Filing ACRA and IRAS Requirements
The Accounting Corporate Regulatory Authority (ACRA) and Inland Revenue Authority of Singapore (IRAS) are the two government agencies that local companies are required to file to. All companies in Singapore have to file their annual and tax returns to stay compliant.
As a business owner, you must know how to file these documents annually. Submitting them on time helps you save on fines and penalties that you may incur from late submissions. We’ll go through all you’ll need to know about filing both ACRA and IRAS requirements in the sections below.
Compliance with ACRA
ACRA acts as the national regulator of business entities in Singapore. To be compliant with ACRA, there are two things that you need to do:
- Submit an Annual Return
- Hold an Annual General Meeting (AGM)
Annual Return
An Annual Return is an electronic document that all companies have to submit to ACRA annually. This document is to provide the necessary information to your stakeholders so that to guide their decisions in the following financial year.
It includes 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 has to be signed by either the director of the company or a company secretary. The Annual Return must be filed within 7 months from the financial year-end, and 30 days after your AGM has been held.
What documentation do I need?
Unless you are a small company, your company must attach its audited financial statements with the Annual Return. Your company is considered a small company if it meets the following requirements:
- Total 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 number of employees in the past fiscal year is fewer than 50
Your financial statements should be filed in XBRL format.
Besides audited statements, your company will also be required to submit financial statements, with the exception being dormant relevant companies. These financial statements must be prepared according to the Financial Reporting Standard of Singapore (FRSS). They include:
- Profits and loss account
- Balance sheet
- Cash flow statement
- Statement of changes in equity
- Notes to the financial statements
Your company is exempt from lodging financial statements with ACRA only if it is an Exempt Private Company and solvent.
Annual General Meeting (AGM)
The AGM is a compulsory annual meeting where the company presents its financial statements to its shareholders. They are required to give a clear report on the company’s financial position.
Regarding the AGM, several rules apply:
- Your company’s first AGM should be held 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
You are allowed to forgo an AGM if all members of the company agree to a resolution to dispense the meeting. However, the company will still be required to submit its Annual Return.
A private company also does not need to hold a physical AGM if all the members pass the AGM resolutions. These written resolutions can be conducted via either softcopy or hardcopy, as agreed by all members.
Filing tax returns with IRAS
The IRAS is the main government agency in Singapore responsible for collecting taxes. All companies in Singapore will have to file their Estimated Chargeable Income (ECI) and income tax return with them.
Estimated Chargeable Income (ECI)
An ECI is otherwise known as estimated taxable income. Companies will have to report their ECI within 3 months from the end of the financial year by submitting the ECI form.
You are exempted from fling your ECI if your ECI is Nil, or if your annual revenue does not exceed S$1 million.
Income Tax Return
After declaring your ECI, companies must then file an income tax return which calculates the actual tax to be paid. If you are filing this by paper, the deadline is November 30th. If you are doing it via e-filing, the deadline is December 15th.
Singapore companies use the preceding year basis for taxation, which means that if your company will be taxed S$500,000 in 2021 if that was the amount earned in the financial year of 2021.
There are two types of income tax forms – Form C-S and Form C. Both of them are declaration forms that report actual income for the financial year. You will also need to file the form even if your company is making a loss. Do ensure that your forms are completed correctly and give a full and true account of your company’s income.
What happens if I am not compliant?
From 30 April 2021, companies that do not file their annual returns within 3 months from the filing deadline with ACRA will receive a $300 penalty. If the company does not file for more than 3 months, it will receive a $600 penalty.
For IRAS, an estimated Notice of Assessment (NOA) will be issued if you fail to submit annual tax returns on time. This estimated tax may be higher than your actual income tax, and you are required to pay within 1 month. In extreme cases, further legal action may be taken against your company if you fail to comply.
How to become a compliant company
For those of us who just aren’t good at managing administrative issues, it’s easy to get buried under this mountain of paperwork, especially during tax season. You also wouldn’t want to incur any additional penalties or get involved in legal action.
Well, that’s where Margin Wheeler comes in – our firm ensures that your meet both ACRA and IRAS compliances so that you can focus on running your business. Contact us if you are looking for help to become a compliant company, or check out some of the other services that we provide as well.
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