Singapore is no doubt one of the leading business hubs in the Asian Continent. This is because it has rules and regulations that help businesses thrive the right way. One of the ways is filing the corporate Tax return in Singapore for businesses.
Taxation is usually imposed on all the income of your business. This includes income from foreign dealings as well. It is worth knowing that there is a single tier system of taxation, estate tax, capital duty, and wealth tax.
Rates of Corporate tax
The corporate tax stands at 17 percent. This is done on the foundation of the business’ chargeable income. Evidently, this rate is one of the lowest compared to other countries around the world. The most exciting part is that it can become lower if you are keen to take advantage of schemes, incentives, and subsidies by the government.
Corporate Tax Residency
The IRAS — the Inland Authority of Singapore determines what the corporate tax will look like. By carrying out the process, the IRAS will look at the control and management of the company and make decisions based on the strategies of the business and its policies. The place where decision-making meetings happen decides on where the control and management of the company is. The IRS will help a company based in Singapore to get an exemption on service income on foreign sourcing.
Determination of the Business Fiscal Year
Each business is required to determine its year-end of finances which doesn’t have to be 31st December. However to enjoy free tax operations as a new company you need to keep your financial year end (FYE) within 365 days.
Yearly Filing Requirements
It is necessary for each company to do annual returns (AR) filing to the relevant body that regulates businesses and accounting in Singapore – IRAS. Every company needs to do filing separately because consolidated returns are unacceptable.
This annual tax return filing needs to happen by 30th November. E-filing has been made mandatory in 2018 and so companies need to adopt it.
Form C / C-S
Filing returns are not only for businesses that are making profits; they are also for loss-making businesses. Form C-S has conditions that must be met to file your returns. If you don’t qualify you can file form C together with the computations of tax, financial statements and any schedules that support your filing. The following conditions must be met to qualify for Form C-S:
- Incorporation in Singapore
- Revenue adding to a maximum of 5 million dollars and below annually
- Getting income at the 17 percent tax rate
- Not claiming a credit for foreign tax, group relief, at source tax deductions, carried-back allowances or losses of the current year and investment allowance
The Form C-S was specially made for small business to have a simpler filing of tax return in Singapore. The file is only three pages and includes declaring your company as an eligible business, giving tax adjustment information, and the financial accounts information. You won’t need computation of taxes, financial statements, and other information because they are already included in the form. However, it is necessary to have all the records to submit anytime the IRAS needs them