In light of the COVID-19 situation, several Support Measures and Guidance were announced. The Accounting and Corporate Regulatory Authority (ACRA) has announced measures that the deadline for holding Annual General Meeting (AGM) and filing Annual Returns (AR) has been extended. It was highlighted that some companies have experienced obstacles to hold their AGM and filing their AR. Thus ACRA has granted the following extension:
For companies whose AGMs are due during 16 April 2020 to 31 July 2020:
- a 60-day extension
- a further 60 days of extension from the last date of extension for companies that had previously been granted extension
- the AR filing due dates for 1 May 2020 to 31 August 2020 for all companies will also be extended for 60 days.
In addition. for companies whose AGMs are due during the period 1 to 15 April 2020 there are also no penalties on them if they hold the AGM within 60 days of the due date.
At the inter-ministries level, the Government has introduced measures to help businesses cope with COVID-19. These measures include
- Corporate Tax Rates, Corporate Income Tax Rebates and Tax Exemption Schemes
- Enhanced Property Tax Rebate
- Enhance Rental Waiver
- Financing Grants and Schemes
- Managing Cash Flow and Insurance
- Assistance with Legal Contract
- Relief on Government Fees
What can you do to tap on these resources?
Let’s start with the Corporate Tax Rates, Corporate Income Tax Rebates and Tax Exemption Schemes.
The Corporate Tax Rates on chargeable income is 17%. Chargeable income is derived from taxable revenues less deductible expenses. New start-up companies enjoy the partial tax exemption and tax exemptions (refer IRAS).
For FA 2020, companies will be granted a 25% Corporate Income Tax Rebate capped at $15,000 to ease companies’ cash flow. A cap of $15,000 means that companies with tax payable of at least $60,000 in the financial year 2019 will enjoy this maximum tax savings. However, this rebate will not apply to income derived by a non-resident company that is subject to final withholding tax, and loss-making companies will not benefit from this grant too.
As announced in the Resilience Budget on 26 Mar 2020, companies with Corporate Income Tax (CIT) payments due in the months of April through June 2020 will be granted three-month deferment of these payments, automatically. That means CIT payment due in April, May and June 2020 will be paid in July, August and September 2020 respectively. This relief measure complements the automatic extensions of two months interest-free instalments as announced in Budget 2020 on 18 Feb 2020.
The latest budget statement also announced that qualifying non-residential properties which covers property types hotels, serviced apartments, MICE premises, intended use premises such as the Changi Airport and Singapore cruise centre, medical clinics, schools, etc. (full list here) will be granted property tax rebate for the period of 1 Jan 2020 to 31 Dec 2020. The property tax rebate ranges from 30% to 100%. For most properties that are eligible for 100% property tax rebate, the resultant rebate is worth an estimate of more than one month’s rental. Under the new legislation, for each property tax account that is attributable to the tenanted property, owners of qualifying properties are obligated to unconditionally pass on the rebate to their tenants.
In our next article we will continue to write about the other Support Measures and Guidance designed by the government to ease the cash flow and financial burdens for companies in the immediate period.
Has your company benefited from any of these support measures? A responsible accounting and corporate secretarial services firm which stays abreast of tax law and corporate regulatory developments helps better bookkeeping and statutory obligations. Without delay, this firm should spontaneously employ relevant measures to your statutory obligation to derive optimum results of time and cost savings. This is a period where an effective and efficient service provider will prove its worth.