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What does ECI mean?
ECI, also known as Estimated Chargeable Income, is an estimate of a company’s chargeable income for a Year of Assessment (YA). One of the annual corporate compliance requirements in Singapore is the filing of ECI with IRAS, Singapore’s tax authority, for the YA within 3 months after the end of the financial year. However, with effect from YA 2013, a new administrative concession applies for companies with a financial year ending October 2012 or after.
The ECI statement must include your company’s revenue, excluding items such as gain on disposal of fixed assets. Hence, if your company is an investment holding company, the principal source of income is the investment income.
Your firm is required to disclose revenue data in your Income Tax Return (Form C). From 1 Jan 2009, companies will also be required to declare the revenue amount in the ECI Form. Information on the revenue of businesses is one of the key economic data used for policy-making, as well as for the regular assessment of performance and development of industries and businesses.
Where audited accounts are not available, you may refer to your company’s management accounts for the purpose of declaring the revenue amount. Should the revenue amount based on audited accounts be different from that declared in the ECI Form, and there is no change in your ECI, you are not required to revise the revenue figure.
Who needs to file the ECI?
Your company has to furnish its Estimated Chargeable Income (ECI) within 3 months after the end of its financial year end. If your company estimates its chargeable income as zero, you still must file a “NIL” ECI return.
However, with effect from YA 2013, a new administrative concession applies for companies with a financial year ending October 2012 or after.
Under this concession, firms which do not earn more than S$1 million for the financial year and whose ECI is NIL will not be required to file ECI for a particular year.
|Financial year-end||Due date for filing ECI||Period covered in the accounts||Year of Assessment (YA)||Due date for filing ECI for that particular YA|
|31 Dec||31 Mar of the following year||1 Jan 2012 to 31 Dec 2012||2013||31 Mar 2013|
|31 Mar||30 Jun of the following year||1 Apr 2012 to 31 Mar 2013||2013||30 Jun 2013|
Advantage of filing ECI early
IRAS provides flexible payment options for companies that submit their ECI statements early. They may pay their tax in installments. The earlier the ECI statement is submitted, the higher the number of payment installments bestowed to your firm. For example, companies that e-file their ECI by the 26th of the month immediately after the financial year-end may pay their taxes in 10 installments. If the ECI is filed on the 26th of the second month after the financial year-end, there are 8 payment installments awarded to that company, and 6 installments for companies filing their ECI on the 26th of the third month.
Failure to comply with filing of ECI
After the three-month grace period has elapsed and the company has failed to comply with the ECI requirement, IRAS shall issue a Notice of Assessment (NOA) based on its estimation of that particular company’s income. The company then has one month from the date of IRAS’ NOA to submit its written objection should it not agree with IRAS’ estimated assessment. Otherwise, the NOA is recognized as final and the same holds true despite differences on the information of revenues declared on it is Form C and the accounts submitted subsequently.
At Rikvin, our team of accounts professionals is ready to help you with your ECI submission. Our ECI Submission Service includes but is not limited to the following accounting functions:
- Obtain an e-Access code to file ECI online
- Preparation of ECI
- Advice on determination of Financial Year End