Directors’ legal obligations in Singapore
Healy Consultants helps our multi-national Clients’ timely discharge their annual Singapore accounting and tax obligations. It is important our Clients’ cooperate with us to meet Singapore statutory deadlines.
Our Client’s responsibility
- The directors (click link) of a Singapore company are obliged (click link) to timely prepare reliable and accurate annual financial statements; to give a true and fair view of the business activity during the accounting period. The financial statements are to comply with Accounting Standards issued by the Accounting Standards Council;
- Annually, the directors are responsible (click link) for submitting a legal annual return to ACRA (click link), comprising signed financial statements;
- Annually, the directors are responsible (click link) for submitting a corporation tax return to IRAS (click link), including signed financial statements;
- Other Singapore legislation our Client should be aware of:
Companies Act sections 199 (2A) Singapore companies are responsible to maintain a system of internal accounting controls; Companies Act section 199 (1) Singapore company keep proper accounting and other records that will enable the preparation of true and fair financial statements; Companies Act section 175 and 201 Annual general meeting on which financial statement should be presented must be held by company complying with the timeline.
Healy Consultants' responsibility
- Timely inform our Client of upcoming statutory deadlines;
- Prepare financial statements from the trial balance supplied to us by our Client;
- From the signed financial statements, submit a quality corporation tax return to the Singapore Government;
- Legally minimize our Clients’ international tax burden;
- Secure an exemption from independent statutory annual audit obligation;
- Healy Consultants’ accounting and tax team can assist our client to timely discharge their annual accounting and tax and audit requirements stipulated by IRAS and ACRA and minimize the administration burden;
- Our help includes: i) conducting monthly bookkeeping services ii) reconciliation of bank statements and management accounts iii) schedule and liaison with independent auditor iv) compilation and preparation of our accounting reports and financial reports for in accordance with the SFRS (Singapore Financial Reporting Standards) v) filling of legal annual return with ACRA and submission of corporation tax return with IRAS.
- So you are crystal clear as to how we timely complete our Client statutory obligations, refer to this link to view a detailed project plan for our Client’s accounting and tax engagement.
Failure to accurately and timely complete annual accounting and tax obligations
- Directors of a Singapore company that provides false or misleading financial statement shall be guilty of an offence and liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 2 years or to both under Singapore Companies Act 401(2);
- An officer of the company who is intent to deceive, furnish or make any false or misleading statements shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both under Singapore Companies Act 402;
- Failure to hold the Annual General Meeting within the stipulated timeframe shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty under Singapore Companies Act 197(1);
- Singapore Companies Act section197(1)(b) states that if a Singapore company fails to lodge the annual return of company within the required time period shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty;
- Failure to file form C-S /C, accounting and tax computation before due date will trigger IRAS’s action including i) issuance of an estimated Notice of Assessment ii) impose of a composition fee not exceeding $1,000 iii) issuance a Section 65B (3) notice iv) issuance of court summons;
- A corporation tax return outstanding for 2 years or more will suffer a penalty twice the tax liability and a fine not exceeding $1,000;
- Late payment of income tax within the required period will trigger late penalty fee;
- Tax evasion or fraud is a criminal offence;
- Under Income and tax act, IRAS imposes penalties on company directors who make errors, omissions and discrepancies in the corporation tax return without intention to evade tax i) penalty ranging from 0% to 200% of the amount of tax undercharged ii) be fined up to $5,000; and/or iii) be imprisoned up to three years;
- In cases of tax evasion, the taxpayer will: i) face a penalty up to 400% of the amount of tax undercharged ii) be fined up to $50,000; and/or iii) be imprisoned up to seven years.
ConclusionI thank our Clients’ for helping us complete their annual Singapore accounting and tax and audit obligations.