Singapore Company Statuory Compliance - Part II

Both local and foreign companies (an incorporated subsidiary or registered branch) in Singapore are subject to annual filing requirements from Inland Revenue Authority of Singapore (IRAS) and Accounting and Corporate Regulatory Authority of Singapore (ACRA).

This is Part II of the statutory compliance guide for Singapore companies and is focused on annual filing requirements. Part I of this guide provided an overview of the general statutory requirements for a Singapore company.

To learn about how to setup a private limited company, see Singapore Company Registration guide.

The following annual statutory compliance requirements apply to Singapore private limited companies.

ECI Filing

Companies are required to declare the revenue amount and estimated chargeable income by filing ECI form with Tax Authority within 3 months of the end of accounting period for the company.

The revenue to be declared in the ECI form refers to a company’s main source of income, and excludes items like capital gains on disposal of fixed assets. Even if the company estimates its chargeable income as zero, it still has to file a "Nil" ECI.

Preparation of Financial Accounts

Singapore has adapted a Financial Reporting Standards (FRS) framework with effect from January 1, 2003 that is inline with standards issued by International Accounting Standards Board (IASB). Annual financial statements must be prepared in accordance with FRS and must consist of Profit and Loss Account (Statement of Comprehensive Income), Balance Sheet (Statement of Financial Position), Cash Flow Statement (Statement of Cash Flows), and Equity Statement.

Starting November 1, 2007, Singapore companies must file their financial reports with company registrar in XBRL format. XBRL format does not change any accounting standards. XBRL is simply a language for transmitting information. It must accurately reflect data reported under the applicable accounting standards, it does not change them. XBRL format has already been adopted as the standard for financial statements in countries such as US, Australia, Japan and the UK. To learn more, see XBRL Services.

Audit of Financial Accounts

If your company falls under the criteria that requires you to file audited accounts, you must:

• Appoint an auditor within 3 months of the date of incorporation
• Have your accounts audited on an annual basis

Annual General Meeting

Every company must hold an Annual General Meeting (AGM) once every calendar year. The following general rules apply to AGMs:

• The first AGM must be held within 18 months of its incorporation;
• No more than 15 months may elapse between subsequent AGMs;
• Accounts presented at the AGM shall be made up to a date not more than 6 months before the AGM;
• Private companies are allowed to dispense with AGMs if at a general meeting of the company a resolution to that effect is passed by all members with voting rights.

Annual Return Filing

Every company must lodge an Annual Return (AR) with ACRA within 1 month of its AGM. Particulars of the company officers, registered address, and auditors (if applicable) must be included in the AR. The attachment of company’s accounts is governed by the rules:

• Dormant companies are not required to attach accounts with their annual return;
• Exempt private companies (EPC) (i.e. no corporate shareholders and total shareholders < 20) with turnover of less than S$5 million for the accounting year can file unaudited accounts;
• Small EPCs who are solvent need not attach its accounts;
• All other companies are required to attach audited accounts

Income Tax Return Filing

The Singapore income tax system is annual in its structure and organization. The statutory tax year in which income tax is calculated and charged is commonly known as the Year of Assessment. Singapore adopts the preceding year basis for taxation. In other words, the profits of the accounting year ending in the preceding year will form the basis for assessment for the current Year of Assessment.

The statutory deadline for filing corporate income tax return is 31 October of Year of Assessment. As an example, if the accounting period of your company is April 1, 2008 – March 31, 2009, the income tax return filing deadline for the company will be 31 October, 2010.

On a final note

Directors of the company are legally responsible and accountable for complying with the requirements of the Singapore Companies Act. Failure to comply with the statutor compliance requirements is an offence and may result in fines or prosecution. It is a good idea to engage the services of a professional services firm to ensure ongoing compliance with statutory rules and regulations of Singapore Companies Act.