Did you file with ACRA or IRAS every year?
The Singapore Companies Act stipulates that every incorporated company must file annual returns to stay compliant with the country’s laws. It is the work of the two government agencies – ACRA and IRAS to oversee and enforce compliance in companies.
The main reason for appointing a local corporate secretary is so as to be in compliance with the laws of Singapore. He can also help your company with ACRA compliance matters. Appointing a tax agent is equally important as well. They help your firm with to stay safe with the tax authorities of Singapore.
Filing with ACRA by Company Secretary
According to the Financial Reporting Standards of Singapore, every company should prepare end of the year financial statements. These statements show a summary of the company’s financial activities during that particular fiscal year.
It is recommended that all the financial statements to be submitted in eXtensible Business Reporting Language, i.e. XBRL format. This is an XML-based format for financial statements that is used by businesses to exchange financial information.
Every incorporated company in Singapore must file annual returns with ACRA each year. This help keeps its basic information up to date and in compliance with the government. In addition, a company should always attach its audited financial statements when submitting the annual return with ACRA. If a company is a small exempt private company, then submitting the unaudited financial statements is only recommended as best practice. Dormant companies (which have no accounting transaction during the financial period under consideration) are also exempted from having to prepare and submit financial statements.
Criteria for Audit Exemption
- It’s total annual revenue from the previous fiscal year must be less than S$10 million
- It’s total assets from the previous fiscal year are less than S$10 million
- The total number of employees in the previous fiscal year are less than 50
If a company meets at least 2 out of 3 criteria, then it’s exempted from being audited. That however means the firm will still need to prepare the unaudited financial statements report.
Filing with IRAS by Tax Agent
Every company incorporated in Singapore must file annually two reports with IRAS. They include:
Estimate of Company’s Income
All Singapore companies should file their estimated income (also known as ECI) with IRAS for every financial year unless exempted from doing so. Exemption criteria include the following:
- The estimate of the company’s income is nil; and
- The annual revenue does not exceed S$1 million
If filing is required, this must be filed within 3 months from the financial year end.
Year End Income Tax Return
After a company declares its estimated income, it must file a final year end income tax return to IRAS. This tax return includes showing a detailed computation of the actual tax to be paid to IRAS. However, a dormant company (did not carry business and has no income for the financial year) is exempted from filing the income tax return if they are granted a waiver.
Most firms would like to do this by themselves to save cost. However some does not have knowledge of doing it. Thus they engage the help of a professional service provider such as J Accounting Pte Ltd who is a tax agent registered with IRAS for assistance.
