Basics of Corporate Income Tax

A company is taxed on the income earned in the preceding financial year. This means that income earned in the financial year 2019 will be taxed in 2020.
 

Basis Period and Year of Assessment (YA)
To assess the amount of tax, IRAS looks at the income, expenses, etc. during the financial year. This financial year is known as the “basis period“. The basis period is generally a 12-month period preceding the YA.

With effect from YA 2010, a company is taxed at a flat rate of 17% on its chargeable income regardless of whether it is a local or foreign company.

 All companies need to submit two form to IRAS each year: Estimated Chargeable Income (ECI) and Corporate Income Tax Return (Form C-S/C).

ECI is an estimate of the company’s taxable income (after deducting tax-allowable expenses) for a Year of Assessment (YA).

It must be filed within 3-months after company’s financial year end.

From YA 2020, e-Filing of the ECI is compulsory for all companies unless they qualify for the Waiver of Requirement or are not required to file ECI.

Companies may e-File their ECI via mytax.iras.gov.sg

The Form C-S/ C is a declaration form for companies to declare their actual income. 

From the YA 2020, e-Filing of Form C-S/ C is compulsory for all companies. The filing deadline is 15 Dec 2020.

Companies must determine, based on the different qualifying conditions, if they are required to file Form C-S, Form C or Form C-S (Lite).

Companies may e-File their forms via mytax.iras.gov.sg

There are four types of Notice of Assessment (NOA) issued by IRAS. The Estimated Tax Assessment on the NOA is computed based on:
– ECI filed by the company or tax agent
– ECI raised by IRAS due to failure to file ECI or Form C-S/C by the filing timeline, low ECI declared and advanced assessment
– ECI raised by IRAS based on Form C-S/C submitted and pending review (due to difference in ECI declared and the information given in Form C-S/C)
– Form C-S/C submitted by the company or tax agent with adjustments from IRAS

To ease business costs and support enterprises, there are a number of tax rebates, reliefs and exemption schemes that companies may tap on.

Companies must fulfil the required conditions to be eligible for these benefits.