Both individuals and companies are subject to income tax in the year of assessment by the Internal Revenue Service (IRS).On the basis of the previous year’s income, the chargeable income and its related income tax are computed. When it comes to base period taxation, this means that any income earned in 2016 will be taxed in the following year, hence the reference to the Year of Assessment (YA).
- If a Singapore firm receives money in one financial year, that money is often taxed and assessed the next year, which is referred to as the Year of Assessment.
- When calculating a company fiscal year, you may use any fiscal year end date, however most organizations choose December 31 as their fiscal year end date.
- For the financial year in which the company maintains its principal office in Singapore, ACRA will enter the company’s tax returns directly onto the website of Singapore’s Inland Revenue Authority (IRAS).
- Remember that if a company fiscal year ends after more than 12 months, this must be noted at the time of income tax filing as well as taxed as two years in the following year.
Chargeable Income Predictions (ECI)
The total income you get after deducting all permitted charges and payments, which may include: Estimated chargeable income
Trade income was earned during the fiscal year.
Earnings as a result of work
Estimated Chargeable Income (ECI) is a measure of the company’s expected taxable income for the year in which the assessment is made, and it includes revenue from sources such as rent, royalties, and other similar payments (YA). IRAS, Singapore’s tax agency, requires that the ECI be submitted within three months of your company fiscal year end. The ECI will subsequently be processed by IRAS (FYE).
The company may be obliged to file an ECI at the conclusion of the fiscal year if the following requirements are met:
The current fiscal year’s revenue is unlikely to exceed S$5 million.
Your expected annual taxable income is $0. (NIL)
The previous year’s financial year is used as a reference for calculating the foundation period for any Year of Assessment (YA).
Negative effects of not knowing what the Year of Assessment is all about
Due to a lack of information regarding the year of assessment, the IRAS may penalise the accounting department for failing to file their tax returns on time.
When it comes to your taxes, online supports can help
Calculation of taxes, preparation of tax returns, and submission to IRAS of these returns.
It is critical to assist customers in submitting their work on time and in the correct format during the proper assessment year.
All Singaporean tax returns must be filed electronically by the year 2020. The Internal Revenue Service (IRS) will send you an assessment letter by May 31 of the following year after the filing of your tax return. After that, the company will have one month to pay back the money they borrowed.
- Internal Revenue Service (IRS) may require an explanation from the taxpayer if the taxable income reported on Form C-S/C is much lower than the taxable income reported on Form ECI.
- It is important to remember that in Singapore, directors who fail to file their tax returns on time risk being penalised or given a judicial summons.
- Form C/C-S/C-S (Lite) must be submitted to the Inland Revenue Department in Singapore in order for a company to file a corporation tax return.
- By November 30 of the fiscal year in question, form C/C-S/C-S Lite must be filed for the fiscal year in question.
All Singaporean tax returns must be filed electronically by the year 2020. After a successful submission, IRAS will provide an assessment notice. The taxes that your company owes must be paid within one month after that.Those with questions about Singapore tax are encouraged to get in contact with us so that we can respond to your inquiries.