Tax Filing Requirements for a Dormant Company in Singapore

Singapore’s dynamic business environment is home to a diverse range of companies, each with its own distinct traits. Among them are dormant companies – entities that have temporarily paused their business activities but remain prepared to resume operations when needed. These companies, though currently inactive, possess untapped potential and serve as quiet contenders for future growth.

However, the tax filing requirements for such companies can be tricky for beginners to navigate. In this blog, we share key details about the types of tax returns that need to be filed, and how our team can help!

Related Read: Engage Corporate Tax Filing Experts

What Qualifies as a Dormant Company?

How do regulatory authorities define dormant companies? Interestingly, the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS) each have their own definitions of what qualifies as a dormant company, based on distinct criteria. To better understand these differences, let us explore how both ACRA and IRAS approach the concept.

ACRA Dormant Company Definition

According to ACRA, a company can be considered dormant in Singapore only when there is no accounting transaction for the financial year. However, under the Singapore Companies Act, there are some exceptions for activities if they relate only to the maintenance of keeping the company compliant with ACRA and IRAS.

Here are transactions that will not affect the dormant state of a company in Singapore:

• Appointing a company secretary
• Appointing auditors
• Maintaining a registered office
• Keeping of registers and books
• Payment of any fee or charge payable under written law
• Payment of any composition amount
• Payment or receipt of nominal sum not exceeding S$5,000

IRAS Dormant Company Definition

According to IRAS, a dormant company does not carry on business and generates no income for the entire basis period. For example, if a company fulfils these 2 conditions for the entire basis period ending in year 2024, it is treated as a dormant company for the Year of Assessment (YA) 2025.

What Do Dormant Companies Need to File?

A dormant company must file its corporate income tax return (Form C-S/Form C-S (Lite)/Form C by the 30 November deadline every year unless it has been given a filing waiver that exempts it from filing.

Filing Form C-S/ Form C-S (Lite)/ Form C for Dormant Companies

How to File Form C-S/ Form C-S (Lite)/ Form C for Dormant Companies

You can file Form C-S/Form C-S (Lite)/Form C for your dormant company using the File Form for Dormant Company digital service at mytax.iras.gov.sg. You need not submit your dormant company’s financial statements to IRAS.

Step 1: Before Filing

• Make sure that you are authorised by your company as an “Approver” for Corporate Tax (Filing and Applications) in Corppass
• Ready your Singpass and company’s Unique Identity Number (UEN) or Entity ID

Step 2: File Form C-S/Form C-S (Lite)/Form C

• Proceed to file Form for Dormant Company via mytax.iras.gov.sg and remember to set aside at least 5 minutes to finish filing the return

Note that the system will prompt you to respond within 2 minutes if you are inactive for more than 15 minutes. You will be automatically logged out if there is no further activity for those 2 minutes.

After successfully filing the Form for Dormant Company, you will receive an instant acknowledgment of receipt.

Applying for a Waiver to File Form C-S/ Form C-S (Lite)/ Form C

You can apply for your dormant company to be released from the requirement to file Form C-S/Form C-S (Lite)/Form C if it meets these conditions:

1. Must be dormant and must have filed its Form C-S/Form C-S (Lite)/Form C, financial statements and tax computations up to the date of business cessation
2. Must not own any investments such as real properties or shares. Even if it does, it must not derive any income from these investments
3. If it was previously Goods & Services Tax (GST)-registered, it must have been de-registered for GST purposes before this application
4. It must not intend to restart business within the next 2 years

Below are the steps to apply:

Step 1: Apply for the Waiver Digitally

You must apply for the waiver via the Apply for Waiver/File last Form C-S/C (Dormant/Striking Off) digital service at mytax.iras.gov.sg. IRAS has stopped receiving hardcopy applications since 1 Oct 2021.

Step 2: File Form C-S/ Form C-S (Lite)/ Form C

After applying for the waiver, your dormant company will have 21 days from the date of the waiver application to file its Form C-S/ Form C-S (Lite)/ Form C for advance Years of Assessment, financial statements and tax computations, where applicable, using the Form C-S/Form C-S (Lite)/Form C digital service. Otherwise, the waiver application will be rejected.

Applying for a Waiver in Writing

Certain situations where a waiver application in writing is allowed for companies where:

• The sole director is bankrupt or deceased

These companies can write to IRAS with these details:

• Company name and UEN
• Reason for requesting the waiver in writing
• Business cessation date in a DD/MM/YYYY format
• Confirmation that the company:
  • Has not been carrying on business
  • Does not have trade income
  • Has not been obtaining income from any investments owned since the cessation date
  • Does not have any intention to recommence business within the next 2 years
• Financial statements and tax computations for outstanding YAs up to the business cessation date where applicable
• Applicant’s name, designation, and identification number

Processing Time

For e-applications, you will be notified of the outcome within 2 months of receiving the application. For applications made in writing, you will be notified of the outcome within 3 months of receiving the application.

If your case is complicated, it may take a longer processing time. After it is processed, a digital copy of the letter will be available at the View Notices/Letters – Corporate Tax digital service.

Recommencing Business Operations

Once your dormant company begins to receive income and recommences business, you must notify IRAS within 1 month from the date of business recommencement or earning or receiving income. You must fill out the form for Recommencement of Business to request for Form C-S/Form C-S (Lite)/Form C.

You must prepare these information:

• Requestor’s name and company’s UEN
• Valid email address and contact number
• Business recommencement date or date of receipt of other income source(s), whichever is earlier
• If applicable, the new principal activity and effective date of change, with a copy of your business profile extracted from ACRA

Note that it is an offence if a company fails to inform IRAS when it has recommenced business or began to receive income. IRAS will take strong actions against companies and their directors who deliberately avoid or help their companies avoid filing corporate income tax returns.

Capital Allowances, Trade Losses & Donations for Dormant Companies

A dormant company cannot claim capital allowances and the deduction of expenses incurred in the basis period relating to the YA that it is dormant because it is not carrying on a trade or business during that period.

However, unused losses brought forward from a previous YA, where your company was not dormant, can be deducted against income for a subsequent YA if it meets the shareholding test.

Get Help With Tax Filing for Your Dormant Company in Singapore

Navigating tax requirements for a dormant company in Singapore can be complex, but ensuring compliance is essential to avoid penalties. Proper record-keeping and timely submissions are crucial to demonstrate compliance with statutory obligations. Engaging a professional advisor such as InCorp can simplify the process and ensure accuracy in managing your company’s obligations.

Contact us today to find out more!

About the Author

Mabel Ng

With over two decades of experience in direct and indirect taxation, Mabel has honed her expertise across a broad spectrum of environments, including the Big 4 accounting firms, mid-tier firms, and various industry roles. Her extensive background spans not only Singapore but also the wider Asia-Pacific region, reflecting a deep understanding of diverse tax landscapes and practices. She is also a member of the ISCA and FCCA, and is an SCTP Accredited Tax Practitioner.

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