Tips to Know Before Starting Your Corporate Tax Filing in Singapore

In 2024, 262,000 companies are expected to file corporate income tax (CIT) returns by the 30 November deadline. According to the Inland Revenue Authority of Singapore (IRAS), more than 4,700 companies were charged for failing to file or for late filing of their CIT the year prior despite repeated reminders. The total amount of penalties incurred reached a staggering excess of S$4.9 million.

With this year’s corporate income tax returns just round the corner, it is essential that businesses ensure they comply with the deadline on time. This blog aims to provide you with some useful tips to manage your YA 2024 corporate tax filing obligations effortlessly.

Corporate Tax Filing Tips for Singapore Companies

Understand Corporate Tax Filing Exemptions

One common misconception is that loss-making or dormant companies need not file corporate tax returns.All companies, including those that did not carry on business or had incurred losses in the financial year, must file their CIT returns for the year unless they have received a waiver exempting them from filing the return. Companies with no business activities or have no intention to continue business can apply for a waiver to file the CIT returns.

Claim Capital Allowances for Eligible Fixed Assets

Companies can claim capital allowances for qualifying fixed assets purchased and used for trade or business, such as expenditure incurred on plant and machinery. There are several ways to calculate capital allowances, such as writing off low-value assets not exceeding S$30,000 per YA.

Alternatively, you can also claim capital allowances over 2 years, 3 years, or the expected working life for the assets.

Ensure Sufficient Preparation of Supporting Documents

IRAS mandates that companies must keep proper and adequate supporting documents or receipts to back the deduction claims of expenses. Examples include keeping detailed records of business expenses, such as including the name and details of the clients or individuals who were entertained aside from the receipts and invoices if a company has significant entertainment expenses.

Use Seamless Filing From Software (#SFFS)

Companies must also maintain proper business records and accounts and retain them for at least 5 years. IRAS encourages the adoption of #SFFS to help manage daily operations and transactions digitally while enabling Form C-S submission to IRAS directly in a few clicks during CIT filing.

#SFFS can also save up to 95% of time required to prepare and submit Form C-S to IRAS. It converts accounting data to tax data using an automatic tax conversion tool and enhances accuracy by minimising potential transposition errors by getting rid of the need for manual data entry into the myTax Portal.

IRAS provides these benefits to help companies integrate into and become more familiarised with the system:

1. An automatic extension of the CIT filing due date by 15 days to 15 December up till YA 2025 for Form C-S returns filed via #SFFS
2. Waived penalties for errors made in Form C-S because of unfamiliarity with using the software for tax returns filed through #SFFS. However, the waiver does not apply to errors made without reasonable reason through negligence or wilful intent to evade tax

Tax-Deductible Business Expenses

Companies commonly assume that all business expenses can be claimed as tax deductions. However, expenses such as private car expenditure, like petrol, parking, ERP charges and road tax are not tax-deductible even if it is used for business purposes. Companies can instead claim transport allowances provided to their employees.

Deducting Tax Allowable Expenses

Some business expenses can qualify for additional deductions. One example is cash donations to approved charities that qualify for 250% deduction while qualifying expenses incurred on the registration of intellectual property and overseas travel for trade fairs or exhibitions can receive another 100% deduction.

Claim Start-up Tax Exemption (SUTE) for New Companies

New start-up companies in Singapore are eligible for the SUTE, except:

• Companies whose principal business activity is of investment holding
• Companies that undertake property development for sale, investment, or both
Companies that are not incorporated in Singapore
• Companies that are not a tax resident of Singapore for that YA
• Companies that do not have its total share capital beneficially held directly by no more than 20 shareholders throughout the basis period for that YA

The SUTE entitles eligible companies to these benefits for the first 3 consecutive YAs:

1. A 75% exemption on the first S$100,000 of normal chargeable income, which is your taxable income after deducting allowable expenses from gross income
2. An additional 50% exemption on the next S$100,000 of normal chargeable income

Leverage the New Enterprise Innovation Scheme (EIS)

As announced in Budget 2024, the EIS is a new tax incentive scheme that takes effect from 2024 for businesses in Singapore. Companies that incur qualifying expenditure on these activities under the scheme are eligible for enhanced deductions or allowances of 300% on the first S$400,000 of qualifying expenditure:

1. Qualifying R&D performed in Singapore
2. The acquisition or licensing costs of intellectual property rights (IPs)
3. Registration costs of IPs
4. Training expenses for courses under SkillsFuture Singapore
5. Innovative projects with the six designated tertiary institutions

File the Right Income Tax Return (ITR)

Since there are 3 different types of ITRs, Form C-S/Form C-S (Lite)/Form C, companies must ensure that they are filing the correct ITR. Each ITR has its distinct eligibility criteria to help companies determine if they are the right one, and also have different requirements.

For example, companies eligible for Form C-S and C-S (Lite) need not submit their financial statements and tax computations. Completing these ITRs will help companies stay compliant and avoid penalties.

Engage a Certified Tax Agent

Companies that engage an accredited tax practitioner or advisor such as InCorp to file or review their ITR provides IRAS with the assurance on the accuracy of the ITR filed. These professionals are also better equipped with the skills and knowledge to help you manage complicated tax regulations to ensure compliance with filing requirements.

Let InCorp Assist With Your Corporate Tax Filing in Singapore Now

We are a leading corporate services provider in Singapore, with a team of experienced and certified tax agents well-versed in the latest tax laws and regulations. Our team can assist your company with all aspects of corporate tax returns filing, from assessing eligibility for different ITRs to ensuring accurate and timely submission to IRAS before the corporate tax filing deadline.

Our services help you stay compliant with IRAS and we also offer personalised advice and solutions tailored to your company’s unique needs. With InCorp handling your corporate tax filing, you can have peace of mind knowing that your taxes are being taken care of by experts.

Be assured of seamless compliance – let InCorp handle your corporate tax filing in Singapore today. Contact us now for more information!

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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