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IRAS company requirements in Singapore

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Any company that wishes to do business in Singapore has to be compliant with the Inland Revenue Authority of Singapore (IRAS). And whether your Singapore company is active or dormant, all tax filings are compulsory. 

What compliance requirements does IRAS have?

  • Preparing and filing Estimated Chargeable Income (ECI)
  • Keep accurate and proper accounting records
  • Preparing financial statements
  • Auditing your financial statements (if your company needs to)
  • Filing your income tax return
  • Filing your GST

Filing your ECI (Estimate of Chargeable Income)

  • File with: IRAS
  • When: within 3 months of the end of financial year

Incorporated companies in Singapore must declare their revenue and the Estimated Chargeable Income (ECI) by filing an Estimated Chargeable Income form with IRAS.  You must file an ECI regardless of income. If the estimated chargeable income for the company is zero, a “Nil” ECI must be filed. 

 

The only way this can be waived is if the annual revenue is not more than $5 million for the financial year, and ECI is ‘nil’ for the year of assessment.

Keep accurate and proper accounting records

If your company performs a moderate amount to many transactions each month, it is highly recommended that you perform bookkeeping consistently during the year to keep your finances in order. This includes ensuring that all of your expenses are deductible against relevant income.

 

On the other hand, if your company doesn’t have many financial transactions each month, you can easily do your bookkeeping monthly or quarterly.  

Prepare financial statements

  • File with: IRAS (as part of your Form C-S) and with ACRA (as part of your annual return)
  • When: after the end of the financial year

Using your accounting records, you will also need to prepare financial statements that consist of the following:

  • Comprehensive Income/Profit-and-Loss
  • Financial Position (Balance Sheet)
  • Cash Flow
  • Equity Changes

These financial statements need to be created following the Singapore Financial Reporting Standards (SFRS) and must be kept for 5 years.

Auditing your financial statements

  • File with: ACRA
  • When: after your financial statements (if required)

You will need to ensure that your financial statements are audited if your Singapore company meets any two of the following three conditions: 

  • Total yearly revenue of S$10 million or greater
  • Total assets of S$10 million or greater
  • 50 or more employees

Also, if your Singapore company is part of a group, the company will be audited according to the financial standing of the entire group – not just the individual company.

Filing your tax return (Form C or Form C-S)

  • File with: IRAS
  • When: Nov 30 (or Dec 15 if e-filing)

Singapore looks to the previous year for taxation. The profits for the fiscal year that ended the year prior will be the foundation for filing the current year’s tax return. Be aware that the company’s directors must be held accountable and responsible for maintaining compliance with the requirements for annual filings.

Filing your GST

  • File with: IRAS
  • When: Every quarter

If you have registered for GST, you will need to file your GST return. All figures must be reported in SGD (IRAS provides guidelines on how to file if you have transactions in foreign currency). 

 

If you are GST registered but you do not have any transactions during that quarter, you will still need to file a nil return (ie, fill in ‘0’ for all of the boxes).

What happens if my company fails to comply with IRAS requirements?

Non-compliance with requirements above incur a financial penalty and court proceedings may be taken out against you. According to IRAS, violators may be liable to a find of S$1,000 including owed taxes. If the tax filings are more than 2 years or more, the penalty can be up to two times the tax amount.

 

There is also a penalty for late payments. You have one month from the date of notice to pay your taxes.  Should you have any objection to the amount of payable fee, you need to pay up first, and IRAS will then refund to your company if there is an excess amount.

 

Talk to us for practical advice if you have any questions at [email protected]

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