Statutory Compliance Requirements
Companies that have been incorporated in Singapore are required to adhere to a set of compliance requirements as prescribed under the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS) of the country. This section will give you an overview of essential filings and registrations that must be fulfilled.
All companies incorporated in Singapore are obligated to file in their financial statements (FS) with ACRA after the end of its financial year. Companies with an annual turnover of less than $5 million and having less than 20 shareholders may be exempt from filing their FS. They are instead required to submit an online declaration of their solvency when filing their annual returns. Such entities are called solvent exempt private companies (EPC). An exempt private company is insolvent if it is unable to meet its debts when they are due. Insolvent EPCs are required to file their FS with ACRA.
- Companies may file their full set of FS in XBRL format OR
- They may file the key financial data in XBRL format and then include a full set of signed copy of the FS tabled at the Annual General meeting (AGM).
The Financial statements are compiled in accordance with the Financial Reporting Standards of Singapore and consists of:
- Statement of financial position – This includes the company’s assets, liabilities, and equity.
- Statement of profit or loss – This includes the company’s profit or loss and any other comprehensive income.
- Statement of changes in equity – Information to be presented in this statement includes amount of dividends recognised as distribution to owners during the period, changes in an entity’s equity at the beginning and end of the reporting period, and any other transactions between the company and its shareholders.
- Statement of cash flows – Cash flow information provides users of financial statements with a basis to assess the ability of the entity to generate cash and cash equivalents and the needs of the entity to utilise those cash flows.
- Notes to the Financial Statement- This includes disclosures of accounting policies and estimation of future uncertainties relevant to the understanding of the Financial Statements.
For more details on Filing of Financial Statements, click here.
ACRA has introduced revisions to the filing requirements and data elements in XBRL format for companies. To view the revisions made, click here.
Companies registered in Singapore must hold an annual meeting of shareholders called the Annual General Meeting. The aim of the meeting is to present the company’s accounts and financial statements before its members so that they may analyse and raise questions, if any, about the financial position and stability of the company.
Requirements when conducting an AGM:
- Listed companies must hold an AGM within four months after their company’s financial year end. If they are not a listed company, they must hold an AGM within six months after their company’s financial year end.
- A written Notice of the AGM must be sent to all members at least 14 days in advance, depending on the company’s Constitution.
- Ordinary business subjects covered include dividend pay-outs, appointment of directors/auditors, remuneration of senior executives and directors, consideration of accounts and balance sheets. Any other topics that need to be covered must be mentioned in the Notice of the AGM, else any resolutions passed on them may not be legally valid.
- Companies are required to meet the minimum number of members for an AGM (called a quorum) for it to be considered valid. This is set a minimum number of two members if such a quorum is not explicitly stated in the company’s Constitution.
- During the AGM, directors are responsible to present documents such as financial statements, balance sheets, director’s report, auditors reports for discussion. These should be sent along with the Notice of the AGM to allow members to prepare questions to the directors.
- Following the AGM, the company is required to file its Annual Returns on BizFile+.
A private company can be exempted from holding AGMs if they send their financial statements to their members within 5 months after the financial year end.
The Companies Act requires all companies to file in their annual returns with ACRA within 30 days after the AGM to ensure that the company’s information on ACRA’s register is up to date. Information that needs to be submitted include company details, financial statements, shares, date of its AGM, among other records. Failure to submit your annual return on time may result in a late lodgement fee of $300-$600. The information contained in an annual return is crucial for company stakeholders to make key decision pertaining to the firm.
For a detailed guide on how to file your annual returns, click here.
An ECI is an estimate of the company’s taxable income for a Year of Assessment (YA) taken after deducting your tax allowable expenses. The Inland Revenue Authority of Singapore (IRAS) requires all eligible companies (including newly incorporated firms) to file their ECI within three months from the end of their financial year.
Companies need not file their ECI for a YA if:
- Their annual revenue is not more than $5 million for the financial year; AND
- Their ECI (before deducting the exempt amount under the partial tax exemption scheme or the tax exemption scheme for new start-up companies) is NIL for the YA.
You may opt to pay your corporate income tax by instalments once you have submitted your ECI. The corporate income tax rate is set at 17 % on its chargeable income regardless of whether it is a local or foreign company. It is highly recommended to process your filings early, as the IRAS offers greater number of instalments for those who do so. For further information on tax rate and tax exemption schemes, click here.
Once your company’s ECI has been processed, a Notice of Assessment (NOA) will be sent to you stating the amount of tax to be paid. Alternatively, you may also view this at mytax.iras.gov.sg. The tax must be paid within one month from the date of the NOA (unless you have arranged for payments in instalments).
Attention: Considering the Covid-19 situation, deferment of tax payment may apply to your company. For more details, click here.
Goods and Services Tax or GST is a broad-based consumption tax levied on the import of goods, and on nearly all the good and services in Singapore. Businesses are required to register for GST when their taxable turnover exceeds $1 million at the end of any calendar year (i.e. 31 Dec). You also need register for GST if you can reasonably expect your taxable turnover in a period of 12 months to be amounting to be more than $1 million.
Companies that have registered for GST are then obligated to charge GST for their supplies at the prevailing rate. This is termed as output tax and must be paid to IRAS.
GST that is incurred on business purchases and expenses (including the import of goods) is known as input tax. This may be claimed if your business satisfies the eligibility criteria.
Companies are required to file their GST return (both input & output tax) to IRAS one month after the end of each prescribed accounting period (usually done on a quarterly basis.)
GST exemptions apply to:
- Financial service
- Supply of digital payment tokens
- Sale and lease of residential properties
- Importation and local supply of investment precious metals
For more details on GST, click here.
In Singapore, all companies are required to appoint an auditor within 3 months of their incorporation unless they have been exempted from an audit. The Singapore Companies Act requires companies to submit their financial statements to the appointed auditor at least once a year to ensure their accuracy and compliance with legal regulations.
A company may be exempted from having its accounts audited if it is classified as a small company with the following criteria-
- It is a private company in the financial year in question.
- It meets at least 2 of the 3 following criteria for the immediate past two consecutive financial years:
- Total annual revenue ≤$10m;
- Total assets ≤ $10m;
- of employees ≤ 50.
A company that is a part of a group may qualify for an exemption if:
- It qualifies as a small company; and
- The entire group must be a “small group”.
For more details relating to Audit Requirements, click Here.
All materials have been prepared for general information purposes only. The information presented in this document is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice. Professional advisory should be sought before taking or refraining from any action as a result of the contents of this document.