Accounting and tax
Healy Consultants Group PLC will be pleased to assist our Clients for timely compliance of their annual legal, accounting and tax obligations.
- A company, whether incorporated in Singapore or otherwise, is considered a resident of Singapore for tax purposes if it is managed and controlled in Singapore. The corporate tax rate for resident Singapore companies is 17%. This corporate tax rate is also applicable to subsidiaries registered in Singapore and to branches of foreign companies;
- Companies are entitled to a 40% corporate income tax (‘CIT’) rebate capped at S$ 15,000 for Year of Assessment (YA) 2018 and 20% CIT rebate capped at S$ 10,000 for YA 2019;
- There is a partial tax exemption of: i) 75% on the first S$ 10,000 and 50% on the next S$ 290,000 of the company’s regular income for YA 2010 to YA 2019; ii) 75% on the first S$ 10,000 and 50% on the next S$ 190,000 of the company’s regular income from YA 2020 onwards;
- A payer must withhold tax when certain types of payments such as interest, royalty and others are made to the non-resident companies. The withholding tax rate would range from 10% to 15%. There is no withholding tax on dividends paid by company resident in Singapore;
- There is no capital gain tax and inheritance or gift tax in Singapore;
- GST is Goods and Service Tax and it is imposed on supply of goods and services by a taxable person in Singapore and on the import of goods by any person in Singapore. Standard rate of GST is 7%. Few items are exempt from GST such as goods for export and international services and sale/ lease of residential land;
- Personal income tax in the country follows a progressive system and ranges between 2% and 22%;
- From YA 2019 onwards companies will be granted a 20% Corporate Income Tax Rebate capped at $10,000;
- Currently, only group relief is available in Singapore and not tax consolidation;
- A Singapore tax resident company can enjoy tax exemption on its specified foreign income that is remitted into Singapore. And include the link as well.
Goods & Services Tax
- A company must be registered to collect GST if its annual turnover exceeds or is likely to exceed S$1 million from the sale of taxable goods and services. This requirement may be waived if most of the goods or services are exported or supplied internationally (“zero-rated supplies”);
- Advantageous for companies to register for GST when they are having considerable amount of input GST paid on their purchases and expenses, as they will be able to claim these input GST while submitting GST returns.
Filing Due Dates (Corporate Income Tax)
Mode of Filing Filing Deadline e-Filing 15 Dec Paper Filing 30 Nov
Consequences for Late / Non-Filing of Tax Returns
IRAS may take the following actions if companies fail to file the Form C-S/ C, accounts and tax computation by the due date:
- Issue an estimated Notice of Assessment (NOA). The company must pay the estimated tax within one month;
- Offer to compound the offence with a composition amount not exceeding $1,000;
- Issue a Section 65B(3) notice to the director to submit the required information in the Form C-S/ C to IRAS; and/or
- Summon the company or person responsible for running the company (including the directors) to Court.
Tax exemptions and rebates
If client owned bank account in Singapore with SG$ currency then they are subjected to Singapore corporate tax 17%, otherwise please provide support document or summary of transaction that show income derived from outside Singapore.
- 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 by directors and members residing outside of Singapore, then it is considered as a non-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 are 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 are met, it is possible for the foreign income of a Singapore resident company to be legally tax exempt.
- Good news for a newly registered Singapore Companies. Entrepreneurs can now enjoy tax rebate on the profit in the first three financial years. Singapore Government exempt Private company on the following eligibility Criteria;
- Registered in Singapore;
- Tax Resident in Singapore for the given year of assessment;
- Have more than 20 shareholders consistently throughout the assessment year or at least one individual must hold at least 10% of total number of issued ordinary shares in the company.
- In order to minimize the global withholding tax, Singapore has signed 84 double taxation treaties. Singapore was one of the 68 countries that signed OECD Multilateral instrument on 7th June 2017.
- As per Income Tax Act and the Economic Expansion Incentives (EEIA), Singapore offers wide range of investment incentives including tax holidays and concessions, accelerated depreciation schemes and favourable loan conditions;
- To stimulate entrepreneurship, the Singapore government offers an extremely attractive tax exemption scheme for start-up companies. For the first three years, Singapore start-ups 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.
- Shipping companies using Singapore registered ships enjoy a wide range of tax exemptions on income, while foreign ships have limited tax exemptions.
- Approved international shipping companies using ships in international waters also enjoy tax exemptions on certain types of international shipping income.
Tax reporting, accounting and auditing considerations
- Singapore tax reporting is straight forward, all returns can be submitted online. The Singapore tax authority is extremely efficient and organized;
- All Singapore incorporated companies must file their Corporate Tax Return by the filing deadlines: 15 Dec (for e-filing) or 30 Nov (for paper filing) of the year following the financial year. 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 instalments;
- There is mandatory e-filing of income tax returns for i) YA 2019 – companies with turnover of more than $1m in YA 2018 and ii) YA 2020 – all companies;
- All the companies must prepare financial statements in accordance with Singapore Financial Reporting Standards;
- As per the Companies Act, there is an exemption for dormant companies and small companies from filing of audited financial statements with returns . A company is considered as “small company” if: i) it is a private company for the financial year in question (i.e. it is owned by 50 members or less); and ii) if it meets at least 2 of the following 3 quantitative criteria for immediate past two financial years: a) total annual revenue not more than $10 million; b) total assets not more than $10 million and c) number of employees not more than 50;
- In accordance with GST Law, a Singapore Company is obliged to register for GST if annual sales exceed or is expected to exceed S$1 million in any calendar year. Healy Consultants Group PLC will be happy to assist you with GST registration for a one time fee of US$550;
- It is very important for all companies incorporated in Singapore to timely and efficiently fulfil their Singapore Regulatory Compliance requirements. Annual unaudited financial statements should be submitted to the Accounting and Corporate Regulatory Authority (ACRA) within 6 months of the financial year end;
- In accordance to Section 197(1)(b) of the Companies Act, the Accounting and Corporate Regulatory Authority (ACRA) imposes a penalty of S$300 for late filing of the annual return. The company director(s) are responsible to ensure an Annual General Meeting (AGM) is timely held and the Annual Return is filed within 1 month of the convening of AGM. Failure to comply is considered an offense and can lead to prosecution of the director(s);
- In accordance to Sections 175, 197 and 201 of The Companies Act, the Accounting and Corporate Regulatory Authority (ACRA) imposes penalty on unlisted companies (financial year ending on or after 31 Aug 2018) that i) fails to hold AGM within six months after financial year end; ii) fails to file the Annual Return within 7 months after financial year end and iii) fail to present audited accounts within 6 months of the financial year end respectively. Failure to comply is considered an offence and can lead to prosecution of the director(s);
- As per Section 344(1) of the Companies Act, the Singapore Government can legally strike off (click link) businesses which fail to comply in fulfilling their annual accounting, tax and statutory obligations. See this Government link for a list of all companies deregistered in September 2018;
- As per Section 155A of the Companies Act, a person who is director of 3 or more companies that have been struck off by ACRA within a 5 year period, will be barred from being director or take part in the management of any local or foreign company for five years. The person can also be levied with i) fines, ii) interdiction from entering Singapore and iii) jail time.
- In accordance to Singapore Budget 2018, the GST rate is to be raised from 7% to 9% periodically between 2021 and 2025.
Singapore company tax exemption package
- A properly structured Singapore company can be legally tax exempt if certain criteria are met;
- Press this tab to view a sample draft invoice for our standard Singapore offshore package.
Healy Consultants fees for accounting and tax support
Singapore accounting and tax task US$ 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 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 Quarterly GST reporting services (active entity) 950 Quarterly GST reporting services (dormant entity) 450
Note: * For an active trading company, these accounting, audit and tax fees are an estimate of Healy Consultants Group PLC fees to efficiently and effectively discharge your annual company accounting and tax obligations. Following receipt of a set of draft accounting numbers from your company, Healy Consultants Group PLC will more accurately advise accounting and tax fees
Monthly bookkeeping service
Healy Consultants monthly book keeping fee US$550 includes i) receive the monthly invoices from our Client, ii) label monthly bank statement transactions, iii) preparation of monthly income and expenses statement, iv) highlight anomalies and v) monitor monthly profit levels to minimize annual tax.
Maintaining accounting, secretarial and corporate structure data
Entities should maintain proper books of accounts and also record all invoices and receipts for their company expenses and income. The same can be required at any time by the Singapore authorities;
Entities should also maintain the secretarial records such as board resolutions and meeting minutes of all the important management decisions taken by the Directors;
Under Singapore legal system for business, the information related to the corporate structure such as shareholders, directors, shares and secretaries is centralized by the Accounting and Corporate Regulatory Authority’s bizfile system. However, any change in the corporate structure of the entity must be immediately notified to secretary of the entity for updating of the ACRA records.
It is important for our Clients to be aware of their personal and corporate tax obligations in their country of residence and domicile to 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.