Basic Guide to Corporate Income Tax for Companies

New Company Start-Up Kit

Access the New Company Start-Up Kit, an interactive e-learning guide, to learn more about your corporate tax filing obligations. This Kit will provide you with the information you need for your first tax filing process - from incorporation to the filing of the first Corporate Tax Return.

Find out more about the New Company Start-Up Kit.

e-Learning Videos on the Basics of Corporate Income Tax

This video provides you with information to help you better understand the Corporate Tax Filing Obligations of your company.

Note: IRAS is in the process of developing a series of bite-sized e-Learning videos with similar content as our seminars.The remaining videos will be rolled out progressively.

Corporate Income Tax Filing Obligations that are Applicable to Newly Incorporated Companies

All companies are required to submit two Corporate Income Tax Returns to IRAS every year:

Filing of Estimated Chargeable Income (ECI)

New companies incorporated in 2018 are required to file the ECI within three months from the company's first financial year end.

If your company is incorporated in 2018 and closes its first set of accounts in 2018, no ECI filing notification will be sent to you in 2018 as most companies do not close their first set of accounts in the year of incorporation. However, you are still required to file the ECI within three months from your company's first financial year end, unless the company qualifies for the administrative concession and does not need to file the ECI.

As most companies have their financial year end on 31 Dec, a new company is required to inform IRAS if its financial year end is not 31 Dec. For details, please refer to Updating Company Particulars.

Otherwise, you will receive the ECI notification from IRAS in Dec, starting from the year after the year of incorporation. If your company is incorporated in 2018 and closes its first set of accounts in Dec 2019, you will receive a ECI notification from IRAS in Dec 2019 reminding you to e-File your ECI by Mar 2020.

Example

Note

As the company's first set of accounts covers a period of more than 12 months from the date of incorporation, its profit/losses must be attributed and declared under two Years of Assessment (YAs) as follows:

Time apportionment basis may be used if the company is not able to directly identify income and expenses to the two periods.

Find out more about Basis Period and Year of Assessment.

Companies That Do Not Need to Submit ECI

To reduce the compliance cost on businesses, IRAS has increased the annual revenue threshold for ECI waiver from $1 million to $5 million. Your company does not need to file the ECI for that particular YA if it meets the following criteria:

1. Annual revenue is not more than $5 million^# for the financial year; and
2. ECI^{^} is NIL for the YA.

^# For financial year ending in or before Jun 2017, the revenue threshold to qualify for the ECI waiver is $1 million, i.e. the company’s annual revenue is not more than $1 million for the financial year.

^{^} The ECI should be the amount before deducting the exempt amount under the partial tax exemption scheme or the tax exemption scheme for new start-up companies.

There is no need to inform IRAS if the company meets the conditions and does not need to file its ECI.

For details, please refer to the FAQs section of Companies That Do Not Need to Submit Estimated Chargeable Income (ECI).

Filing of Form C-S

Using Accounting Software to Prepare and File Form C-S Seamlessly

IRAS and the Accounting and Corporate Regulatory Authority (ACRA) have co-created a digital solution that allows companies to automate the preparation and filing of Form C-S and Annual Return to IRAS and ACRA respectively via accounting software. The digital solution leverages on Application Programming Interface (API) to simplify the tax filing process for companies and reduces their risk of making errors.

Find out more about the digital solution.

Getting the Form C-S/ C

New companies^* will start to receive the Form C-S/ C e-Filing notification letter only two years after their year of incorporation, as most do not close their first set of financial statements in the year of incorporation. For example, a company incorporated in 2019 will receive its first e-Filing notification letter for YA 2021 in May 2021.

If your company closed its first set of financial statements in the year of incorporation and has commenced business or was in receipt of any income, please e-File your company's Income Tax Return for the YA immediately following the year of incorporation via the File Form C-S/ C e-Service. For example, if your company was incorporated in 2019 and closed its accounts in 2019, please e-File your company’s Income Tax Return (Form C-S/ C) for YA 2020 if you have commenced business or received any income in 2019. The Form C-S/ C e-Filing service for a given YA will be made available in Jun of that year. Hence, you may e-File the company's YA 2020 Form C-S/ C starting from Jun 2020 (after the e-Filing service is made available) to 15 Dec 2020 (the e-Filing due date).

From YA 2020, companies that qualify to file Form C-S and have an annual revenue of $200,000 or below have the option to file Form C-S (Lite), a simplified version of Form C-S.

Find out whether you qualify to file the simplified Form C [Form C-S/ Form C-S (Lite)] here.

^* Please note that this is only applicable for newly incorporated companies. Singapore branches of foreign companies will be issued a return after the first year of business.

e-Filing your Company's First Income Tax Return (Form C-S/ C)

To e-File the Form C-S/ C at mytax.iras.gov.sg, please ensure that the company has authorised its staff or a third party (e.g., the tax agent) in Corppass. Please have the following information on hand:

For assistance on Corppass setup, please refer to Step-by-Step Guides.

For companies that are required to e-File their first Corporate Income Tax Return (Form C-S/ C), please refer to this step-by-step guide (PDF, 2.65MB).

Attribution of Profits/Losses for New Companies

Some new companies operate more than 12 months before closing their first set of accounts. When this happens, the first set of accounts covers more than 12 months.

Generally, the basis period cannot exceed 12 months, so the profits or losses must be apportioned and attributed to two different YAs.

The company should directly identify the income earned and expenses incurred for each of the two YAs, based on the actual dates the income was earned and the expenses were incurred. If this cannot be done, time apportionment basis can be applied (i.e. apportion based on number of days in the corresponding YAs).

Example:

Expenses Incurred before Commencement of Business

Generally, expenses incurred before a business starts its operations are not tax-deductible as these are incurred for the purpose of setting up the operations and not 'wholly and exclusively' for the production of income.

To assist business in enterprise development, revenue expenses incurred one year prior to the deemed date of commencement of business will be deductible for tax purposes.

For more details on the deductibility of expenses incurred before commencement of business and how to determine the actual date of commencement of business, please refer to the Tax Treatment of Business Expenses, or watch this video on the Tax Deductibility of Pre-commencement Expenses (4m 3s).

e-Learning Videos/Webinars/Seminars on Corporate Tax

Company representatives who are responsible for the preparation and filing of the Income Tax Return (Form C-S/ C) and other corporate tax matters are encouraged to watch the e-Learning videos or sign up for a free Corporate Tax webinar/ seminar conducted by IRAS. Subscribe to our e-Alerts to receive updates on IRAS Event/ Seminars.

For More Information, you may refer to e-Learning Videos/ Webinars/ Seminars on Corporate Tax.

FAQs