Essential Guide to Filing Corporate Income Tax in Singapore : ECI, Form C/C-S/ C-S lite and Key Compliance Dates

Singapore being the prime destination for business with appealing and strategic location, along with the simplified tax policies, one of the advantages of establishing your business in Singapore is ease in compliances burden. The companies are required to meet with handful of compliances around the year.

Generally, companies in Singapore are required to file incomes before they make corporate tax payments. In a year companies file two forms with IRAS: Estimated Chargeable Income (ECI) and form C-S/ Form C-S (Lite)/ Form C. This blog will outline through the process of filing corporate tax returns right from presentation to choosing the right form and the deadlines to meet with the compliances.

What is ECI?

The Annual Estimated Chargeable Income Amount refers to the amount that will be taxable earnings for each financial year for the company, after offsetting any deductibles or tax credits that may be awarded to it. It is important to note here that the submission of ECI is one of the most critical spheres in the income tax submission cycle as it provides the IRAS with a reliable estimate of your company’s tax position.

When to File ECI?

The ECI must be submitted by all corporations not later than three months after the close of the designated twelve-month period that is their financial year. For example, if your financial year ends on the 31st of December then your ECI must be filed and submitted on or before the 31st of March of the next year.

Choosing the Right Income Tax Form

After filing for ECI, the taxpayer most likely would wish to extend their level of satisfaction by completing the proper income tax form tailored to the income enabled by their ECI and other relevant factors that determine the financials of the company. The major forms include:

What is Form C-S/ Form C-S (Lite)/ Form C?

Form C-S/ Form C-S(Lite)/ Form C are the income tax returns of corporate entities that show the actual income earned by a company. The types of corporate income tax return filing have been summarized as shown below:

Form C-S is for companies with annual revenues of up to $5 million and Form C-S (Lite) is for companies with revenues of up to $200,000. Regardless of the level of revenue, any company can file Form C. Supporting documents are not a requirement for the submission of forms C-S. A submission of financial statements and tax computations are, however, necessary for the submission of form C. In addition, a qualifying company has to be defined and registered in Singapore. A company has to earn taxable income that is still subject to the prevailing corporate tax at the time of assessment. For these purposes, a company must have income or tax implications in the nominated financial year. In conclusion, your company should file Form C-S/ Form C-S (Lite)/ Form C irrespective of the fact that revenue has not been earned or the company is making losses.

1.     Form C-S

Form C-S is a Simplified version of the Corporate Income Tax Return that certain small companies are eligible to use and which they would have to fill to report their income to IRAS.

Form C-S comprises:

A declaration such as a verification statement for the purpose of confirming-

·         eligibility of the company

·         Tax adjustments information

·         Financial Statements information

Once your company has established its eligibility, it will not be necessary for the company to submit its financial statements and computation of taxes along with Form C-S.

Who Can File Form C-S

Your company qualifies to file Form C-S if it:

1.       Is incorporated in Singapore.

2.      Has an annual revenue of $5 million or below

3.      Only derives income taxable at the prevailing Corporate Income Tax rate of 17%; and

4.     Is not claiming any of the following in the YA:

a)     Carry-back of Current Year Capital Allowances/ Losses

b)     Group Relief

c)      Investment Allowance

d)     Foreign Tax Credit and Tax Deducted at Source

2.  Form C-S Lite

If your company qualifies to file Form C-S and has an annual revenue of $200,000 or below, you can opt to file Form C-S (Lite).

Form C-S (Lite) is a simplified version of Form C-S that requires only 6 essential fields to be completed by companies with straightforward tax matters.

Form C-S lite is similar to Form C-S and is prepared and submitted based on the financial statements prepared. The financial statements are not required to be filed by the companies filing for form C-S Lite. However, your company should prepare these documents and be ready to submit them upon IRAS’ request.

3.     Form C

If your company does not meet the conditions to file Form C-S or Form C-S (Lite), then you must file Form C. However, a company is also required to file its financial statements, tax computation and other supporting documents along with form C.

Key Compliance Dates

To reduce the risk of incurring penalties for non-compliance, it is crucial to observe the following compliance dates.

ECI Filing Deadline: Not later than 3 months after the financial year end.

Income Tax Form Filing Deadline: 30^th November of the year immediately following the accounting period.

Filling income tax returns to IRAS is a necessity for every organization registered in Singapore. It is essential to know the type of forms, the criteria and the relevant due dates to comply with. Water and Shark Offers expert analysis and guidance to help you choose relevant Forms and help you to file tax returns timely so you can meet the requirements and avoid unnecessary consequences. With professional guidance and some careful considerations, you can deal with the tax reporting requirements with ease. Contact our experts to know more.