According to the Singapore Companies Act, all Singapore incorporated companies must file certain reports with the relevant government agencies every year. These government agencies are the Accounting Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS).
Business owners need to observe filing obligations and comply with Singapore law. Understanding filing requirements will help you plan effectively to ensure that your company doesn’t file late, resulting in fines and penalties.
In this article, we provide detailed information about what kind of reports your company must file to ACRA and IRAS, as well as their detailed requirements.
Annual Return Filing with ACRA
ACRA is the government agency that oversees and enforces corporate regulations in Singapore. Every company must file an Annual Return with ACRA within 30 days of holding an AGM or after seven months after the Financial Year End.
What is an Annual Return?
An annual return (AR) is an electronic form that must be submitted to ACRA annually. The purpose of an AR is to provide your company’s stakeholders with crucial information to make informed decisions in the coming financial year.
An AR consists of the following important things:
- Company name and registration number
- Principal activities
- Registered office address
- Details of company officers (directors, secretary)
- Shareholder details, share capital, etc.
- Annual financial statements
Some companies are exempt from having to attach their financial statements in the AR; these include:
- Small companies: Companies whose total annual revenue is less than S$10 million, total assets are less than S$10 million, with no more than 50 employees.
- Exempt Private Companies (EPC): Companies with no more than 20 non-corporate shareholders.
- Dormant EPC: Inactive companies that have not carried on any business nor generated any income in the past financial year.
Financial Statements in XBRL
XBRL is an XML-based format for financial documents that businesses use to exchange financial information. The open-source format has been required for companies since 2014.
The types of companies that are exempt from preparing financial statements in XBRL are:
- Foreign companies and their branches;
- Companies limited by guarantee;
- Companies that have corporate shareholders;
- Companies permitted to prepare financial statements following accounting; standards other than Singapore Financial Reporting Standards (SFRS), SFRS for Small Entities, and International Financial Reporting Standards (IFRS);
- Solvent EPC – companies with no more than 20 shareholders (natural persons).
Read more about XBRL financial statements here:
What is an Annual General Meeting (AGM)?
An Annual General Meeting is a meeting in which a company presents its financial statements to its shareholders. During the session, members are allowed to ask any questions related to the company’s financial position. On the other hand, the company can use this opportunity to address any issues raised by members.
The Singapore Companies Act requires companies to hold AGMs of their shareholders unless they have chosen not to do so by issuing a shareholder resolution. If a company decides not to hold an AGM, all matters that are to be discussed in the AGM can be resolved through written resolutions.
The Difference between AGM and EGM
Unlike an AGM, an extraordinary general meeting (EGM) is an unscheduled meeting. In the end, you will convene an EGM to consider urgent or new matters that cannot wait until the next ordinary meeting. An AGM is conducted on any day other than a national holiday and only during business hours, while an EGM can be carried out on any day, including a public holiday and at any time during a day.
For companies with FYE ending before August 31, 2018:
- The first AGM is held within 18 months of incorporation, and subsequent AGMs are held annually at intervals of not more than 15 months.
- The financial statements presented in the AGM must be made no later than four months (for listed companies) or six months (for non-listed companies) before the AGM date.
For companies with FYE ending on or after August 31, 2018:
- For listed companies, the AGM is held within four months after FYE.
- For non-listed companies, the AGM is held within six months after FYE.
Under section 175 of the Companies Act, a company and its directors who fail to convene the AGM can face a fine of up to S$5,000. However, to avoid prosecution, ACRA allows companies and directors to pay a composition fee of S$300 for each violation.
Although all companies must hold an AGM, there are exceptions for some. Inactive relevant companies (i.e., not listed companies nor subsidiaries of listed companies) with total assets of less than or equal to S$500,000 (consolidated value if it is the ultimate parent company) are exempt from preparing financial statements and therefore do not need to hold an AGM.
However, companies still must submit the details during their annual return filing. Likewise, private companies do not need to hold a physical AGM if all members pass the AGM resolution in writing. The written resolution can be made in hard copies or soft copies as approved by all members.
Annual Financial Statements
According to the Singapore Companies Act, all companies incorporated in Singapore and all branches of foreign companies in Singapore are required to prepare and present financial statements following the SFRS. The SFRS is in principle based on and substantially similar to the IFRS issued by the International Accounting Standards Board (IASB).
The financial statements that must be prepared are as follows:
- Report of Directors and Statement by Directors
- Independent Auditor’s Report (if applicable)
- Statement of Comprehensive Income (Profit and Loss statement)
- Statement of Financial Position (Balance sheet)
- Cash Flow Statement
- Statement of Shareholder’s Equity
- Corresponding Notes to Financial Statements
When your financial statements are ready, your company will need to have them audited by an independent auditor. You should audit your financial statements if your company meets two of the following three criteria:
- Has total revenue exceeds S$10 million;
- Has assets amount to more than S$10 million;
- Has more than 50 employees.
Your company is eligible for audit exemption if you meet two of the following three criteria by which you are then considered and included in the small company category:
- With total revenue less than S$10 million;
- With total assets less than S$10 million;
- With less than 50 employees.
If your small company is part of a group, you will be assessed as a whole (on a consolidated basis).
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Annual Tax Return Filing with IRAS
IRAS is the government agency responsible for collecting taxes in Singapore. All Singapore companies are required to file annual tax returns with IRAS.
The annual tax return includes two submissions:
- Estimated Chargeable Income (ECI), which must be filed within three months from the end of the company’s financial year
- Corporate income tax return, which must be filed no later than November 30 for paper filing or no later than December 15 for electronic filing
ECI refers to the estimated income from the company’s taxable income (net of taxable expenses) in the Year of Assessment (YA). All companies, including newly formed ones, are required to apply for an ECI within three months from the end of the financial year.
As of July 2017, the following companies are not required to file ECI:
- Companies with less than S$5 million in annual revenue
- Companies whose ECI is NIL
Corporate Income Tax
In addition to filing an ECI, companies must file an annual income tax return using form C or C-S at a later date. Currently, there are two deadlines for filing corporate income tax returns with an IRAS:
- November 30 for paper submission
- December 15 for e-filing
Note that the date of submission of the corporate income tax return is the date of the following year after the end of the financial year. For example, if the financial year ends on March 31, 2021, the corporate income tax return must be submitted no later than November 30 or December 15, 2021.
Companies that submit form C must also attach tax calculations, financial statements, detailed income statements, and other supporting documents.
What is Form C-S?
Form C-S is a simplified version of a corporate tax return that does not require the company to attach tax calculations and financial statements. To apply using the C-S form, companies must meet all of the following requirements:
- The company must be a Singapore legal entity
- The company must not generate more than $5 million in annual revenue
- The company does not claim any of the following:
-Return on allowance/loss of capital of the current year.
-Foreign tax credit and tax deducted at source.
Corporate Tax Return Filing for Dormant Companies
In general, dormant companies are still required to file corporate tax returns with IRAS, although they are entitled to certain exemptions. An inactive company can apply for a waiver to file a tax return if it meets the following requirements:
- The company has not conducted any business or generate any revenue;
- The company has submitted Form C-S or Form C, financial statements and tax calculations up to the date of cessation of business activities;
- The company must not own any investments (e.g., shares, real property, fixed deposits). If the company has investments, it must not earn any income from them;
- The company must have been revoked for goods and services tax (GST) purposes;
- The company should not have any intention of restarting the business within the next two years.
What Will Happen If I Do Not Comply with Filing Requirements?
Forgetting to file annual returns and annual tax returns can be quite the thing. But there are consequences if your company is caught not complying with filing the required documents.
Non-Compliance with ACRA
ACRA recently revised the penalty framework for non-compliance in filing annual returns, which will take effect on April 30, 2021. Companies that do not file their annual returns within three months of the filing deadline will receive a penalty of S$300. If your company does not file more than three months after the filing deadline, you will receive a fine of S$600.
Non-Compliance with IRAS
Likewise, IRAS will issue an estimated Notice of Assessment (NOA) if you do not file your annual tax return before the given deadline. The NOA may be higher than your actual earnings. After receiving the NOA, you are required to pay the estimated tax within one month. In extreme cases, if your company fails to comply, IRAS may take legal action against your company.
Is There a Filing Extension?
No. Previously, IRAS extended the submission of Form C-S/C until December 15. However, starting this year, this extension is no longer valid. Beginning in the YA 2021, all companies must submit their Form C-S/C by November 30, 2021.
How to Stay Compliant Effortlessly
Every year, your company must prepare financial statements, coordinate and hold an AGM, and submit all required filings within the timeframe permitted to both ACRA and IRAS. If you fail to meet any of these requirements, you will have to pay penalties.
That is why most companies in Singapore choose to rely on trusted company service providers who can provide you with expert guidance through every step of the annual filing process and ensure that your company complies with Singapore regulations. You can use our experienced company secretarial services to assist with filing your annual returns and annual tax returns so you can focus on running your business.