The Financial Year-end Accounting Checklist for Companies in SingaporeDownload Now: FREE GST 2023 GuidebookDownload Now: FREE Employment Pass ChecklistDownload Now: Free Incorporation Checklist
It’s that time of the year again that most business owners dread because it means only one thing: time to do the annual tax filings for your company.
While this is often an overwhelming and stressful period, it doesn’t have to be that way. We created this short guide to help you bring some order to the chaos and make your annual business filings as stress-free as possible.
In this guide, we’ll discuss what the filing requirements are, which financial statements you need to prepare, what the deadlines are, and more.
Before You Begin
You can’t accurately do your annual tax filings without first completing some important preparatory tasks. Specifically, you need to:
Which Financial Statements Do I Need to Prepare?
Every company is required to file annual financial statements as per the Financial Reporting Standards of Singapore unless they are exempted. A financial statement consists of a few components:
- Statement of Comprehensive Income
Commonly referred to as the Income Statement or the Statement of Profit and Loss (P&L), the Statement of Comprehensive Income summarizes your company’s total revenue and expenses for the financial year. It shows you if your company was profitable last year, how much profit (or loss) it accrued, and which aspects of your business were most responsible for this profit (or loss). Comparing your Statements of Comprehensive Income across multiple years also allows you to see how each area of your business has financially changed over time.
- Statement of Financial Position
Also known as the Balance Sheet, the Statement of Financial Position lists all your company’s assets, liabilities, and stockholder equity. It’s essentially a measure of your firm’s net worth and long-term financial health.
- Statement of Cash Flow
Some entrepreneurs consider the Statement of Cash Flow to be the most important financial statement of them all. As the name suggests, this document lists your firm’s cash inflows and outflows and shows if you’re generating enough cash from business activities to fund your daily operations.
- Statement of Changes in Equity
Lastly, the Statement of Changes in Equity informs you about changes in the beginning and ending balances of your company’s equity during the financial year. Typically, the calculation for this statement is as follows:
Equity at the start of the financial year + Net income (from P&L) – Dividends +/- Other changes = Equity at the end of the financial year
What Are the Filing Requirements?
Singaporean law requires companies to declare how much revenue they earned each year and to file their annual tax returns. This is to be electronically filed within three months of the Financial Year End (FYE) through MyTax Portal to IRAS.
Specifically, you have to file the following:
- Estimated Chargeable Income (ECI) within 3 months of the FYE
- Corporate Income Tax Returns through Form C in November of the Year of Assessment (YA). Companies with smaller scale operations with annual revenue of $200,000 or below may opt to file Form C-S Lite instead.
- A dormant company, which is one that neither conducts any business nor has any income for the YA, may submit the Form C-S/C for Dormant Company instead of the full Income Tax Return.
Do My Financial Statements Have to Be Audited?
Your company is required to have its financial statements audited if it meets any two of the following conditions:
- Your total annual revenue exceeds S$10 million
- Your total assets are greater than S$10 million
- Your company has more than 50 employees
Financial statements give the company’s management and all relevant stakeholders important information about the company’s financial position. This also gives shareholders a clear view of whether the company is making a profit or a loss and the ability to make informed decisions about the company’s future by analysing past performance. Without financial statements, it’s more difficult to get a loan or attract outside investors.
What Do I Need to Know About Taxes and Filing Deadlines?
All companies operating in Singapore must file their annual tax returns with the Inland Revenue Authority of Singapore (IRAS) by 30 November for paper filings and 15 December for electronic filings (e-filing). The company’s directors are responsible for complying with the annual tax filing requirements. Failure to adhere to the statutory compliance requirements is a criminal offence that may result in fines or persecution.
All companies operating in Singapore are required to file their Estimated Chargeable Income (ECI) within 3 months of the end of the company’s FYE. If the company estimates its chargeable income to be zero, it must file a “Nil” ECI.
Following this, companies must hold their Annual General Meeting (AGM) within 6 months of the FYE. Companies also have to file their Annual Returns (AR) with ACRA within one month of their AGM.
Lastly, the deadline for filing your Corporate Income Tax Return (Form C-S/ Form C-S (Lite)/ Form C) for the Year of Assessment (YA) 2021 is 30th November. Electronic filing of Form C-S/ Form C-S (Lite)/ Form C is compulsory for all companies.
Sprout with Us!
The best way to make your year-end accounting and business filing tasks as easy as possible is not to wait until the end of the year to do everything all at once. Instead, get ahead of the curve by making accounting and bookkeeping a daily habit.
Need some extra help staying on top of deadlines? Sprout offers professional accounting and bookkeeping packages at rates you like. We want you to focus on what you do best while we do the rest. Feel free to contact us with any queries, we’ll respond within 24 hours.