Frequently asked questions
Frequently asked questions
Q: What is ECI and do I need to file ECI?
ECI is Estimated Chargeable Income. It is an estimate of a company’s chargeable income for a year. Under the Income Tax Act, all companies, irrespective of whether they are making profits or making losses, are required to submit their estimated chargeable income (ECI) within three months from their Financial Year End. We, as your tax agent, will help companies submit your ECI through e-filing.
If you fail to submit the ECI within the stipulated time, IRAS may raise an estimated tax amount at their own discretion.
Q: When do I need to submit my Income Tax Return ?
Under the Income Tax Act, all companies are required to submit their Income Tax Return (Form C) together with audited accounts / unaudited accounts (for companies qualifying for an audit exemption under Companies Act) and tax computation with supporting schedules by 30 November of the following year, regardless of when their accounting period ends.
For example, if the company’s Year-End is 31stJanuary 2012, the deadline is 30thNovember 2013. If the Year End is 31stDecember 2012, the deadline is also 30thNovember 2013.There is no extension applicable and penalty on late submission is chargeable.
Q: What is the current Corporate Tax rate and is there any tax exemption ?
The current Corporate Tax rate is 17%.
With effect from Y/A 2020, the following tax exemptions are given to companies on normal chargeable income of up to $200,000:
Partial tax exemption scheme for companies (From YA 2020)
|First||$10,000 @ 75%||= $7,500|
|Next||$190,000 @ 50%||= $95,000|
|Total||$200,000||= $102,500||(tax exemptions)|
Tax exemption scheme for new start-up companies (where any of the first 3 YAs fall in, or after YA 2020)
|First||$100,000 @ 75%||= $75,000|
|Next||$100,000 @ 50%||= $50,000|
|Total||$200,000||= $125,000||(tax exemptions)|
From YA 2020, Companies will be granted a 25% Corporate Income Tax Rebate capped at $15,000.
Companies need not factor in the Corporate Income Tax Rebate when filing the ECI and the Income Tax Return (Form C-S / C) as IRAS will compute it and allow the Rebate automatically.
Q: When do I have to pay the tax after IRAS has made a tax assessment of my company?
Taxpayers are given one month from the date of the Notice of Assessment to pay the tax. When no payment is received by IRAS, a 5% penalty and subsequently a 1% additional penalty may be imposed on the outstanding tax. If you do not agree to the amount charged, you are still required to pay the tax by the due date and at the same time you can make an appeal in writing within 30 days upon receipt of the Assessment.