Filing Your Corporate Income Tax Return
Singapore serves as an attractive business hub for companies looking to expand into the emerging Asian Economy for numerous reasons, top of which include ease of setting up, attractive corporate and personal income tax rates, tax reliefs, absence of capital gains tax, and extensive double tax treaties.
Singapore adopts a territorial basis of tax – income sourced and received in Singapore is taxed on companies at the corporate income tax rate of 17%. Foreign sourced income is taxable in Singapore only when received in Singapore.
We will help you better understand a company’s’ tax filing obligations in Singapore.
Year of Assessment
Year of Assessment (“YA”) refers to the year in which income tax is calculated and charged.
Singapore taxes income on a preceding year basis. Income earned in 2019 is taxed in YA 2020.
For a company whose financial year end is December, its income from 1 January 2019 to 31 December 2019 is assessed in YA 2020. The tax filing deadline for YA 2020 tax return is 15 December 2020.
Singapore’s headline corporate tax rate is 17% but after the tax exemption on the 1st S$200,000 of a Company’s Chargeable Income (“CI”), the effective tax rate may be lower.
As announced in Budget 2021, there will no longer be corporate income tax rebate in 2021 for companies. Previously, companies received a 30% corporate income tax rebate capped at $30,000 per Year of Assessment (YA) over a three-year period (from YA 2013 to YA 2015).
Below are a few tax exemption schemes for companies:
Start-Up Tax Exemption (SUTE) for Companies
A newly incorporated Singapore tax-resident company may for its first 3 YAs to YA2019, qualify for 100% tax exemption on its first S$100,000 of Chargeable Income (CI) and a further 50% tax exemption on the next S$200,000 of CI.
From YA 2020, this is reduced to 75% tax exemption on the first S$100,000 of CI income and 50% tax exemption on the next S$100,000 of CI. CI means income derived from the Company’s trade including all other sources (e.g. rental) and offsetting prior year unutilised as well as current year capital allowance/trade losses/donations against current year’s income
| Where any YA of the first 3 YAs falls in or after YA 2020 | Where any YA of the first 3 YAs falls in YA 2010 to YA 2019 | ||||
|---|---|---|---|---|---|
| CI | % of CI Exempted from Tax | Amount of CI Exempted from Tax | CI | % of CI Exempted from Tax | Amount of CI Exempted from Tax |
| First S$100,000 | 100% | S$100,000 | Next S$200,000 | 75% | S$75,000 |
| Next S$100,000 | 50% | S$100,000 | First S$100,000 | 50% | S$50,000 |
| Tax Payable on 1st S$300,000 CI | In YA2019: S$17,000* | In YA2020: S$29,750* (S$12,750 higher than in YA2019) |
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*Not considering corporate income tax rebate (“CITR”) :
- YA2019 CTR of 20%, capped at S$10,000
- YA2020 CITR of 25%, capped at S$15,000
SUTE applies to all new companies except:
- A company whose principal activity is that of investment holding; and
- A company which undertakes property development for sale, for investment, or for both investment and sale.
To qualify for SUTE, all 3 conditions must be satisfied.
- The company must be incorporated in Singapore;
- The company must be a tax resident in Singapore for that YA;
- The company’s total share capital is beneficially held directly by no more than 20 shareholders throughout the basis period for that YA where:
- All the shareholders are individuals; or
- At least one shareholder is an individual holding at least 10% of the issued ordinary shares of the company.
Partial Tax Exemption (PTE) for Companies
For companies that do not qualify as a new start-up or beyond the first 3 YAs of a new start-up, there is a partial tax exemption on the first S$300,000 of the CI (to YA 2019). From YA 2020, the PTE is lowered to the first S$200,000 of the Company’s CI.
| YA 2019 and before | YA 2020 onwards | ||||
|---|---|---|---|---|---|
| CI | % of CI Exempted from Tax | Amount of CI Exempted from Tax | CI | % of CI Exempted from Tax | Amount of CI Exempted from Tax |
| First S$10,000 | 75% | S$7,500 | First S$10,000 | 75% | S$7,500 |
| Next S$290,000 | 50% | S$145,000 | Next S$190,000 | 50% | S$95,000 |
| Tax Payable on 1st S$300,000 CI | In YA2019: S$25,075* | In YA2020: S$33,575* (S$8,500 higher than in YA2019) |
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Income taxes of a Company with a CI of S$300,000 (after factoring PTE) is S$8,500 higher in YA 2020 than in YA 2019 (*not considering corporate tax rebate).
All companies, including branches, companies limited by guarantee can enjoy PTE. The company need not be tax resident to enjoy the PTE, unlike the SUTE.
For more details on Corporate Income Tax, click here.
Estimated Chargeable Income: ECI is an estimate of the company’s taxable income (after deducting tax-allowable expenses) for a Year of Assessment (YA). A company is required to e-file an ECI to the Inland Revenue Authority of Singapore within 3 months of its financial year end.
The company is not required to file the ECI for a particular YA if its annual revenue is not more than S$5 million for the financial year AND ECI is NIL for that YA.
Income taxes raised is payable within a month of the Notice of Assessment (Tax bill) issued by IRAS. Payment may be made in 1 lump sum or in instalments of between 6 to10. The earlier you file the ECI, the more instalments you are entitled. For more details, click here.
Corporate Income Tax Return: All companies need to report their income to IRAS annually by filing their Corporate Income Tax Return (Form C-S or Form C). This includes dormant companies unless the company has been granted waiver of Income Tax Return Submission. The Form C-S/ C is a declaration form for companies to declare their actual income.
Qualifying small companies whose Revenue is S$5m or below are eligible to file Form C-S, a simpler version of Form C to report their income.
| Type of Tax Return | Revenue Threshold |
|---|---|
| S$ | |
| Form C-S (Lite) * | ≤ S$200,000 |
| Form C-S | ≤ S$5,000,000 |
| Form C | no limit |
*In YA2020, Form C-S(Lite) was introduced for companies that qualify for Form C-S filing and whose Revenue is set even lower – at less than or equal to S$200,000.
The Form should be correctly completed to give a full and true account of a company’s tax liability, else penalties may be imposed for an incorrect Form filed.
All companies are required to prepare the following documents before completing the Corporate Income Tax Return (Form C-S/C):
- Audited/unaudited financial statements
- Tax computation and supporting schedules
- Other claim forms
For Form C-S/Form C-S(Lite) filing, these documents need not be submitted to IRAS but should be retained in the event IRAS requests for a detailed review. For a Form C filing, the financial statements and income tax computation are required for submission to IRAS.
From YA 2021, all companies will be required to e-File their Corporate Income Tax Returns by 30 November.
From YA2020, companies can only e-file (not paper file) their income tax return.
Companies are required to authorise staff or an appointed tax agent for “Corporate Tax (Filing and Applications)” in CorpPass before they can log in to e-File Form C-S/ C on behalf of the company.
Companies can e-File their Form C in 2 ways:
- Online Form C (Preferred) – Complete and file Form C online at myTax Portal. This is the preferred mode of e-filing. Attach tax computation, financial statements, detailed profit & loss statement, other supporting documents and submit them to IRAS.
- Form C (Upload) – You can upload Form C to myTax Portal and submit it with tax computation, financial statements, detailed profit & loss statement, and other supporting documents. This upload method will be discontinued from YA 2021.
For a step-by-step guide to e-filing Form C, click here.
Form C-S and C-S(Lite) can only be filed via method I at myTax Portal. From YA2021, Form C filing can only be done via method I.
The authorised staff member can e-file the Company’s Form C/C-S/C-S(Lite) by logging on myTax Portal and selecting Business Tax Matters.
For a step-by-step guide to e-filing your Form C-S, click here.
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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.