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What Must Know About Corporate Tax Filing In Singapore?
File corporation tax, Singapore companies have 2 basis compliances to fulfill in every financial year. First, business owners must prepare the Financial Statement for annual ACRA filing within 6 months of the Financial Year End. Thereafter, all companies must file Corporation Tax Return by 30 November or 15 December of the following year. Inactive companies and companies in red must prepare tax report, tax schedules and form C/C-S.
Singapore has been recognized as one of the most Pro-Business Country for setting up a company. To encourage entrepreneur spirits, IRAS (Inland Revenue Authority of Singapore) has raised the annual revenue threshold for Form C-S from $1 million to $5 million. Form C-S is a much-simplified Tax Filing method and will reduce the lead time for the preparation of Corporate Tax Filing.
Companies will not be required to submit Financial Statements and Tax Computation during E-Filing. However, IRAS has the authority to request for the documents at any time.
What Is The Obligation For Company Tax Filing In Singapore?
- Estimated Chargeable Income (“ECI”) within 3 months of Financial Year End
- Corporate Income Tax – Form C or Form C-S by 30 November of the following financial year.
What Is Estimated Chargeable Income(ECI)?
It is computed based on company taxable income after deducting tax allowance expenses. All companies are required to file their ECI on a timely basis even when the estimated ECI is zero.
How Can I File My Own Corporation Tax?
Companies can file their own Corporate Tax after the Unaudited Financial Statement fit for ACRA filing is properly prepared. Before preparing your tax computation, it is important to identify the Key Corporate Tax issues as follow.
|Type of Corporate Tax||Rate|
|Tax rate on business profits||0 – 17%|
|Tax rate on capital gains||0%|
|Tax rate on dividends payable to shareholders||0%|
|Tax rate on foreign-sourced income not repatriated to Singapore||0%|
|Tax rate on foreign-sourced income repatriated to Singapore||0 – 17%|
Double Tax Treaty for Foreign Sourced Income
Singapore has signed Double Taxation Agreement with over 80 countries. With DTA, it boosts Singapore as an international headquarter. A Singapore based company who has already paid tax for its overseas operations will be able to claim relief for the tax payment paid on foreign sourced income.
Singapore Tax Residency Submitting a Certificate of Residence to the foreign country, if you bring in foreign income from a treaty country.
Overseas Tax Residency You are a tax resident of a treaty country you will have to submit to the Inland Revenue Authority of Singapore, a completed Certificate of Residence from Non-Residents (Claim for relief from Singapore Income Tax Under Avoidance of Double Taxation Agreement) that is duly certified by the tax authority of the treaty country.
Types of Company Tax Filing Fines in Singapore
It is important to note that every company or business incorporated in Singapore is required to pay corporate tax under the Income Tax Act. Any revenue gained from Singapore or transferred from foreign countries is liable to be charged under corporate tax.
The statuary board of Singapore, IRAS, maintains a strict policy for filing of corporate tax and imposes heavy fines on companies for inaccurate tax filing, late or non-payment of Corporate Tax and especially Tax evasion.
Let’s take a look at some of the penalties for the following:
Inaccurate Tax Filings
· 200% of the tax undercharged, Fines of up to S$5,000; and/or Imprisonment of up to 3 years if convicted
Late or Non-Payment of Corporate Tax
· 5% penalty of the tax undercharged, with subsequent penalties of 1% imposed for each month the tax remains unpaid (up to a total of 12% penalty).
· 300% of the tax undercharged, Fines of up to $10,000 fine and/or 3 years imprisonment if convicted.
Singapore companies are subjected to routine tax audit periodically. IRAS will also conduct their own investigation into your business if they suspect that you are making attempt to evade tax or you have been failing to submit tax on a timely basis.
Which is why it is important to engage with a qualified Cloud Accountant to ensure that your Corporate Tax Filing is conducted in a timely and accurate manner every year in Singapore.
What kind of Corporate Tax Services in Singapore is required?
Corporate Tax Planning
EBOS will work on the best method that is suitable for your company during the preparation of unaudited financial statements. You will understand your estimated tax payable almost 1 year in advance of the Year of Assessment for better cash flow management.
Corporate Tax Computation & Schedules
EBOS follows the standard procedure required by Inland Revenue Authority of Singapore. We will look at your financial statements, prepare the workings on schedules to be added into your Tax Computation. This is important step because Tax audit always fail at this part when companies are unable to furnish the tax computation and workings prepared according to the Singapore Tax Standards.
Preparation and Filing of Form C or Form C/S
Corporate Tax Filing season starts from June to November annually. Our tax specialist will review the tax computation done previously to ensure that all updated rebate and tax exemptions are updated based on the current year government’s guidance. Tax regulations change every year due to the change of policies from the Singapore government. Therefore, it is our duty to ensure that you are the latest update on your Form C & C/S every year just before filing.
Replying to IRAS
As you are aware that all companies are subjected to Tax Audit. When you engage EBOS Cloud Accountants, we are always ready to assist you to answer all tax queries. Simply snap the IRAS query letter, email to EBOS Cloud Accountants. We will dig through our working, schedules and Tax Computation to reply to IRAS on your behalf.
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