As entrepreneurs and business owners, any business decisions you make will have tax implications, and it is important for any company to manage their tax requirement efficiently. With tax regulations being increasingly complex and tax authorities more adept at identifying companies who violate tax regulations, it is necessary for a company to fulfill their income tax obligations timely and accurately.
Whether you are an individual or a corporate entity, knowing when to file your taxes will be essential, particularly if you want to avoid the pain of paying penalties or the horror of dealing with a court summons.
This guide provides an overview of the filing deadlines for Singapore private limited companies to stay compliant with the Inland Revenue Authority of Singapore (IRAS).
Personal Tax – What Do I Need to Know?
Singapore’s Personal Tax system is a progressive tax system where the tax percentage charge depends on an individual’s taxable income. To put it simply, individuals with higher annual chargeable incomes will pay a higher percentage of tax. If you fulfil any of the criteria below, you would be considered as a tax resident by the Inland Revenue Authority of Singapore (“IRAS”):-
- A Singapore citizen who normally resides in Singapore except for temporary absences;
- Permanent Resident who has established a permanent home in Singapore; or
- Foreigner who has stayed or worked in Singapore for 183 days or more in the prior year
However, there are exceptions. For example, if one is a Singapore Citizen or Permanent Resident who has worked and lived overseas for a period of time, your overseas income will not need to be declared and will not be taxable, even if this income is credited to a Singapore bank account. To understand more about how you may qualify for this exemption, do seek the advice of a professional tax agent, who would be able to advise you accordingly.
Corporate Tax – What Do I Need to Know?
Singapore has adopted a one-tier corporate tax system and tax paid by a company on its chargeable income is the final tax. A company’s corporate tax is calculated based on the net income earned by companies while exercising their business activities in the period of one business year.
There are three main tax obligations that companies will have to pay attention to, as follows:-
- Filing of Estimated Chargeable Income (“ECI”)
- Filing of Goods and Services Tax (“GST”) payment
- Corporate Income Tax – Form C or Form C-S
For (1) and (2), the deadline for companies is dependent on its financial year end or accounting period, very much like the deadline for when a company’s Annual General Meeting (“AGM”) is due. For item (C), this is more similar to a Personal Income Tax and all companies will have to comply with the same due date as this is computed based on the Year of Assessment (“YA”), rather than the company’s own financial year end.
Why you need Singapore Taxation Services?
Taxation is a very complex matter. You may not have the necessary skill sets and expertise in this area. As you may know, when done in the wrong way, this could lead to dire consequences both for you and your entity.
- Have you heard about the existing economic and tax incentives in Singapore such as the Productivity and Innovation Credit, where this is implemented to encourage the development of new start-ups?
- How about if you are an existing businesses? Would these then be applicable to your business and if so, do you know exactly how to utilize them?
- Are you aware of the exemption and the relevant tax rates to be used? How about if you have a subsidiary in another country such as China, Hong Kong, India, Australia, Korea, Canada etc?
- There are so many tax rules and regulations coming one after another year after year. It is crucial for one to stay up to date and be relevant to these tax changes.
- Would you have the sufficient knowledge and expertise to do the necessary taxation works? For example, are you even aware how much of your income is taxable?
- Would you know how to stretch your dollar and perform the appropriate tax planning works?
- As an entrepreneur, would you rather spend your time doing your own taxation works than to plan for increase growth and expansion of your business?
- What about the Goods and Services Tax – are you aware which is more beneficial for you – i.e. to register as a GST trader, or should you register voluntarily, or not register at all?
Well, if any of your answer above is “no”, then you need support and help with taxation.
Bindwith, a professional firm specializing in tax and accounting services, provides a comprehensive guide on when and how individuals and corporate entities should compute and file their taxes. Our range of tax services include:
- Corporate tax compliance
- Partnership and personal tax filing
- Representation on tax dispute
- Tax Planning for corporate and individual
- GST filing and compliance
- GST Audit
- Negotiation of tax incentives with tax authorities
- Optimizing use of tax incentives and exemptions