Key milestones in Singapore’s corporate income tax filing season

How to choose the Financial Year End? 

Singapore corporate income tax rate is 17 percent, which is the tax a company pays in the city-state on the income it earned in a preceding financial year. This means that the income earned in financial year 2019, will be taxed in 2020.  

But importantly, Singapore laws permit a company to determine its financial year end (FYE) as it deems fit, and does not necessarily have to stick to December 31. This effectively gives  Singapore companies 11 months to prepare and file their returns if their financial year ends in December. And if they choose their FYE as January, this time-frame increases to 22 months.

What are the Forms related to corporate income tax in Singapore?

So once, a company has decided on its FYE, it needs to submit two corporate income tax forms to IRAS every year:

• Estimated Chargeable Income (ECI)forms. These need to be submitted within three months of the company’s Financial Year End. While certain categories of companies are not required to file ECI forms, the IRAS also grants Administrative Concession to companies fulfilling certain conditions.
• Singapore Corporate Income Tax These are most commonly known as Form C-S or Form C. The due date for e-filing every year is December 15, and you have 15 days less with the due date being November 30, if the returns are filed in hard copies. The exception is for those dormant companies for which IRAS has waived the requirement to file. Right now, e-Filing is being made compulsory in Singapore in a phased manner, starting with the Year of Assessment 2018.

Receiving the Notice of Assessment (NOA) and objecting to it

In terms of ECI, the IRAS issues the NOA within one week from the date of submission of the ECI form.

In terms of Form C-S or C, the NOA  is issued within six months from income tax filing due date (either November 30 or December 15), and companies must pay their tax within one month from the date of the NOA, even if they object to the assessment. Such objections to have the tax assessment revised must be filed by the company within two months from the date of NOA.

If a company doesn’t pay the tax by the due date, IRAS imposes a 5% penalty on overdue tax.

If the company still doesn’t pay up in the next two months, a further 1% penalty per month is imposed.

This 1% penalty per month is added up for each month – for a maximum of 12 months – that the tax is overdue.