Doing Business In Singapore: Is Your Company Required To File an Estimated Chargeable Income?
All companies including new companies registered in Singapore must file an Estimated Chargeable Income (ECI) within three months from the end of their financial year.
Companies who qualify for administrative concessions and those which are specifically not required to file are waived from this requirement.
Who are the companies who do not need to file ECI?
Companies who qualify for the waiver are those which have the following criteria:
Annual revenue of not more than $1 million for the financial year ; and
If their ECI is Nil for the Year of Assessment (YA). The ECI should be the amount before deducting the exempt amount under the partial tax exemption scheme or the tax exemption scheme for new start-up companies.
Other entities specifically not required to file their ECI are:
- Foreign ship owners or charterers for whom the Shipping Return (75KB) has been or would be submitted by the local shipping agent
- Foreign universities
- Designated unit trusts and approved CPF unit trusts*
- Real estate investment trusts that have been granted the tax treatment under Section 43 (2) of the Income Tax Act;
- Any other specific case granted waiver to furnish ECI by IRAS e.g. via an advance ruling issued
*As approved under Section 35(14) of the Income Tax Act and for the purposes of any investment scheme under the Central Provident Fund Act respectively. For these unit trusts, the income listed under Sections 35(12) and 35(12A) of the Income Tax Act is not taxed at the trustee level. Other income not covered by these Sections is likely to be negligible and hence there is no need for these unit trusts to furnish ECI.
Getting Your Tax Notice and Paying Estimated Tax
After IRAS has processed the ECI form, your company will receive a Notice of Assessment (NOA), which is an official Notice that states the amount of tax to be paid. You can also view the NOA at mytax.iras.gov.sg. However, no NOA will be issued if your company filed a “Nil” ECI amount.
The tax must be paid within one month from the date of the NOA, unless you are paying via instalment (GIRO). The NOA will include information on the various ways to pay.
Just recently, the Ministry of Finance announced that the Corporate Income Tax Rebate for YAs 2016 and 2017 will be raised from 30% to 50% of the corporate tax payable, subject to a cap of $20,000 per YA.
Companies need not factor in the Corporate Income Tax Rebate when filing their ECI for YAs 2016 and 2017 as IRAS will compute and allow the rebate automatically. The companies who have filed their ECI for YA 2016 and/or YA 2017 are not required to send in a revised ECI. However, they must make the payment for the tax payable by the due date.
For your Tax requirements or if you require any professional advises on your company or personal taxes, you can contact Enrich Consulting. We can ensure that you will not miss any filing due dates and any statutory requirements to ensure your business will operate smoothly without any distractions.
We have a team of professionals and Chartered Accountants who are on hand to guide you. Call us today and we can discuss more on how we can help your business.