IRAS’s & ACRA’s Regulation Compliance in Singapore

The Internal Revenue Authority of Singapore (IRAS) is, in a nutshell, Singapore’s taxman. Although the easy assumption to make is that all your company has to do is pay its taxes, there are several finer points for your company to comply with. The Accounting and Corporate Regulatory Authority (ACRA) also stipulates certain requirements you should be mindful of when running your company.

This article seeks to be a quick primer on the topic of tax and accounting compliance for companies in Singapore.

We shall discuss the following in turn:

  • Keeping proper and accurate accounting records
  • Preparing financial statements
  • Auditing financial statements
  • Filing Estimate of Chargeable Income (ECI)
  • Filing tax returns
  • Filing GST returns
  • Penalties for non-compliance – IRAS
  • Penalties for non-compliance – ACRA

Keeping Proper and Accurate Accounting Records

If you don’t count your money, you will not be able to account for it, much less pay IRAS your company’s taxes accurately each year.

IRAS mandates that companies must maintain proper records and accounts of all business transactions and retain the source (or original) documents, accounting records, bank statements, etc. These records must be kept for at least 5 years.

IRAS has published a handy guide on which records you should keep on their website. We reproduce it here for your ease of reference:

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If your company is involved in only a few financial transactions each month, we are of the opinion that you may opt to perform your bookkeeping monthly or quarterly.

However, if your company performs many transactions a month, we strongly recommend that you perform your bookkeeping functions consistently, and even daily if necessary.

Accurate bookkeeping makes it easy for you to deduct expenses from income accurately and in the right manner when it’s time to prepare your financial statements and file your tax returns.

Preparing Financial Statements

Using the Singapore Financial Reporting Standards (SFRS), your company should prepare the following financial statements:

  • Comprehensive Income/Profit-and-Loss
  • Financial Position (Balance Sheet)
  • Cash Flow
  • Equity Changes

Your company is under an obligation to prepare and file these financial statements after the end of each financial year. The filing must be done with IRAS as part of your company’s Form C-S and with the Accounting and Corporate Regulatory Authority (ACRA) as part of your company’s annual returns.

Auditing Financial Statements

Don’t worry, you don’t necessarily need to spend even more money to audit your financial statements. It is only if your company falls within any 2 of the following 3 situations that you must make sure that your financial statements are audited:

  • Total yearly revenue of S$10 million or greater
  • Total assets of S$10 million or greater
  • 50 or more employees

The audited financial statements must be filed with ACRA annually.

Filing Estimate of Chargeable Income (ECI)

Regardless of whether your company made any income or not, you must declare the company’s revenue and the Estimated Chargeable Income (ECI) by filing an ECI form with IRAS. This must be done within 3 months of the end of each financial year.

Filing Tax Returns

By the 30th November of each year, or the 15th of December of each year if you are filing your returns electronically using e-filing, your company must file its tax returns to IRAS. This comes in Form C or Form C-S.

Filing GST Returns

As long as your company is GST-registered, you must file GST returns to IRAS every quarter. This applies regardless of whether or not your company engaged in any transactions for any quarter.

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