Singapore: Tax & Auditing Requirements
Singaporean companies must file financial statements with the ACRA every year.
Singapore’s full corporate tax rate is a flat rate of 17% regardless of whether the company is a local or foreign company. However, there are tax rebates lowering the effective tax rate for new or small companies.There is no tax on capital gains in Singapore. See this site for the authoritative official guide for Singaporean corporate taxes.
All companies need to submit two corporate income tax forms to Inland Revenue Authority of Singapore every year:
- Estimated Chargeable Income (ECI) form within three months from the company’s financial year end.
- Corporate Income Tax Returns (Form C-S or Form C) by 30 Nov of each year.
Example of Effective Tax Rates
New startups can take advantage of tax rebate programs and obtain lower effective tax rates. As an example of lower effective tax rates, effective tax rates in Singapore according to the Start-up tax Exemption Law (SUTE) as of 2017 is as follows:
Effective Corporate Tax Rate for New Start-up Companies in FY2017 (source)
|CHARGEABLE INCOME ($)
||ESTIMATED TAX (S$)
||EFFECTIVE TAX RATE
Taxes Specific to Virtual Currencies
- Businesses that buy and sell virtual currencies in the ordinary course of their business will be taxed on the profit derived from trading in the virtual currency. Profits derived by businesses which mine and trade virtual currencies in exchange for money are also subject to tax.
- Businesses that buy virtual currencies for long-term investment purposes may enjoy a capital gain from the disposal of these virtual currencies. However, as there are no capital gains taxes in Singapore, such gains are not subject to tax.
- This source determines whether the virtual currency activity is trading or capital gains and thus whether they are taxable.
Singapore exempts “small companies” that must be incorporated in Singapore from tax auditing. See details here. It is mandatory for all other companies in Singapore (“large companies” to hire an auditor (source).
As per the above source, small companies are defined as follows:
- it is a private company in the financial year in question; and
- it meets at least 2 of 3 following criteria for immediate past two consecutive financial years:
- total annual revenue ≤ $10m;
- total assets ≤ $10m;
- no. of employees ≤ 50.
Or, for a company which is part of a group:
- the company must qualify as a small company; and
- entire group must be a “small group”, that is, the group must meet at least 2 of the 3 quantitative criteria on a consolidated basis for the immediate past two consecutive financial years.
Where a company has qualified as a small company, it continues to be a small company for subsequent financial years until it is disqualified. A small company is disqualified if:
- it ceases to be a private company at any time during a financial year; or
- it does not meet at least 2 of the 3 the quantitative criteria for the immediate past two consecutive financial years.
Large companies (who do not qualify or have been disqualified from the ‘small companies’ designation) need to hire an auditor for their accounts.