeting. These statements cover the entire liquidation period, from 1 June 2021, to the 15 August 2023, Final Meeting date.

For a more detailed overview of the liquidation process and filing requirements, you can view these resources:

• Summary of the Liquidation Process and Filing Requirements (PDF, 100KB)
• Examples of Filing Requirements (PDF, 158KB)

Companies under Judicial Management/ Receivership

Filling Requirement

Companies undergoing judicial management or receivership are still required to fulfill their annual corporate tax filing obligations with IRAS. This includes submitting:

• Form C-S/ Form C-S (Lite)/ Form C (whichever is applicable)
• Financial statements
• Tax computations

For more information on filing these forms, visit our guide on how to file Form C-S/ Form C-S (Lite)/ Form C.

The judicial manager/receiver, if authorized through Corppass, can also access the company’s tax filing status, assessments, and payments on mytax.iras.gov.sg . Learn more about accessing digital services at mytax.iras.gov.sg

If your company needs help filing taxes for the year 2024, or requires assistance with Singapore incorporation, economy, banking, etc., feel free to call/WhatsApp us at +65 90612851 or email us at aceglobalacct@gmail.com. Alternatively, you may leave us a reply using our contact form below.

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