When must I file my Singapore taxes?
Whether you are an individual or a corporate entity, knowing when to file your taxes will be essential, particularly if you want to avoid the pain of paying penalties or the horror of dealing with a court summons. Rikvin, a professional firm specializing in tax and accounting services, provides a comprehensive guide on when and how individuals and corporate entities should compute and file their taxes.
Personal Tax – What Do I Need to Know?
Singapore’s Personal Tax system is a progressive tax system where the tax percentage charge depends on an individual’s taxable income. To put it simply, individuals with higher annual chargeable incomes will pay a higher percentage of tax. If you fulfil any of the criteria below, you would be considered as a tax resident by the Inland Revenue Authority of Singapore (“IRAS”):-
- A Singapore citizen who normally resides in Singapore except for temporary absences;
- Permanent Resident who has established a permanent home in Singapore; or
- Foreigner who has stayed or worked in Singapore for 183 days or more in the prior year
However, there are exceptions. For example, if one is a Singapore Citizen or Permanent Resident who has worked and lived overseas for a period of time, your overseas income will not need to be declared and will not be taxable, even if this income is credited to a Singapore bank account. To understand more about how you may qualify for this exemption, do seek the advice of a professional tax agent, who would be able to advise you accordingly.
How Do I Compute my Personal Tax?
How much tax one has to pay is contingent on your total chargeable income, which is your annual chargeable income before CPF deductions. Thereafter, if you qualify for tax reliefs, deduct the tax reliefs from the annual chargeable income, before computing your tax based on the corresponding tax rate that you have to pay.
At the Budget 2015, Singapore’s Finance Minister announced that the maximum tax rate for personal income tax would be increased, from 20% to 22%. A side by side comparison of the Personal Income Tax rates is depicted below:-
(for YA2014 – YA 2016)
(for YA2017 onwards)
Based on the above changes, it is evident that the changes will affect those whose incomes exceed S$200,000 (a 1% change). For individuals at the highest tier, the increase of tax payable is approximately S$2,200.
What Kind of Tax Reliefs can I apply for?
There are various tax reliefs that can be applied for, which include, but are not limited to the following:-
- Earned Income
- Spouse / Handicapped Spouse
- Qualifying Child / Handicapped Child
- Parent / Handicapped Parent
- Employment Expenses
- Life Insurance
- Course Fees
- NSmen, NSman Wife and NSman Parent
- Foreign Maid Levy
- Supplementary Retirement Scheme
For several of these tax reliefs, there is a list of conditions to be fulfilled before one can apply for the tax relief. A summary of these conditions is provided below:-
|Automatically granted by IRAS?||Qualifying Conditions|
|Earned Income Relief||Yes|
|Spouse/Handicapped Spouse Relief||No|
|Qualifying/Handicapped Child Relief||No||The child need not be a Singapore citizen, permanent resident or staying in Singapore. The relief may be shared with your spouse based on the apportionment agreed by both parties.For qualifying child relief (QCR):|
If the child is mentally or physically handicapped, you can claim for Handicapped Child relief (HCR). You cannot claim HCR on the same child if you are claiming or have already claimed QCR in the same YA.
|Course Fees Relief||No||The seminar or conference must relate to your employment and leads to an approved academic and professional qualification.|
|Parent / Handicapped Parent Relief||No||Your own or spouse’s parents, grandparents or great grandparents and no one else is claiming this relief.The dependent must meet ALL the following conditions:|
Changes with effect from Year of Assessment 2015 New!
|Life Insurance Relief||No|
No relief will be given for insurance premiums paid on medical and investment policies, children’s life assurance policies and insurance premiums paid by a married woman on her husband’s life assurance policies.
|Foreign Maid Levy Relief||No|
The amount of relief is equal to double the annual foreign worker levy paid in respect of one foreign maid employed by you or your husband. This amount can only be deducted against your earned income e.g. income from employment.
|SRS Relief||Yes||You are entitled to a SRS tax relief in the YA following the year of contribution. The relief will be allowed automatically based on the information provided by the SRS operator.The SRS operators are:|
Once you have determined which tax reliefs you can apply for, you can apply accordingly for the relevant tax reliefs. In Singapore, the tax filing season for individuals is from March to April and it is highly recommended that individuals choose to do so via the online application.
|15 April||Personal income tax filing deadline via paper mail|
|18 April||Personal income tax filing deadline via online application (e-filing)|
Corporate Tax – What Do I Need to Know?
Singapore has adopted a one-tier corporate tax system and tax paid by a company on its chargeable income is the final tax. A company’s corporate tax is calculated based on the net income earned by companies while exercising their business activities in the period of one business year.
There are three main tax obligations that companies will have to pay attention to, as follows:-
- Filing of Estimated Chargeable Income (“ECI”)
- Filing of Goods and Services Tax (“GST”) payment
- Corporate Income Tax – Form C or Form C-S
For (A) and (B), the deadline for companies is dependent on its financial year end or accounting period, very much like the deadline for when a company’s Annual General Meeting (“AGM”) is due. For item (C), this is more similar to a Personal Income Tax and all companies will have to comply with the same due date as this is computed based on the Year of Assessment (“YA”), rather than the company’s own financial year end.
A. Filing of ECI
A company’s ECI is computed based on an estimate of the company’s taxable income (after deducting tax-allowable expenses) for a YA. All companies are required to file their ECI, even if their estimated ECI is zero.
Companies that are exempted from filing their ECI would need to fulfil the following conditions:
|Company’s Financial Year ends||Criteria for ECI waiver|
|In or before Jun 2018|
|In or after Jul 2018|
In addition, certain entities such as real estate investment trusts (“REITs”), foreign universities, designated unit trusts etc. are not required to file ECI.
All companies are required to file their ECI within three months from their financial year end. [For more information, read Rikvin’s guide on ECI here.]
B. Filing of GST Payment
GST is basically Singapore’s version of VAT in the European countries. Unlike (A), only companies that are GST-registered businesses will need to file their GST payments. [To understand what it means to be a GST-registered business, read Rikvin’s comprehensive guide here]
While (A) is due only once a year, after a company’s financial year end, GST filing is due every quarter, as shown in the table below:-
Without GIRO planWith GIRO plan for GST payment
|Without GIRO plan||With GIRO plan for GST payment|
|GST accounting period||Filing and payment due date||Filing due date||Payment deduction date|
|Jan – Mar||30 Apr||30 Apr||15 May|
|Apr – Jun||31 Jul||31 Jul||15 Aug|
|Jul – Sept||31 Oct||31 Oct||15 Nov|
|Oct – Dec||31 Jan||31 Jan||15 Feb|
To help companies avoid penalties and the consequences of missing their GST filing deadlines, IRAS has allowed companies to opt for a GIRO plan, where GST payments will be automatically deducted. However, companies should ensure that their accounts have sufficient payment before the payment deduction date.
It is possible to apply for an extension of time, however, this request must be submitted to ACRA before the filing due date; and is subject to IRAS’ discretion. IRAS will typically review the reason and supporting documentation. The maximum extension allowed for is only two weeks.
C. Corporate Income Tax – Form C or Form C-S
Depending on your company type, your company will need to submit either a Form C or Form C-S to IRAS. The table below provides a quick overview of the differences between both Forms.
|Form C-S||Form C|
|Qualifying small companies||All other companies|
|Will have to declare essential tax and financial information||Will have to declare essential tax and financial information and attach the following:-|
|E-filing option available||E-filing option not available|
|Paper submission by 30 November|
E-filing submission by 15 December
|Paper submission by 30 November|
Ideally, qualifying companies would opt for the e-filing option for the Form C-S, which has built-in formulas to assist companies in avoiding calculation errors. In addition, companies that e-file would have a longer deadline within which to comply.
Need help filing your taxes online?
Let us do the work for you. With Rikvin, personal and corporate tax filing is done right and well before the deadline.