I. Background & Basics
All companies that do business in Singapore are required to pay corporate taxes. A company, for income tax purposes, is defined by the IRAS as:
• A business entity incorporated or registered under the Companies Act 1967 or any law in force in Singapore (usually includes ‘pte ltd’ or ‘ltd’ in its name)
• A foreign company registered in Singapore such as a branch of a foreign company
• A foreign company incorporated or registered outside Singapore
Sole-proprietorships and partnerships are not considered companies for income tax purposes.
II. Rate
Singapore’s Corporate Income Tax is imposed at a flat rate of 17%.
III. YA, Basis Period, & FY End
Companies are taxed on income earned in preceding financial year (FY) AKA Basic Period. The year that the tax form is submitted is known as the Year of Assessment (YA). The last day of the Basis Period is known as Financial Year End which is determined by the company based on its needs.
IV. Filing Overview
IRAS requires two different Corporate Income Tax (CIT) returns to be filed every year- Estimated Chargeable Income (ECI) and Form C / C-S / C-S Lite.
V. Tips for New Companies
• To maintain compliance, avoid penalties, and make better business decisions, companies should keep organized and thorough records of their financial transactions for at least 5 years from the current YA.
• The IRAS provides informative videos and the New Company Start-Up Kit to aid start-ups in learning about tax obligations and processes.
• Ensure those who need access to file CIT Returns have access in CorpPass.