Oh, it's that time of year again when we business owners get to show off our tax-filing prowess! While this sounds like an overwhelming and daunting task, it can be simple and stress-free. Let's dive in and explore the ins and outs of the annual tax filing adventure together.
In this guide, we'll walk you through everything you need to know, from filing requirements to preparing financial statements and keeping an eye on those important deadlines.
Without any further ado, let's conquer those taxes and pave the way for a successful financial year ahead!
Before We Begin
Before starting on your annual tax filing, here are a few essential preparatory steps you must complete: Mainly, they are:
Which Financial Statements to Prepare?
According to the Financial Reporting Standards of Singapore, every company is required to file an annual financial statement unless they are exempted. Within the financial statement, it contains a few components:
1. Statement of Comprehensive Income
Also known as the Income Statement or the Statement of Profit and Lost (P&L), it summarises your business’s total revenue and expenses for the financial year. In this statement, it tells you whether your company has profited (or loss) and in which specific area of your business was responsible for this profit (or loss). Comparing your Statement of Comprehensive Income across a few years allows you to gauge your business finance progress.
2. Statement of Financial Position
Widely known as the Balance Sheet, the Statement of Financial Position lists down all your company’s assets, liability, and stockholder equity. Essentially, it measures your firm’s net worth and long-term financial health
3. Statement of Cash Flow
Considered the most vital financial statement of them all, it lists your company’s cash inflows and outflows and shows whether your company is generating enough cash to fund your daily needs.
4. Statement of Change in Equity
Finally, this statement informs you about the changes and progress of your company’s equity.
Usually, there is a formula to calculate this statement:
Equity at the start of the financial year + Net income (from P&L) – Dividends +/- Other changes = Equity at the end of the financial year
What Are the Filing Requirements?
Based on the Singapore law, companies need to declare the total revenue earned annually and to file their annual tax returns. This process should be done electronically and filed within three months of the Financial Year End (FYE) through the MyTax Portal to IRAS.
Specifically, you must file the following:
- Estimated Chargeable Income (ECI) within 3 months of the FYE
- Corporate Income Tax Returns through Form C in November of the Year of Assessment (YA). Companies with smaller scale operations with annual revenue of $200,000 or less may file Form C-S Lite instead.
- A dormant company that has not conducted any business or generated any income for the YA, may submit the Form C-S/C for Dormant Company instead of the full Income Tax Return.
Do My Financial Statements Have to Be Audited?
When you registered a company in Singapore, you are required by law to submit audited financial statement. However, there will be exceptions if you qualified as a ‘small business’.
To qualify as a ‘small business’, your company must meet any two of the following requirements:
- Your total annual revenue does not exceed S$10 million
- Your total assets are lesser than S$10 million
- Your company has more than 50 employees
Financial statements give the company’s management and relevant stakeholders vital information about the company’s financial health. This gives shareholders a better understanding of the company’s financial future and whether the company is doing well by analysing previous annual financial performance. Without financial statements, it’s harder to attract investors or to get a loan.
What Do I Need to Know About Taxes and Filing Deadlines?
Any company operating in Singapore must file their annual tax return with the Inland Revenue Authority of Singapore (IRAS) by 30 November for paper filing and 15 December for electronic filing. The company’s directors are responsible for ensuring compliance with the annual tax filing requisite. Inability to follow these requirements breach the Singapore law and is a criminal offence that may result in fines or punishment.
In addition, all companies operating in Singapore are required to file their Estimated Chargeable Income (ECI) within 3 months of the end of the company’s FYE. For when the company estimates its chargeable income of is zero, it must be filed a “Nil”.
After which, it is essential that companies hold their Annual General Meeting (AGM) within 6 months of the FYE. Companies also have to file their Annual Returns (AR) with ACRA within one month of their AGM.
Lastly, the deadline for filing your Corporate Income Tax Return (Form C-S/ Form C-S (Lite)/ Form C) for the Year of Assessment (YA) 2021 is 30th November. Electronic filing of Form C-S/ Form C-S (Lite)/ Form C is compulsory for all companies.
Grow with Us!
The best way to make your year-end accounting and business filing tasks as easy as possible is not to wait until the end of the year to do everything all at once. To stay on top of deadlines and manage your financial records effectively, sign up our business account today!
Don't want to get caught up in the numbers game? Leave it to our team of dedicated accountants who will whip your books into shape and breeze through your IRAS filing in no time! So, you can focus on charting the course for your company's future expansion without being weighed down by numbers.
Get ahead of the curve and contact us today!
