How to File Singapore Corporate Tax and Stay Compliant

Singapore is renowned for its business-friendly environment and attractive corporate tax system. With a flat-rate corporate income tax system, Singapore has positioned itself as a prime destination for global investments.

The country’s effective tax rates are among the lowest in the world, making it an enticing option for businesses looking to maximize their profits. In this blog, we run through the process of filing corporate income tax in Singapore and offer you a safe solution to stay compliant.

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Who Must File Corporate Income Tax?

Under the Inland Revenue Authority of Singapore, these are entities required to file corporate income tax:

• A company incorporated under the Singapore Companies Act 1967
• A foreign business registered in Singapore, such as a branch
• A foreign company registered outside of Singapore

Sole proprietorships and partnerships are not regarded as companies, and taxes for these entities must be filed as part of personal income tax.

What is the Singapore Corporate Tax Rate?

The Singapore corporate tax rate is 17% of the taxable income. The actual rate may be lower through the use of corporate tax incentives and exemptions.

Taxable income refers to income earned after deducting:

• Tax-allowable expenses
• Capital allowances
• Reliefs

What Are the Types of Singapore Corporate Tax?

Companies in Singapore must file two types of corporate income tax returns yearly:

• Estimated Chargeable Income (ECI)
• Form C-S/C-S (Lite)/C

ECI

This tax is an aggregate of your company’s taxable profits for a YA, and must be filed within 3 months from the FYE. For example, a company with a FYE of 31 December 2023 must file the ECI by 31 March 2024.

Firms that meet the requirements of the ECI filing waiver need not file it:

1. Annual revenue capped at S$5 million
2. No taxable profits – hence ECI is nil

This filing waiver is based on a self-assessment, even if a company’s ECI filing status on IRAS’ website states “Ready to File”.

Form C-S/C-S Lite/C

This is the declaration for a company’s real income. Relative to the ECI, it is far more detailed; hence, companies usually have a longer time to file it.

The three forms vary in terms of complexity and each corresponds to a different set of requirements to help a company understand which one to file.

For example, Form C-S and Form C-S (Lite) are only valid for businesses that obtain taxable income at the prevailing corporate tax rate of 17% and does not have these claims in the YA:

• Group Relief
• Investment Allowance
• Foreign Tax Credit
• Tax Deducted at Source
• Carry-back of Current Year Capital Allowances/Losses

Companies with a yearly revenue capped at S$5 million will use Form C-S, and those with a yearly revenue capped at S$200,000 will use Form C-S (Lite).

For the rest, they must file Form C.

Companies filing Form C-S or Form C-S (Lite) need not submit financial statements and tax computations, but those filing Form C must do so.

What is the Singapore Corporate Tax Filing Deadline?  

The corporate tax filing deadline for Form C-S/C-S Lite/C is 30 November of every year. For example, if your FY closes in 2022, you must submit the form by 30 November 2023.

How to Calculate Taxable Income

Typically, companies are taxed for income earned in the financial year (FY) on a preceding basis. For example, in 2023, a company will be taxed for income generated in FY 2022. In this case, 2023 will be deemed the Year of Assessment (YA).

While most companies’ financial year end (FYE) is on 31 December, those that choose a different date and those with an FYE beyond 12 months must inform IRAS.

You can also find out your corporate tax payable with our Singapore tax calculator.

What is the Process of Filing Singapore Corporate Tax?

The authorised tax filing person acts for its corporate tax filing matters through Corppass. You must log in to the MyTax Portal under business tax, log in with Singpass, choose the type of tax to file, and proceed to do so.

After filing the ECI, you will get a Notice of Assessment (NOA) within 7 days from the filing date. If you file a nil ECI, you will not receive any NOA.

For the Form C-S/C-S (Lite)/C, you will receive the NOA by 31 May of the next year. After receiving the NOA, you must pay your taxes within 1 month.

Late Corporate Tax Filing – Penalties

IRAS encourages companies to file their corporate income tax early to avoid incurring penalties and enforcement action by the authorities. Here are some enforcement actions IRAS may implement:

• Compound your offence
• Issue an estimated NOA that your company must pay by 1 month
• Issue a notice to the company director to request for submission of required information for corporate tax filing
• Summon the company or individuals responsible for its operations, including the company directors, to court

If you fail to file your corporate tax returns for at least 2 years, your firm may be issued with a summons to attend court. If convicted, per offence, your business may be ordered to pay:

• A fine not more than S$5,000
• A penalty that amounts to twice the tax reviewed

What Are Some Typical Corporate Tax Filing Mistakes?

There are several types of tax filing mistakes that occur frequently. We list them out for you to take note and avoid:

• Erroneous claims of non-deductible expenses like:
  • Cars bought for business use, which includes the purchase cost and operational expenses for using it
  • Interest expenses attributed to non-revenue producing assets or investments that generate exempt dividends
• Failing to update IRAS on the firm’s functional currency 
• Understating income, such as omitting certain receipts or invoices issued or cash-settled transactions
• Failing to maintain proper records and accounts, leading to under-declaring sales or overstating expenses when filing tax returns

Partial Tax Exemption Scheme for Singapore Companies

Companies in Singapore, including companies limited by guarantee, can tap into the partial tax exemption scheme as stated under the Income Tax Act 1947.

From YA 2020 onwards, the partial tax exemption is as follows:

• 75% exemption on the 1st S$10,000 of normal chargeable income, and
• Another 50% exemption on the next S$190,000 of normal chargeable income

SCI is Here to Help With Filing Your Corporate Income Tax

At SCI, we understand that corporate tax filing can be a daunting task, especially for those unfamiliar with the Singaporean tax system. That’s why we are committed to providing you with a competent team of tax professionals, enabling you to focus on what you do best – running your business.

Outsource your company’s corporate tax filing to us and let our team take care of the rest today!

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Suggested Readings

Singapore Budget 2018 – Overview of Tax Changes for Businesses and Individuals Tax Planning to Optimise your Business What Does the AIS IRAS Scheme Mean for Employers? What You Need to Know about the Singapore Budget 2018