October: The Month To Prepare For Your EOY Tax Filing
Photo by Dimitri Karastelev on Unsplash
Another year has flown by, largely because here in Singapore we’ve all been so distracted by the various levels of Heightened Alert. In any case, we’re in October, which means it’s less than a month until Halloween if you celebrate, and it’s also just seven weeks until you need to file your corporate tax.
In Singapore, you're filing for the previous year, so you'll be preparing to file your tax pertaining to January until December 2020.
All companies need to file tax, even if they are now dormant. The only exception is if 2020 was your company’s first year of operation and you had no taxable income. Need more info? Read on for a few frequently asked questions our team gets around EOY tax filing.
I'm a new business - do I need to file tax this year?
It can get a little confusing to determine your first year of business. ACRA (the Accounting and Corporate Regulatory Authority) considers it as the year you launch the business, but IRAS (The Inland Revenue Authority of Singapore) considers it as the first year you generated revenue.
You are given one year after incorporation during which you don’t need to file tax if you have not generated any revenue. So if you incorporated in 2019 but 2020 was the first year you generated revenue, you will need to file your tax this year.
Newly-incorporated Singapore-based companies also receive the following tax exemptions for the first three years that equate to an 8.5% tax rate: 75% of the taxable income on the first $100,000 and 50% of the taxable income on the second $100,000 are exempted from tax (double check with your accountant if you fall into this category!). Taxable income above these levels will be charged at the normal corporate tax rate of 17%.
What is the deadline?
The deadline for filing is November 30, but you can request an extension to file online until December 15. It’s good to give your accountant at least six weeks to get your books in order before the deadline.
The last day for Accela Finance to take on clients for end-of-year tax filing is October 15.
Do I need an accountant or can I file it on my own?
You can attempt to do your corporate tax filing yourself, but if you need advice on deductible expenses, exemptions and rebates, you will need to get in touch with a professional accountant.
If you're an Accela Finance client, you’ll need to provide us access to your Corp Pass account and your financial statements. We can also keep your receipts and supporting documents in a secure place – these should be kept for five years.
This is the last deadline for the year, and it has a way of sneaking up on businesses with the rush of everything else that happens in the last quarter. But by planning ahead, and making sure you or your accountant has everything you need by mid-October, you won’t need to lose any sleep over it.
If you’re looking for an accountant, or need help filing your corporate tax, get in touch with the team at Accela Finance for a friendly chat: [email protected].