Annual Filing Requirements for Singapore Companies
All Singapore companies must follow certain legal obligations every year regardless of their size or business structure. Compared to other countries, the obligations in Singapore are quite simple and straightforward. Still, a busy entrepreneur may forget a deadline, which can result in fines and penalties.
Therefore, it is important to understand the compliance requirements and come up with a plan to stay on top of them. The following article explains the annual filing requirements you need to fulfill to comply with Singapore company law.
Annual Filing Requirements
To stay in compliance with Singapore law, a company must file annually as required by two government agencies:
ACRA: The Accounting and Corporate Regulatory Authority that acts as the national regulator of business entities in Singapore.
IRAS: The Inland Revenue Authority of Singapore that collects taxes and specifies the annual filing requirements.
The sections below provide an overview of these annual filings requirements.
Annual Return Filing
An Annual Return is an electronic document that every company must file with ACRA each year to keep its basic information current. The return contains the following information:
- Company Name and Registration Number
- Principal activities
- Registered Office Address
- Details of company officers (directors, secretary)
- Shareholder details, share capital, etc.
The Annual Return must be signed either by a director of the company or a company secretary. The key points to keep in mind while filing an annual return are:
- A company must attach its audited financial statements when it submits an Annual Return with ACRA.
- The deadline for filing the Annual Return is 30 days from the date of the Annual General Meeting (AGM). In certain cases, a company can file its Annual Return without conducting its AGM.
Note: Small Companies are exempt from attaching their financial statements. Read more below to see the criteria ACRA uses to define a small company.
A sample format of the Annual Return that a company needs to file with ACRA is provided at the end of this article.
Attaching Audited Financial Statements with Annual Return
The Financial Reporting Standards of Singapore require all companies to prepare year-end Financial Statements that provide a summary of its financial activities during the accounting year.
However, only larger companies are required to submit audited financial statements as part of their Annual Return submission.
The financial statements must be submitted in eXtensible Business Reporting Language (XBRL) format. XBRL is an XML-based format for financial documents that businesses use to exchange financial information.
The directors of the company must ensure that the person preparing the financial statements has the appropriate knowledge and experience with XBRL to avoid any errors.
SMALL COMPANY AUDIT EXEMPTION
ACRA does not require small private companies to submit audited financial statements if they meet two of the three following criteria:
- Total annual revenue from the past fiscal year is less than S$10 million
- Total assets from the past fiscal year are less than S$10 million
- Total employees in the past fiscal year are fewer than 50
Annual General Meeting (AGM)
An AGM is a mandatory annual meeting where the company presents its financial statements before the shareholders to give a clear report on the financial position of the business.
Below are the key Annual General Meeting rules that apply to private limited companies:
- Companies must hold the first AGM within the first 18 months after incorporation
- No more than 15 months can elapse between AGMs
- All accounts must be updated no more than 6 months before an AGM
- AGMs can be held outside of Singapore
Note: Singapore Company Law allows private limited companies to forgo an AGM if all members of the company agree to a resolution to dispense the meeting. The company can then submit its Annual Return without conducting an AGM.
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Tax Return Filing
IRAS is the main government agency that levies and collects taxes in Singapore. A Singapore company has to file annually with IRAS the following reports:
Estimate of Company’s Income
IRAS requires all companies to report estimated taxable income also know as Estimated Chargeable Income (ECI) for each financial year. The company has to report the ECI within a period of 3 months from the end of the Financial Year by submitting the ECI Form.
IRAS regulation exempts companies from reporting ECI if:
- The ECI is Nil
- Annual revenue does not exceed S$1 million
Income Tax Return
After declaring the estimated income, a company must file an income tax return which provides a calculation of the actual tax that is to be paid. The deadline for filing the tax return with IRAS is either November 30 for paper filing or December 15 for e-filing.
Singapore follows the “preceding year basis” for taxation. This implies that a company has to file its tax return in the current year based on the profits of the company in the preceding year.
A dormant company that does not carry any business and has no income for the financial year can apply for a waiver of income tax return filing. If IRAS grants the waiver, the company does not have to report the estimated income or file the tax return for the financial year.
Who is Responsible for Annual Filing?
It is the duty of the Company Secretary to ensure that the company complies with the filing of various statutory reports.
The directors of the company are responsible to ensure that the financial statements of the company are prepared accurately and comply with accounting standards.
Consequences in Case of Non-Compliance
Non-Compliance of Annual Return Filing with ACRA
ACRA can penalize a company for non-compliance for any of the following reasons:
- If the company does not hold its AGM in a timely manner
- If the company does not submit the Annual Return and financial statements within the given deadline.
- If the financial statements presented at the AGM are not up-to-date.
Companies face a fine of S$300 for each non-compliance. Recently, ACRA has stepped up its enforcement action for non-compliant companies.
Non-Compliance of Filing Tax Returns with IRAS
If a company does not submit the ECI within 3 months from the financial year end it will receive a Notice of Assessment (NOA) from IRAS stating an estimate of the company’s income.
On receipt of the notice, if the company disagrees with the estimated assessment, it will have to file a Notice of Objection within two months from the date of the NOA. However, if the company fails to send the notice of objection, IRAS treats it as final even if the company’s actual income on the income tax return is lower than the estimate.
Compliance Rating and Certificate
A company that complies with the annual filing requirements receives a green checkmark on ACRA’s online directory against its name. The company is then eligible for a Certificate of Compliance. If a company does not follow these requirements, the company receives a red cross mark and is not eligible for the certificate.
It is essential for entrepreneurs to follow the annual filing requirements as anyone who wishes to deal with a company can view the company’s basic information and its compliance rating on ACRA’s online directory.
Every Singapore incorporated company must ensure the timely submission of returns and forms with ACRA and IRAS. A reputable corporate services firm can help ensure that the compliance requirements of a company are met and its business is protected from any legal troubles.