Singapore, an island nation that is known for its successful business ventures and business-friendly taxes, is a great place to do business. The country is one of the most popular business destinations globally because of its competitiveness and attractive corporate tax rates (17%).
Accurate filing is important for any business, including cannabusinesses. Make sure to give this other post about 280E tax deductions for cannabis.
But it’s also important to note that any businesses, big or small, must comply with the laws and regulations for them to continue running their business. And businesses that don’t follow Singapore’s tax regime can be forced to pay fines or suffer high penalties.
Hence, this article aims to help business owners and entrepreneurs with some useful advice and tips about company tax filing in Singapore.
Check Period for Company Tax Filing in Singapore
Here’s a key fact about tax filing in Singapore – Businesses are required to file their taxes every year. This will be based on the company’s financial year-end (end of December or end of March) and year of assessment (YA).
A year of assessment refers to the year that a company is being charged by the government for taxes to meet its tax obligations. For example, if your financial year starts in January 2022 and ends in December 2022, you will need to pay your taxes in 2023.
Start-up Company Filing Taxes for the First Time
If you just started your business and you’re unsure of how to file your taxes, there’s a great way for you not to fall back or even feel under pressure. You can access the New Company Start-Up Kit on the IRAS website.
It’s an interactive toolkit that offers first-time business owners their tax filing obligations and a timeline on when to submit their first tax return with IRAS and their first annual return with ACRA. The toolkit also has a reminder feature that reminds you 1 month before the due date of your taxes, which is known to be useful for start-ups.
Prepare a Tax Computation
Filing your tax declaration for the first time can be intimidating. This is why it’s recommended to prepare a tax computation before getting on with the tax filing procedure.
This will help you prepare for the tax filing process by being aware of the amount that you’ll be paying. Bear in mind, however, that not all accounting profits are taxable.
The IRAS website has a feature called Basic Corporate Tax Services Calculator that allows business owners to assess the taxable income they might need to pay.
Don’t forget to submit your tax computation before the deadlines to avoid penalties and possible fines!
Companies in Singapore Must Submit Two Corporate Tax Returns Annually
There are two corporate tax returns that companies must file every year which are ECI (Estimated Chargeable Income) and Corporate Income Tax Return (Form C, Form C-S, and Form C-S (Lite)).
(i) ECI
An ECI is a computation of an estimated chargeable income after deducting certain expenses and allowances. A company doesn’t need to file the ECI if its annual revenue is less than S$5 million and its ECI is 0. For companies that do exceed more than S$5 million will need to file their ECI within 3 months after their financial year-end.
(ii) Corporate Income Tax Return
All companies must submit their corporate income tax return by the 30th of November each year. Businesses need to know which files (either Form C, Form C-S, or Form C-S Lite) are to be submitted,
And this will be base on their revenue level and tax matters.
Keep Proper Business Records and Accounts for at least 5 Years
Every business needs to keep records and accounts for at least 5 years for tax purposes or upon IRAS requests. This includes all internal documents like working papers, bank statements, accounting records, and, financial accounts.
Use an Accounting Software to Improve Record-Keeping and Management
Accounting software helps you create reliable and up-to-date information to enhance your business’s management processes. This includes managing your business’s finances in a more organized and logical way.
When used effectively, accounting software helps in:
- Management of the client list
- Accounting records and time cards
- Administration of a Taxable income for each client
- Tax computation and posting
- A tax calculation of operating expenses
- Business Continuity and Alerts
Hire a Financial Service Provider That Understands the Accounting Law and Language
Even if you know to keep a firm’s accounts and records. And you must always get professional help from an accountant or a financial service provider.
The first step to getting the best results from a financial service provider is to thoroughly research the company’s history and success record. This will help you identify a provider who is trained in handling tax-related issues or tax and accounting services.
If you need professional help, you can always take advantage of EBOS to help make your accounting needs easier. Our team is trained to help you prepare your accounts and records using tax-related knowledge and experience.