Accounting and tax
Healy Consultants assists our Clients’ timely discharge their annual legal, accounting and tax obligations.
- Singapore corporation tax is 17% for tax resident Singapore companies for i) local sourced income or ii) foreign sourced income remitted to Singapore;
- The government does not levy a capital gains tax. Even the GST is charged at a low rate of just 7%;
- Personal income tax in the country follows a progressive system and ranges between 2% and 20%;
Tax exemptions and rebates
- A non-resident Singapore company is legally tax exempt if all of its income and profits are derived from overseas. Consequently, it can be an excellent entity to legally book global income;
- If a company is managed and controlled in Singapore, then it is considered a tax resident company. However, if it is managed and controlled by directors and members residing outraise of Singapore, then it is considered as a non-tax resident company;
- For the foreign income to be tax exempt, non-resident companies must not hold a bank account in Singapore to which the income and profits is remitted. Companies are obliged to hold international bank accounts.
- A company incorporated in Singapore but deemed as non-resident by the authorities is legally tax exempt if all income and profits are derived from overseas. Consequently, a properly structured Singapore company can be an excellent entity to legally book global income. If certain criteria is met, it is possible for the foreign income of a Singapore resident company to be legally tax exempt;
- If a company is managed and controlled in Singapore, then it is considered tax resident. However, if it is managed and controlled by directors and members residing outside Singapore, then it is considered as non-tax resident. Therefore, foreign sourced income which is not remitted to Singapore, is completely exempt under the Singapore tax law;
- For a new registered Singapore resident company that have no more than 20 shareholders throughout the basis period for that year where all of the shareholders are individuals holding the shares in their own names, or at least one shareholder is an individual holding at least 10% of the issued ordinary shares of the company, entrepreneurs enjoy tax rebate on the profit in the first three financial years. A 100% tax exemption is possible on the first S$100,000 (US$78,000) and 50% tax exemption on the next S$200,000 (US$157,000). The effective rate for a company with S$300,000 of annual income during this period is 5.7%. Click here to access our corporation tax calculator;
- Singapore tax resident companies benefit from the country’s 76 double taxation treaties which minimize global withholding tax;
- Singapore’s recent budgets (2008-2014) have introduced a number of tax reductions and credits for research & development activity. Singapore’s tax authorities released the latest R&D tax guide in January 2015. Find out more about Singapore tax incentives;
Tax reporting, accounting and auditing considerations
- Singapore tax reporting is easy, all returns can be submitted online. The Singapore tax authority are extremely efficient and organized;
- All Singapore incorporated companies must file their Corporate Tax Return by the filing deadlines: 15 Dec for e-file and 30 Nov for paper file. Thereafter a notice of assessment will be issued to the Singapore company for corporate tax settlement. The Singapore company can pay the tax bill over 12 months, interest-free monthly installments;
- Healy Consultants is happy to assist our Client to discharge their annual accounting and tax obligations, Healy Consultants estimate annual professional fee for such service is US$2,300. Singapore-registered companies;
- In accordance with GST Law, a Singapore Company is obliged to register for GST if annual sales exceeds or is expected to exceed S$1 million in any calendar year. Healy Consultants will be happy to assist you with GST registration for a one time fee of US$550;
- Annual unaudited financial statements are submitted to the Accounting and Corporate Regulatory Authority (ACRA) within 6 months of the end of the accounting year. Our firm is a specialist in accounting and bookkeeping services;
- An annual statutory financial audit is not required if corporate turnover is less than US$4 million and there is no corporate shareholder;
- In accordance to Section 197(1)(b) the Accounting and Corporate Regulatory Authority (ACRA) imposes a penalty of S$300 for late filing of the annual return. The company director(s) are responsible to ensure an Annual General Meeting is timely held and the Annual Return is filed within 1 month of the same. Failure to comply is considered an offense and can lead to prosecution of the director(s);
- Annual statuary financial audit is not required if it falls under the category of small company. To be considered as a small company, it is required to fulfil 2 of the following conditions for the past two consecutive financial years: i) have a total annual revenue less than SG$10 million, ii) have less than SG$10 million in total assets and iii) have less than 50 employees;
- In accordance to Sections 175, 197 and 201 of The Companies Act, the Accounting and Corporate Regulatory Authority (ACRA) imposes penalty on companies that i) fail to hold Annual General Meetings within 15 months of previous AGM ii) fail to fill the Annual Return within 30 days of the AGM and iii) fail to present audited accounts within 6 months of AGM respectively. Failure to comply is considered an offence and can lead to prosecution of the director(s);
- As per Section 344(1) of the Companies Act, the Singapore Government can legally strike off (click link) businesses which fail to comply in fulfilling their annual accounting, tax and statutory obligations. See this Government link for a list of all companies deregistered in 2017;
- As per Section 155A of the Companies Act, a person who is director of 3 or more companies that have been struck off by ACRA within a 5 year period, will be barred from being director of other Singapore companies for up to 5 years! The person can also suffer from i) fines ii) interdiction from entering Singapore and iii) jail time.
Singapore company tax exemption package
- If properly structured, a Singapore company can be legally tax exempt if certain criteria are met;
- Press this tab to view a sample draft invoice for our standard Singapore offshore package.
Healy Consultants fees for accounting and tax support
Singapore accounting and tax task US$ Singapore active company unaudited annual tax and accounting 2,300 Singapore dormant company unaudited annual tax and accounting 950 Singapore active company audited annual tax and accounting 5,950 Singapore GST quarterly reporting 550 Singapore annual personal tax return 1,950 Singapore company residence certificate 950 IRAS written confirmation of legal tax exemption 1,500 Average monthly bookkeeping services 550
Monthly bookkeeping serviceHealy Consultants monthly book keeping fee US$550 includes i) receive in dropbox the monthly invoices from our Client ii) label monthly bank statement transactions iii) preparation of monthly income and expenses statement iv) highlight anomalies v) monitor monthly profit levels to minimize annual tax.
Tax exemption for start-ups
- To stimulate entrepreneurship, the Singapore government offers an extremely attractive tax exemption scheme for start-up companies. For the first three years, Singapore startups are exempt from corporate tax on the first S$100,000 and the next S$200,000 is 50% tax exempt;
- This scheme is applicable to tax resident companies that i) have less than 20 shareholders and ii) are not investment holding nor property development companies;
- Year four onwards, partial tax exemption will apply to all tax resident companies as follows: 75% on the first S$10,000 and 50% on the next S$290,000.
Keeping records and dataOur Clients should keep records of all invoices and receipts for their company expenses and income. The same can be required at any time by the Singapore authorities;
Our Clients should also keep board resolutions and meeting minutes of all important management decisions taken by the Directors;
In Singapore, there is usually no need to keep records of shareholders, directors, shares and secretaries. This information is centralized by the Accounting and Corporate Regulatory Authority’s bizfile system;
However, all changes to the corporate structure of the entity must be immediately notified to the secretary of the entity, who will thereafter update ACRA records.
It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
Click here to calculate your Singapore corporate tax
Fill in the form below and see the total tax your company may have to pay and the effective tax rate:
Frequently asked questions
When are financial statements prepared and submitted to ACRA?
When are financial statements prepared and submitted to IRAS?
When must a company submit a corporation tax return to IRAS?All Singapore companies must a corporate tax return for the financial year by i) 30th November of the following year (paper filing) or ii) 15th December of the following year (e-filing).
When are consolidated financial statements required?If a Singapore company is the ultimate holding company for one or more entities (subsidiaries), it must prepare consolidated financial statements (See SFRS 110).
When is independent statutory annual audit required?If a Singapore company meets 2 out of the following 3 requirements for two consecutive financial years: i) revenue > SG$10 million ii) assets > SG$ 10 million or iii) employees > 50, then audit is required.
When are audited consolidated financial statements required?If a Singapore company must prepare consolidated financial statements and the Group consolidated financial statements meet the audit requirements mentioned in the question above, then audited consolidated financial statements are required.
When are financial statements not required to be prepared and not submitted to ACRA?Under Section 201 of the Companies Act, all Singapore companies must prepare financial statements, no exceptions. However, if the company is a solvent EPC (see question 1), it may not submit the financial statements to ACRA.
When are financial statements not required to be prepared and not submitted to IRAS?All Singapore companies must prepare financial statements annually. However, if the company does not meet any of the 5 requirements mentioned in question 2, it is not required to submit the financial statements to IRAS. In such a case, it will only need to file Form C-S.
When are consolidated financial statements not required?A Singapore parent company need not prepare consolidated financial statements if it meets all the following conditions:
- It is a wholly-owned subsidiary or a partially-owned subsidiary of another entity;
- Its debt or equity instruments are not traded in a public market;
- It has never been required to file financial statements with a regulatory authority for issuing financial instruments in a public market; and
- Its ultimate or any intermediate holding company produces financial statements available for public use that comply with International Financial Reporting Standards (IFRS).
When is an independent statutory annual audit not required?An independent statutory annual audit is not required if a Singapore company does not meet 2 out of the following 3 requirements for two consecutive financial years: i) revenue > SG$10 million ii) assets > SG$ 10 million or iii) employees > 50, then audit is required.
When are audited consolidated financial statements not required?Audited consolidated statements are not required if a Singapore parent company meets all the requirements detailed in question 9 and 10.
For a Singapore holding company, when are entity level financial statements required to be submitted to ACRA and IRAS?ACRA and IRAS guidelines do not differentiate between a normal company or holding company. Consequently, a Singapore holding company must submit financial statements to ACRA and IRAS if it meets all the requirements in question 1 and 2.
What is the benefit to have a holding company?A holding company may enjoy the following benefits:
- Receive withholding tax on dividends, if DTAA is signed;
- Legally minimize international tax on other passive income including royalties and IP;
- Reduce risk exposure to assets of the existing company;
- Conduit to raise capital and transfer it to the existing business;
- Prepare for an Initial Public Offering (IPO).
For further details, please refer to our detailed holding company webpage.