Ensuring compliance with the Inland Revenue Authority of Singapore (IRAS) is essential for any company operating in Singapore. Regardless of whether your company is active or dormant, adhering to tax filing obligations is mandatory.
What we’ll cover:
- What are the compliance requirements set by IRAS?
- Filing your Estimated Chargeable Income (ECI)
- Maintaining accurate and proper accounting records
- Preparing financial statements
- Auditing financial statements
- Filing income tax returns (Form C or Form C-S)
- Filing GST returns
- Penalties for Non-Compliance
What are the compliance requirements set by IRAS?
- Filing your Estimated Chargeable Income (ECI)
- Maintaining accurate and proper accounting records
- Preparing financial statements
- Auditing financial statements (if required)
- Filing income tax returns
- Filing GST returns
Filing your Estimated Chargeable Income (ECI)
- File with: IRAS
- Deadline: Within three months of the end of the financial year
All incorporated companies in Singapore must submit an Estimated Chargeable Income form to IRAS, declaring their revenue and ECI. It is mandatory to file an ECI, regardless of income. However, if the estimated chargeable income is zero, a “Nil” ECI must be filed. An exemption to filing ECI is applicable if the annual revenue does not exceed $5 million for the financial year, and the ECI is nil for the year of assessment.
Maintaining accurate and proper accounting records
It is highly recommended to consistently perform bookkeeping throughout the year if your company has a moderate to significant number of monthly transactions. This ensures your finances are well-organised and includes deducting all expenses against relevant income. For companies with fewer financial transactions, monthly or quarterly bookkeeping is sufficient.
Preparing financial statements
- File with: IRAS (as part of Form C-S) and ACRA (as part of annual return)
- Deadline: After the end of the financial year
Using your accounting records, prepare financial statements that include:
- Comprehensive Income/Profit-and-Loss
- Financial Position (Balance Sheet)
- Cash Flow
- Equity Changes
These financial statements must adhere to the Singapore Financial Reporting Standards (SFRS) and should be retained for five years.
Auditing financial statements
- File with: ACRA
- Deadline: After preparing financial statements (if required)
If your Singapore company meets any two of the following conditions, you need to ensure your financial statements are audited:
- Total yearly revenue of S$10 million or more
- Total assets of S$10 million or more
- 50 or more employees
If your company is part of a group, the auditing process will consider the financial standing of the entire group, not just the individual company.
Filing income tax returns (Form C or Form C-S)
- File with: IRAS
- Deadline: November 30 (or December 15 for e-filing)
For taxation purposes, Singapore looks at the previous year’s profits to determine the current year’s tax return. Company directors are responsible for ensuring compliance with annual filing requirements.
Filing GST returns
- File with: IRAS
- Deadline: Every quarter
If you are registered for GST, you must file your GST return. All figures should be reported in SGD, and IRAS provides guidelines on filing when dealing with transactions in foreign currency. Even if you have no transactions during a quarter, a nil return must be filed by entering ‘0’ in all relevant boxes.
Penalties for Non-Compliance
Failure to comply with IRAS requirements may result in financial penalties and court proceedings. According to IRAS, violators can be fined up to S$1,000, including the owed taxes. If tax filings are overdue by two years or more, the penalty can be up to twice the tax amount.
Late payments also incur penalties. You have one month from the notice date to settle your taxes. If you object to the payable fee, you must make the payment first, and IRAS will refund any excess amount to your company.