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Singapore Company FAQ

Singapore Company Setup questions and answer

Singapore Company Setup questions and answer

Does Singapore company need to notify the increase in the authorized capital?

Answer: There is no longer the concept of authorized capital. A Singapore company can issue more shares if the required approval or authourization under the Act has been obtained. No, there is no need for the Singapore company to report the increase in authorized capital.

 

How do we apply for an amalgamation?

Answer: With the new Singapore Amendment Act coming into force on 30th Jan 06, the Singapore company may file an application with the Singapore company Registrar not more than 2 months before the intended amalgamation date if one is specified in the amalgamation proposal. The form Registration of Amalgamation needs to be lodged with:

  • an amalgamation proposal
  • declarations required under section 215C or 215D, a declaration by the directors with the memorandum of the amalgamating Singapore companies
  • solvency statements
  • other relevant documents

 

Singapore Company’s requirements for reducing Singapore Company’s share capital?

Answer:

Companies may refer the Singapore Companies (Amendment) Regulations 2006 which will be issued after 30th Jan 06. They may also refer to Practice Direction No 2 of 2006 which is available on ACRAs website .

 

How does Singapore company apply for a reduction of its share capital after 30th Jan 06?

Answer:

Companies will not be required to notify ACRA of the particulars of the authorised capital and the par value of the share. The share capital of the company will be referred to as the Issued Capital in BizFile records and reports. The term Paid-up Capital will be still be used to denote the amount paid on issued shares.

 

How will the information on these Singapore amalgamated companies be reflected?

Answer:

Example: Company A + Company B amalgamate to form a new company known as Company C. The business profiles of the 3 companies will reflect the following information: Profile of Company A Status will be shown as “Amalgamated” with Company B (Registration No) to form Company C (Registration No) Profile of Company B Status will be shown as “Amalgamated” with Company A (Registration No) to form Company C (Registration No) Profile of Company C Status will be shown “Live” and another statement will be displayed to the effect that the company was amalgamated from Company A (Registration No) and Company B (Registration No)

 

How do I get the Singapore Company’s capital reduced without going to Court?

Answer: 

There are several procedural steps to be taken and it is advisable that companies obtain professional advice. Directors have to provide the solvency statements (if the nature of reduction requires one) and inform the Comptroller of Income Tax and comply with the publicity requirements. Creditors may apply to court to cancel the resolution. If there is no such objection after 6 weeks but no later than 8 weeks after the resolution date, the company can lodge the relevant form with ACRA for the reduction to take effect. Companies are advised to lodge the relevant form and documents within the time stipulated in the Act ; if not, Bizfile will reject their filing for non-compliance with the Act.Companies may note that an Order of Court is no longer required with effect from 30th Jan 06. The company will need: -to pass a special resolution for capital resolution, -notify the Comptroller of Income Tax -to meet solvency requirements -to meet publicity requirements

 

Must Singapore company be solvent before commencing a share buy back?

Answer: 

Yes, the Singapore company must be solvent, which means the company must be able to pay its debts in full at the time of payment and as they fall due in the normal course of business during the period of 12 months immediately after. In addition, the value of the Singapore company’s assets must not be less than that of its liabilities (including contingent liabilities) before and after the buy-back (please see Section 76F(4) of the Companies Act.). Please seek professional advice from your Paul Hype Page & Co, ACRA Certified Public Accounting Firm.

 

 What are the ACRA Singapore Companies e-forms which are available?

Answer: 

Amendments will be made to the following e-forms on 30 Jan 2006 to remove references to the authorised capital, share premium and nominal value, if any of these terms appear therein:

  • Apply for new company name;
  • Incorporate a Private Company;
  • Incorporate a Public Company- Limited by Shares;
  • Summary of Returns of Local Company Having A Share Capital;
  • Notice by Local Company of Alteration in Share Capital Other Other Than Increase in Capital (to be renamed as Notice of Local Company Of Alteration in Share Capital)
  • Return of Allotment of Shares;
  • Notice of Redemption of Redeemable Preference Shares;
  • Notice By Local Company Of Transfer of Shares / List of Shareholders;
  • Notice of Purchase Or Acquisition Of Ordinary Shares / Stocks;
  • Notice of Purchase Or Acquisition Of Non-Redeemable Preference Shares ( to be renamed as Notice of Purchase Or Acquisition of Preference Shares);
  • Conversion of Company:
  • From an unlimited company to a company limited by shares;
  • From a public company limited by shares to a private company limited by shares

Please seek professional advice from your Paul Hype Page & Co, ACRA Certified Public Accounting Firm.

 

What are the amendments to the Singapore foreign subsidiary incorporation?

Answer:
  1. Introduction of new fees payable to the Registrar of Companies under the Second Schedule of the Companies Act by the Companies (Amendment of Second Schedule) Notification 2006;
  2. Introduction of new regulations in the Companies (Filing of Documents)
  3. Regulations and an amendment to clarify when a company is an exempt private company by the Companies (Filing of Documents) (Amendment) Regulations 2006;
  4. Introduction of the publicity requirements for proposed reduction of share capital by the Companies (Amendment) Regulations 2006;
  5. Amendments of the Eighth Schedule of the Companies Act by the Companies Act (Amendment of Eighth Schedule) Notification 2006.

Please seek professional advice from your Paul Hype Page & Co, ACRA Certified Public Accounting Firm.

 

ACRA Treatment of Singapore Company share capital on authorized capital and par value ?

Answer: 

Companies will not be required to notify ACRA of the particulars of the authorized capital and the par value of the share. The share capital of the company will be referred to as the Issued Capital in BizFile records and reports. The term Paid-up Capital will be still be used to denote the amount paid on issued shares.

 

What are the fees payable for amalgamation application?

Answer: 

The filing fee for registration of an amalgamation is $400 and another $300 is needed to be added if a new company is formed after the amalgamation.

 

What are the major amendments to the Singapore Companies Act?

Answer: 

The major amendments include : the removal of the concept of par value and authorised capital; reforms in the capital maintenance regime by introducing introduction of capital reduction procedures without the need to go to court for approval ; introduction of treasury shares which allows companies to hold the ordinary shares bought back as treasury shares and disposed off or cancel them at a later date orto transfer them to appropriate persons ; amalgamation which allows two or more companies to merge into one of the companies or form a new company.

 

What are the new changes to the share buy back regime?

Answer:

Currently, companies can only buy back shares out of their distributable profits. With effect from 30th Jan 06, they can buy back shares out of capital as well as or distributable profits.

 

What are the types of amalgamation?

Answer:

The main types of amalgamation are: Long form amalgamation – 2 or more companies amalgamate and continue as one of the existing companies or 2 or more companies amalgamate to form a new company. The amalgamated company can either have a new name, can retain the same name or adopt the name of one of the amalgamating companies. There will be five options to choose from in Bizfile. Short form amalgamation – amalgamation of holding company and subsidiaries or amalgamation of wholly owned.

 

What are treasury shares?

Answer: 

Treasury shares are ordinary shares or stocks purchased or otherwise acquired by a company in accordance with sections 76B to 76G of the Companies Act. These shares can be held by the company or may be sold, transferred or cancelled in accordance with section S76K.

 

What is meant by an amalgamation of Singapore companies?

Answer: 

An amalgamation is referring to the merger of 2 or more existing companies to form a new company or to continue as one of the existing companies.

 

What is the e-form required to be lodged with ACRA when the shares are cancelled or disposed of?

Answer: 

The e-new form to be filed online is known as Notice of cancellation or disposal which can be located under Local Company Transactions – Changes to Local Company. in BizFile.

 

What is the maximum amount Singapore company may hold after shares buy back?

Answer:  The maximum limit is 10% of total number of shares or 10% of total number of shares of each class.

 

What is the significant amendment to Singapore Companies Act with regard to amalgamation?

Answer: 

Currently, any amalgamation has to be approved by the Court under S212 of the Companies Act. The amendments to the Companies Act allow voluntary amalgamation without the need for a Court Order.

 

When do the amendments to the subsidiary legislation take place?

Answer:

The effective date, for the amendments to the subsidiary legislation, is 30th January 2006.

 

When must we notify the Comptroller of Income Tax on the intention to reduce share capital?

Answer: 

For both private and public companies, the notification must be sent within 8 days beginning with the resolution date.

 

When will the commencement date of Singapore Companies (Amendment) Act 2005 come into force?

Answer: 

The commencement date of the Amendment Act will come into force on 30th Jan 2006.

 

When will these amended and new forms be released?

Answer:

The new and amended forms will be uploaded into BizFile menu for use by 30th Jan 2006 at 0001hrs.

 

Must a Singapore company appoint a company auditor?

Answer: 

Yes. However, a company which is exempted from audit requirements under the Companies Act is exempted from the requirement to appoint an auditor of the company.

 

Employment Pass Renewal?

Answer:

Ministry of Manpower will mail an Employment Pass Renewal Form to your employer’s address two months before your EP expired. You should submit the renewal application four weeks prior to the expiration of your EP. Once approved, the new pass is ready to be picked up at the Ministry of Manpower and your employer will receive a letter of notification.

 

When Singapore company must hold its Annual General Meeting or AGM?

Answer:

Singapore company is required to hold its first AGM within 18 months from the date of incorporation. Subsequent Singapore Company’s Annual General meeting or AGM must be held every calendar year. However the interval between such AGMs must NOT be more than 15 months. Please seek professional advice from your Paul Hype Page & Co, ACRA  Certified Public Accounting Firm.

 

Is company secretary a necessary requirement for both public and private companies? What should be his/her required professional qualification?

Answer:

Section 171 of the Companies Act requires a company to appoint a company secretary. The office of secretary shall not be left vacant for more than 6 months at any one time. Private limited companies need not appoint a professionally qualified secretary. However a secretary must still be appointed. Only public companies must appoint a professionally qualified secretary. Examples of professionally qualified secretaries are lawyers, accountants and chartered secretaries.

 

If my company has one director and one shareholder left, is it compulsory to amend my M&AA?

Answer:

While the law does not mandate a company to amend its M&AA to cater to one director company, you may wish to examine your own M&AA to determine if it contains any provisions that will not be operatable if the number of directors is reduced to 1. Every company can draft its own set of M&AA and need not rely solely on the provisions in Table A of the Companies Act. In this regard, please refer to section 4 and 184 of the Companies Act.

 

Under Section 201(5) of the Companies Act, the directors’ report need to be signed by at least two directors. How do I submit the Directors’ Report if I am the sole Director of the company?

Answer:

If the company has been set up with only one director, then section 4(11) of the Companies Act is applicable, so that a requirement under the Act which is imposed on 2 directors will be satisfied by the act of the single director of the company. However, if the company has 2 directors, then the report under section 201(5) has to be signed by 2 directors, though in limited circumstances ACRA may, upon application by the sole director, accept a report signed by one director (where, for example, the other director cannot be found within Singapore).

 

What are the names that I am not allowed to use?

Answer:

You are not allowed to use words such as “Temasek”. This is a name which the Minister has directed the Registrar not to accept for registration.

 

What are the names that are prohibited to use?

Answer:

Word such as “Temasek” is prohibited to be used. This is a name which the Minister has directed the Registrar not to accept for registration. Offensive and vulgar words are also prohibited to be used for registration.

 

I am an EntrePass holder. Can I register a business/set up a company?

Answer: 

Yes

 

I have an Approval-in-Principle EntrePass. Can I register a business/set up a company?

Answer:

Yes

 

 I am an S Pass holder. Can I register a business/set up a company?

Answer:

An S Pass is not an Employment Pass. Please check the terms and conditions of your S Pass. If unsure, you should consult Ministry of Manpower.

 

I have an Approval-in-Principle S Pass. Can I register a business/set up a company/be a shareholder?

Answer:

An S Pass is not an Employment Pass. Please go through the terms and conditions of your S Pass exhaustively. If still unsure, you should consult the Ministry of Manpower.

 

Is there any stipulation of age for the person to be appointed as a Company Director?

Answer:

Yes, the company director must be at least 18 years old (with effect from 1 March 2009) at the time of appointment.

 

Is there an age limit to incorporate a company?

Answer:

Yes, the applicant must be at least 18 years old (with effect from 1 March 2009).

 

What is issued capital?

Answer:

Issued capital refers to the share capital which has been allotted to the shareholders.

 

What is paid-up capital?

Answer:

Paid-up capital refers to the issued capital that is paid up by the shareholders.

 

What is the difference between Exempt/Deemed Exempt Private Company” and “Gazetted Exempt Private Company”?

Answer:

Exempt/Deemed Exempt Private Company means any Exempt Private Company that has less than 20 members, none of them corporate. The status is not specially conferred, it is simply a status by operation of law (ie, definition in section 4). Gazetted Exempt Private Company, on the other hand, are governement-owned companies which to qualify as Exempt Private Company, must be so declared by the Minister in the Gazette, hence the name. Please refer to section 4 “exempt private company” for the definition which shows a clear demarcation between the two.

 

Do I need to file any transaction to notify ACRA if the building name in my registered entitys address has been changed?

Answer:

No. ACRA will automatically update the change once we receive the information from SingPost.

 

Who will be notified of the building name change?

Answer: 

Local directors, owners, partners and agents of foreign companies will be notified of the new building name via email or SMS, provided, they have already given us their email address/Singapore local mobile numbers before.

 

When will the information of the new building name be updated?

Answer:

The new building name will be updated monthly and within 1 week upon receiving the information from SingPost. The monthly information provided by SingPost will consist of changes from the 11th of the previous month till the 10th day of the current month. Any change of building name after the 10th of each month will be reflected in the following month’s update.

 

How do I update my paid-up capital via Bizfile?

Answer: 

You may update the paid-up capital in the Annual Return para 6 (vi) under “Calls”. Information will be updated after filing of the Annual Return. You may also update in the “Notice to Update Paid Up Capital” transaction before filing of the Annual Return.

 

How do I update my new shares?

Answer:

Please update in the ‘Return of Allotment of Shares’ transaction and complete the details under the necessary columns.

 

How can I change the address of a private limited company’s shareholder?

Answer:

Please submit the Notice by Local Company of Transfer of Shares/List of Shareholders transaction.

 

Is there a time limit for filing of ‘Transfer of Share/List of Shareholders’ with ACRA?

Answer:

No, there is no time limit for the filing as long as it is done before filing of Annual Return.

 

What is the procedure to buy or sell the shares?

Answer:

The procedure of buying and selling shares is an internal management issue as it varies from company to company. In regard to this, please seek professional advice.

 

How do I change the description of the SSIC code indicated in our ‘New Local Company Name Application’?

Answer: 

Please proceed to Local Company Transactions —->Changes to Local Company —->Change in Company Activity/SSIC Code to be reflected in Business Profile and update accordingly.

 

Can Singapore company be exempted from audit?

Answer: 

An exempt Singapore private company is exempted from audit requirements if the commencing date of its financial year is between 15 May 2003 and 31 May 2004 and its turnover for that financial year does not exceed $2.5 million. For financial years starting 1 Jun 2004, the amount of the turnover has been raised to $5 million. These exempt Singapore companies are still required to maintain proper accounting records.

 

Singapore dormant company need to submit audited accounts?

Answer:

Singapore dormant  company need not submit audited accounts, if your company does not have any accounting transactions for that financial year other than the exceptions set out in section 205B(3) of the Companies Act, eg. maintenance of registered office. If you are not sure whether there was any accounting transaction for your company, please seek professional advice from your Paul Hype Page & Co, ACRA  Certified Public Accounting Firm.

 

Must a Singapore Company renew company’s registration yearly?

Answer:

A  Singapore company’s registration need not renewed yearly as per the business entity rather is required to submit Singapore Company Annual Return on a yearly basis.

 

What must the Singapore company do after it has held its AGM?

Answer:

Singapore company must file its Annual Return with ACRA. The Annual Return must be filed within one month after the date of the AGM. Please seek professional advice from your Paul Hype Page & Co, ACRA  Certified Public Accounting Firm.

 

Does Exempt Singapore Private Company needs to attach the EPC certificate for audit exemption when filing Annual Returns?

Answer: 

With effect from 1 November 2007, we have removed the need to attach the EPC certificate or Statement by EPC for audit exemption for Exempt Private Companies. They are required to confirm on the online declarations before submitting the Annual Returns. Please seek professional advice from your Paul Hype Page & Co, ACRA  Certified Public Accounting Firm.

 

Do Dormant Singapore Companies need to attach the EPC Certificate Statement by dormant companies for audit exemption when filing Annual Returns?

Answer: 

With effect from 1 November 2007, we have removed the need to attach the Statement by Singapore dormant companies for audit exemption for Exempt Private Singapore Companies. They are required to confirm on the online declarations before submitting the Singapore Company’s Annual Returns. Please seek professional advice from your Paul Hype Page & Co, ACRA Certified Public Accounting Firm.

 

Annual Return for local companies, there is a new selection “have not taken place” under the drop down list to confirm the transfers since the date of the last annual return. What is the difference?

Answer: 

The new selection “have not taken place” under the drop down list is added to cater to the scenario where no transfer of shares has taken place since the last annual return. In this case there is no need to register at all. On the other hand, if there is a transfer of shares since the last annual return but the company has not registered such transfer, then the lodger should select “have not been registered”. Please seek professional advice from your Paul Hype Page & Co, ACRA Certified Public Accounting Firm.

 

Singapore LLP required to submit Annual Returns to ACRA?

Answer: 

No but the manager is required to submit an Annual Declaration to ACRA stating whether the LLP is able or unable to pay its debts. Please seek professional advice from your Paul Hype Page & Co, ACRA Certified Public Accounting Firm.

 

Singapore LLP need to hold AGM? What about minutes and resolutions?

Answer: 

Singapore LLP Act does not prescribe requirements to hold Annual General Meetings. You have to refer to the LLP legislation on whether partnership’s resolutions are required to be filed or reported for specific instances (such as winding up). By and large, the LLP Act does not prescribe detailed requirements for different types of resolutions as the LLP is a “business” structure. Please seek professional advice from your Paul Hype Page & Co, ACRA Certified Public Accounting Firm.

 

What is the meaning of the word “satisfied” in the category ‘Statement of Satisfaction of Charge’?

Answer: 

Please refer to Section 136 of the Companies Act Chapter 50. What is the meaning of the word “discharged” in the category Statement of Satisfaction of Charge? Please refer to Section 136 of the Companies Act Chapter 50. Please advise on the appropriate category in the situation where all monies owing have not been fully paid off under the charge, however the bank wishes to discharge the charge (and remove from the register – such that the debt becomes unsecured) We regret to inform you that ACRA officers are not in a position to advise on matters other than registration procedures for companies/businesses and filing of Bizfile transactions. You have to determine which the appropriate option is. My bank has issued a statement of Satisfaction of Charge. How can I remove this Charge from the register? To release a company charge, please e-file the transaction under Local Company>Change/Update>Satisfaction of Charges. Please click this hyperlink to attachment of the Statement of Satisfaction of Registered Charge. You may engage a Professional Firm such as (Law Firm, Audit Firm or Company Secretarial Firm) to assist you on the Satisfaction of Charge.

 

How will I know if the Satisfaction of Charges submitted has been processed and approved, so that I can confirm that the Charge has been withdrawn / removed?

Answer: 

You may purchase the Business Profile from Bizfile to confirm the status of satisfaction of the Charge.

 

What is the meaning of the word “satisfied”?

Answer: 

The word satisfied means that the debt has been paid up.

 

What is the meaning of the word “discharged”?

Answer: 

The word discharged means that the charge voluntarily “released” the property from the charge and therefore “discharged” the obligations of the company.

 

If my S131 charge falls within more than one listed category, would it affect the registration of the charge if the category I select does not fully describe the charge?

Answer: 

Any of the categories, listed in the form, can be selected . We understand that some charges may straddle more than one category. It is sufficient that the charge comes within any of the categories. However, choosing any one category does not mean that the other categories do not apply.

 

If my bank has submitted my ‘Charge over Cash Deposits’ to ACRA for processing at a later date, will this affect the 30 days’ period to lodge my company charge?

Answer: 

Yes, this will affect the registration in view of the 30 days’ period to lodge the company charge.

 

 Is a Charge Over Cash Deposits classified as a charge on book debts of the company?

Answer: 

Please seek your own professional assistance on this matter as it varies according to individual company circumstances. ACRA officers are not empowered to provide advice on which section of the Companies Act will the charge falls into.

 

If I want to charge a fixed deposit to a bank, should I effect the transaction under ‘Charge on the Book Debts’ in the prescribed ‘Statement Containing Particulars of Charge’?

Answer: 

Please seek professional assistance on this matter as it varies according to the individual company circumstances. ACRA officers are not empowered to provide advice on which section of the Companies Act will the charge fall into.

 

Where can I obtain Forms 33 & 34 for charge registration?

Answer: 

These forms have been converted to electronic forms, since the launch of Bizfile on 13 Jan 2003. Registration of Charge is done through Bizfile by Professional Firms.

 

If I have to re-lodge the Charge, must I have to pay S$60 again?

Answer: 

If the earlier Charge you submitted was rejected, we will refund the filing fee of the rejected charge. You may re-lodge the Charge with a filing fee of S$60.

 

If we re-lodge the charge, what is the new effective lodgment date?

Answer: 

The effective lodgment date will be the re-lodgment date of the new application.

 

If the charge is rejected, how do I get a refund?

Answer: 

You do not need to apply for a refund. Once the Charge is rejected, we will arrange for the refund of the filing fee.

 

Do I have to renew the registered charges?

Answer:

There is no renewal for a charge which has been registered.

 

If I lodge a new charge under the statement containing the particulars of Charge, do I need to attach a copy of the instrument?

Answer: 

No, you are not required to attach a copy of the instrument but you should provide a short description of the properties adequately, while securing the charge.

 

Does ACRA keep a copy of the instrument we attached?

Answer: 

All documents attached with Bizfile transactions are kept in the system. However, you are not required to attach a copy of the instrument of charge.

 

If ACRA does not keep a copy of the instrument, how else can members of the public retrieve a copy?

Answer: 

To retrieve a copy of the instrument, the members of public may liaise with the company/professional firm which had lodged the said charge.

 

What is a charge?

Answer:

 A charge is a security interest over the company’s property.

 

I own a sole-proprietorship / partnership. Must I print company registration numbers on all business documents as per Section 144 of the Companies’ Act?

Answer: 

Section 144 (1A) applies only to Singapore-incorporated companies. It is meant for both private and public companies. Hence, this new requirement does not apply to Sole Proprietorship & partnership. overseas branches of local companies and local business firms, subsidiary companies registered in Singapore & registered business whose owner is a Singapore-incorporated company. Sole proprietorships and partnerships are governed by the Business Registration Act and Regulations. Regulation 11 requires businesses to print their registration number on all documents used for the purpose of the business.

 

What is the acceptable format(s) for printing the Company Registration Number?

Answer: 

The suggested acceptable presentation formats are as follows: – Company Registration Number eg. 198201234G or 200900355R.

 

My company has the same GST number and Company Registration Number. Must I still print both numbers on all my business documents?

Answer: 

Yes. The requirement for printing the company registration number is in addition to any written law requiring the company’s unique identifier to be printed on its documents. A company cannot argue that it need not print its company registration number since it has already printed its GST registration number, even they are identical. This is because the intent behind each legislative requirement is different and should be treated as separate and distinct.

 

I have printed my company stationery supply for the next 3 years. Can I rubber-stamp the Company Registration Number on all my existing stocks?

Answer: 

As a transitional measure, you may use a rubber stamp to indicate the company registration number on your existing stock of stationery.

 

If my company does not indicate its Company Registration Number, will there be any penalties imposed?

Answer: 

It is advised that ACRA acts on complaints. If a company is unable to meet the requirement, ACRA would require it to show cause why it cannot comply and will consider the merits of the matter on a case-by-case basis.

 

Instead of rubber-stamping the Company Registration Number, can my company write or paste printed stickers?

Answer: 

It is advised that ACRA would not impose restrictions on how the registration number should be reflected or printed.

 

Will a penalty be imposed if my company printed its registration number as ACRA number, instead of Company Registration Number?

Answer: 

What ACRA has done in the Addendum to Practice Direction 1 of 2004 was to suggest some acceptable formats, such as Co. Reg. No. and its permutations. Since the company has already printed the stock, ACRA has no objections to their using it up and printing the next batch with a more accurate description.

 

Besides the company’s documents listed in the table of the Practice Direction 1, how do we know if the Company Registration Number is compulsory on any other documents?

Answer:

 If they are for external usage and there is a possibility of confusion of the company name for another company name by any member of the public or clients, they are to be printed with the number to reduce or avoid such circumstance. Documents which are wholly for internal use are not required to be printed with the registration number.

 

Can I print my Company Registration Number as either 01414/1988-W or 198801414W?

Answer: 

You are advised to use the second format i.e. 198801414W as that is the most current format and the format used for filing purposes.

 

When an Offer of Composition is issued?

Answer: 

An Offer of Composition will be issued when: The company’s Form C, audited/unaudited accounts and tax computation are not filed by 30 Nov, the filing due date.

 

If my last set of Company accounts is qualified, can I use it to apply for striking-off?

Answer: 

Yes. A letter of undertaking from the auditor is required for the removal of the qualification. Alternatively, a new set of unqualified management accounts can be prepared and certified by the auditors.

 

My newly-incorporated dormant company has never filed AR before. Can I apply for striking off?

Answer: 

The newly-incorporated dormant company can rely on a cover letter to apply for striking off. Please visit our website www.acra.gov.sg. for the guidelines on application for striking off for the content of the letter.

 

My company has no more directors. Can I apply for striking-off?

Answer: 

ACRA will review the company for striking off, based on the criteria laid down.

 

My dormant company is due to hold AGM and submit the Annual Return. Can I instead proceed to initiate striking-off, without incurring penalties?

Answer: 

Yes, your company can proceed to apply for striking-off. There will be no penalty imposed while filing the application.

 

Striking-off takes 5 months to complete. Will ACRA inform us on the actions taken?

Answer: 

Yes. A striking-off notice is sent after the application has been approved. One month later, a first gazette notice is sent to the registered office address if no objection is received. After 3-months of the first notice and if no further objection received, a final notice is also sent to the registered address.

 

What are the procedures to close a company?

Answer: 

There are 2 ways to close a company. One is to wind up the company with professional assistance. The other is to apply for striking off with ACRA if you are able to meet the requirements stated in the guidelines on application for striking off.

 

Can anyone else, other than the Company Director or Secretary, apply for striking-off of the company?

Answer:

The directors or company secretary are the rightful persons to apply for striking off since they are the company officers.

 

 From the last set of audited accounts, what are the necessary pages required to scan into pdf format, since the accounts are prepared in a number of pages?

Answer: 

Statement by directors, auditors report and balance sheet are required to be scanned into pdf format. If the company is an exempt private company, please provide the latest exempt private company certificate.

 

How long must my company be inactive before I can apply for striking-off?

Answer: 

ACRA does not indicate any time schedule or limit for a company to apply for striking off. If the company has ceased trading or has been dormant, it may consider having its name removed from the register.

 

How can my company reinstate its struck-off status?

Answer:

An order from court is to be obtained to reinstate the company which has been struck off. Upon receiving it, it is to file “Lodgment of court order of reinstatement of company that has been struck off/dissolved at a filing fee of $10.

 

Can a company limited by guarantee apply for striking off?

Answer: 

Yes, it can. The procedures are same as when submitting a striking off application for a company limited by share. The only difference is that the company which is limited by guarantee must submit the last set of audited accounts while submitting the online application for striking off

 

I want to strike off a company limited by guarantee. Do I need to attach the last set of audited accounts when I submit the application?

Answer: 

Yes

 

Can I submit unaudited accounts together with my application to strike off a company limited by guarantee?

Answer: 

No. The accounts must be audited.

 

If the liabilities in the accounts are more than 6 years or statute-barred by the Limitation Act, what documents are to be submitted by the company?

Answer: 

A letter from the auditor or a lawyer confirming that these liabilities are statute-barred by the Limitation Act has to be attached in pdf format together with the striking off application submitted on-line.

 

What does a foreigner have to do if he wants to register a business firm in Singapore?

Answer:

A foreigner needs to apply for an Approval-In-Principle EntrePass if the foreigner wants to register a business and act as a local manager of the business firm. The foreigner must also have a Singapore residential address in the above cases. After obtaining the AIP-EP, the foreigner will have to approach a professional firm or a service bureau for submitting the BizFile transaction on his behalf to register a new business.

 

I am a Singapore Permanent Resident. Do I need to apply for AIP EP before registering a business in Singapore?

Answer: 

No, Permanent Residents can register a business without an Employment Pass.

 

If I am holding a valid EntrePass (EP) for the company that currently employs me and at the same time, wish to start my own business without resigning from my present job, must I cancel my existing EP before applying for AIP EP?

Answer:

No, you need not cancel your existing EP. Rather, you should apply for AIP EP along with a letter of no objection from your current employer. Your AIP EP will be treated as an application for an additional EntrePass to work for another company.

 

If I am holding a valid EntrePass for the company that currently employs me but wish to leave the current post to start my own business venture, must I cancel my existing EP before applying for AIP EP?

Answer: 

Yes, you will need to cancel your existing EntrePass before applying for AIP EP.

 

What is an EntrePass?

Answer:

Work pass

 

I have a Dependent’s Pass. Can I set up a business?

Answer:

Yes. However you are required to apply for a Letter of Consent (LOC) from the Ministry of Manpower.

 

Can I use my friend’s home address as my business address?

Answer: 

No.

 

Can I use a PO Box address as my business address?

Answer: 

No, P.O.Box address is not allowed to be used as the business address.

 

Can I use PO Box No. for my business address?

Answer: 

No.

 

Can I use my residential address as my business address?

Answer: 

With effect from 10 Jun 2003, all homeowners will be allowed to conduct small-scale businesses in their homes under the Home Office Scheme. The scheme will apply to both private and HDB properties.

 

What if the business is dormant, am I required to inform ACRA?

Answer: 

If you wish to keep the business registration, you must renew the registration annually; otherwise you must take steps to close the business.

 

Do I need to print my business name and registration number on the invoice, etc?

Answer: 

Every business firm must print i’ts full registered business name and the Registration Number on every letterhead, invoice, bill and other documents used for purposes of its business.

 

I am an EntrePass holder. Can I register a business?

Answer:

 Yes.

 

I am an S Pass holder. Can I register a business?

Answer:

An S Pass is not an EntrePass. Please check the terms and conditions of your S Pass. If unsure, you should consult Ministry of Manpower (MOM).

 

I have an Approval-in-Principle Entrepass. Can I register a business?

Answer:

Yes.

 

What are the changes that I can file online?

Answer:

They include the change in the Business Name, Business Activity, Principal Place of Business, Branches, Entry/Withdrawal of Owner/Manager, Change in personal particulars of Owner/Manager & Termination or Cessation of Business.

 

Can one owner file all changes in the business?

Answer:

Most changes can be filed online by any one owner who can access it thru his SingPass. They include change in Business name, Business Activity, Principal place of business,Branches & Cessation of Business. Changes such as Entry/Withdrawal of owner, Entry of new manager, Termination of business will require other partners to complete the online filing by endorsement using their own SingPass. If it is a change in personal particulars of one owner such as email address, handphone number, residential address or change in his or her personal name (such as taken up a deed poll to give up the previous personal name), it can be filed by that owner only.

 

Can I file more than one changes in my business registration & what’s the fee like?

Answer:

Yes, you can file more than 1 changes. You will need to save up successfully the respective changes before you proceed to do the next one. After you have completed all the necessary changes, you will need to click the “submit” button & proceed with the payment. The fee for all changes will be $20, except the change in business name which is $35

 

When does ACRA send the cancellation notices?

Answer: 

The cancellation notices are sent when the business registration has expired and has not been renewed. The notices are usually sent about 2 – 3 months after the expiry date.

 

I have received a cancellation notice from ACRA but have no intention to renew my business registration. Do I need to notify ACRA or take any further action?

Answer:

We sent the cancellation notice because our records show that the business registration has expired and has not been renewed. We are therefore assuming that the business is dormant and that the owner has no intention to carry on business. We will proceed to cancel the business registration once the grace period of one month (given in the cancellation notice) expires. There is no further action required on your part.

 

What should I do if I receive the cancellation notice and I do not wish to continue my business?

Answer:

ACRA will automatically cancel the business registration one month after the expiry of the cancellation notice. There is no further action required on your part.

 

I received a Cancellation Notice and wish to renew the business registration. Is this possible?

Answer:

Yes. Please log into www.bizfile.gov.sg using your ID No and SingPass to renew your business registration. A penalty will be imposed for late renewal.

 

My business has been cancelled. How can I revive it?

Answer:

The business registration has been cancelled and the Registrar is unable to reinstate the business as there is no provision in the Business Registration Act empowering the Registrar to do so. You may choose to register a new business using the same name. The fee payable is $65. On the other hand, you may choose to submit an appeal to the Minister of Finance through ACRA for the reinstatement of the business registration. You will have to send your appeal in writing (setting out the grounds for the appeal) and pay an appeal fee of $50 via cheque made payable to ACRA. This letter is to be addressed to the Registrar, ACRA.

 

How do I close my business?

Answer:

If you no longer intend to continue with your business and have decided to close it, there are 2 ways in which you can close the business; you may choose to file a Notice of Termination or a Notice of Cessation. There are some differences between terminating a business and submitting a notice of cessation, which are given in the following: 1. When you file the notice of termination online, you have to pay a filing fee of $20. However there is no fee payable for filing the notice of cessation. 2. Termination requires the endorsement (consent) of all the partners but cessation can be filed by any one partner. 3. The date of termination can be decided by the owners and it has to be a date before the date of expiry of the business registration. However the date of cessation is the date of expiry of the business registration and cannot be changed to another date. If you are able to wait until the expiry of the business registration and then close the business, we would advise you to submit a notice of cessation. However, if for any reason, you need to close the business immediately, then you will have to submit the notice of termination online and pay the filing fee of $20.

 

I do not wish to carry on business. How can I close my business firm?

Answer:

You can choose to terminate the business or submit a notice of cessation. Both transactions must be lodged online via www.bizfile.gov.sg.

 

What is the difference between termination and cessation of business?

Answer:

Termination carries a $20 filing fee whilst the notice of cessation is free of charge. Termination can be done anytime before the expiry of the business registration but cessation can only be filed after the expiry of the business registration. Termination needs the consent of all the partners but the notice of cessation can be submitted by any one partner.

 

I do not wish to carry on business after the expiry of the business registration. What can I do to close the business?

Answer:

You can submit a notice of cessation online via www.bizfile.gov.sg. There is no fee payable.

 

My business registration has expired and I have received a cancellation notice from ACRA. I do not wish to carry on business. What should I do?

Answer:

You need not do anything. ACRA will cancel the business registration when the grace period given in the cancellation notice expires.

 

My business registration has expired. Will ACRA cancel the business?

Answer:

Yes. We will send you a cancellation notice giving you a grace period of one month to renew the business registration. If you fail to do so, we will cancel the business registration.

 

I have terminated the business online and paid the filing fee of $20. Why does the business profile show that the business is still live?

Answer:

One possible reason is that the other partners of the business firm have not logged into the system using their ID No and SingPass to endorse or consent to the transaction. Please advise them to attend to this matter immediately so that the status of the business firm can be updated accordingly.

 

I terminated my business registration by mistake. Can I undo the termination?

Answer:

No. You may choose to register a new business using the same name as the previous business. This is on condition that the partners of the new business were also the partners of the previous business.

 

I want to close my business. Do I need to secure the consent of my partners?

Answer:

For termination, you need the consent of all the partners. For cessation of business, no such consent is required.

 

I want to close the business but cannot locate my partners. How can I close the business?

Answer:

If you are terminating the business, you can make an online declaration setting out the reasons why you are unable to contact the partners. You may choose to file a notice of cessation which does not require the consent of the partners.

 

What is the fee for terminating a business?

Answer:

For terminating the business, the fee is $20.

 

What is the fee for filing a notice of cessation?

Answer:

There is no fee payable. This service is free of charge.

 

I have terminated my business. Can I register a new business using the same name?

Answer:

Yes; provided the partners of the new business were also the partners of the previous business.

 

ACRA has cancelled my business registration. Can I still carry on business?

Answer:

No. It is an offense to carry on business once the registration has been cancelled. If you want to carry on business, please register a new business using the same name as the previous business; provided the partners of the new business were also the partners of the previous business.

 

I have terminated the business. Will ACRA inform the other agencies?

Answer:

No. It is the responsibility of the business owner to notify the other agencies accordingly.

 

I want to close the business but my partners do not agree. What can I do?

Answer:

You can choose to withdraw as a partner of the business firm and leave your other partners to carry on with the business. However, all the other partners need to consent to your withdrawal from the firm

 

Why does ACRA send so many copies of the cancellation notice by registered post?

Answer:

We want to ensure that it is brought to the attention of the business firm and its owner(s) and manager(s) that we are going to take action to cancel the registration of the firm.

 

I have received the cancellation notice and need more time to renew. Can I apply for an extension?

Answer:

Yes. You may call us at 62486028 or drop us an email at www.acra.gov.sg/askacra. We will extend the deadline for you. Please contact us before the expiry of the grace period in the cancellation notice.

 

My business registration has been cancelled. Can ACRA reinstate the business to live?

Answer:

No. The Registrar has no power to reinstate the business to live. We would advise you to register a new business using the same name. This is on condition that the owners of the new business were the owners of the previous business.

 

If my business registration is cancelled and I register a new business, do I retain the same registration number and the date of registration?

Answer:

No. You will be issued with a new registration number and the date of registration will be the date you pay the registration fee to register the new business.

 

If I am issued with a new registration number, how will I convince the other agencies that it is the same business firm?

Answer:

You have to purchase the business profiles of both the old and the new entity and produce it as proof to these agencies.

 

I want to do business with a business firm. However the status is shown as registration expired and has not been renewed. What does this mean?

Answer:

It means that the firms business registration has expired but the owner has not taken steps to renew the business registration.

 

Does ACRA have the power to cancel my business registration?

Answer:

Yes. Section 15(5) of the Business Registration Act empowers the Registrar to cancel the business registration if the firm is not carrying on business.

 

Will ACRA notify me once the business is cancelled?

Answer:

No. You may purchase a business profile to check on the status of the business firm.

 

I have received a cancellation notice. Can I renew the registration without paying my Medisave with the CPF Board?

Answer:

No. You will have to settle your Medisave first and then renew the business registration. If you need more time to attend to this matter, please call us at 62486028 or drop us an email at www.acra.gov.sg/askacra. We will extend the deadline for you. Please contact us before the expiry of the grace period in the cancellation notice.

 

How do I terminate my business firm?

Answer:

Please submit an online transaction via www.bizfile.gov.sg. The fee payable is $20. Termination requires the consent of all the partners (if the business firm is a partnership) and the partners have to log into the system using their individual ID and SingPass to endorse the transaction to terminate the business. Once everyone has endorsed, the status of the business will be updated as terminated.

 

How to cease my business firm?

Answer:

Please submit an online transaction via www.bizfile.gov.sg after the expiry date of the business registration. There is no fee payable for this transaction. The date of cessation will be the date of expiry of the business registration.

 

Do the partners need to endorse the transaction to cease business?

Answer:

No endorsement is required for cessation of business. Endorsement is only required for termination of business.

 

Why do I have to pay for termination when the filing of the notice of cessation is free of charge?

Answer:

Termination is a voluntary act by the owner to close the business firm. The owner can choose any date of termination but the date must be before the date of expiry of business registration. Cessation on the other hand is a decision by the owner not to carry on business after the business registration has expired. The owner cannot choose the date of cessation. It is defaulted to the date of expiry of business registration. This is why there is no filing fee for submitting the notice of cessation.

 

Can I postdate the termination date?

Answer:

No. You cannot postdate the termination date unless you are planning to terminate the business and incorporate a company (private limited) using the same name.

 

When can I file for notice of cessation?

Answer:

You can file the notice of cessation after the date of expiry of the business registration.

 

If there is a disagreement between the business partners and none of them wants to terminate or cease the business, what can I do?

Answer:

Under such circumstances, it is advised that you seek legal advice on what should be the best course to protect your interests in the business firm.

 

I am unable to terminate my business on the business expiry date. What should I do?

Answer:

Please file a notice of cessation online. There is no filing fee payable for submitting this online form.

 

 I have received a cancellation notice from ACRA. What should I do?

Answer:

If you want to renew the business registration, you will log into www.bizfile.gov.sg to renew the business registration. In addition to the renewal fee of $20, you will also have to pay a penalty for late renewal.

 

How long can I postdate the termination date if I want to terminate the business and incorporate a company?

Answer:

You can postdate up to 6 months.

 

Can I postdate the termination date to a date after the expiry of the business registration?

Answer:

No.

 

Do I still need to renew my business registration if the renewal date falls within the post-dated termination?

Answer:

Yes.

 

Is there any implication if I allow my business registration to be cancelled by ACRA without taking step to terminate or cease my business?

Answer:

No, there are no implications.

 

If there is a disagreement between the business partners and none of them wants to terminate or cease the business, what can I do?

Answer:

Under such circumstances, it is advised that you seek legal advice on what should be the best course to protect your interests in the business firm.

 

I am the manager of the business firm. Can I terminate the business?

Answer:

No. Only the owner can terminate the business.

 

Do I need to inform IRAS that my business is terminated?

Answer:

Yes.

 

Will I be black listed if my business registration is cancelled by ACRA?

Answer:

No.

 

Can a local manager terminate the business on the behalf of the owner who is a foreigner?

Answer:

No. If the foreigner wants to terminate the business, he has to engage the services of a professional firm or service bureau to assist in the termination of the business.

 

What happens if I do not renew the business registration?

Answer:

We will send you a cancellation notice and then proceed with cancellation if the registration is still not renewed.

 

My partner wants to withdraw from the business. What should I do?

Answer:

The correct procedure to notify us of the withdrawal of the partner is by submitting an online transaction via www.bizfile.gov.sg. The steps that are to be taken are as follows: 1. The existing or withdrawing partner logs into www.bizfile.gov.sg using his own NRIC No and SingPass to notify us of the withdrawal. 2. The said partner submits the transaction and pays $20 by credit card (Visa/Mastercard) or Internet Banking. 3. The other partner(s) of the firm log into BizFile individually using their own NRIC No and SingPass to endorse the transaction. These include everyone else except the person who logged into the system to submit the online transaction. After everyone, who needs to endorse the transaction, has done so, our records will be updated accordingly. Please note that the endorsement must be done within 3 days from the date of submission of the transaction; otherwise the transaction will lapse and will be rejected by the system.

 

I want to make some changes in my business particulars. How do I do it?

Answer:

Please log in to www.bizfile.gov.sg to file the changes. A fee of $20 is payable.

 

How do I change my business address?

Answer:

Please log in to www.bizfile.gov.sg > Business to file the changes. A fee of $20 is payable.

 

What must I do if my partner wants to withdraw?

Answer:

You must log into Bizfile to submit an online transaction to withdraw the owner. The fee payable is $20. Thereafter the withdrawing partner must log into Bizfile using his ID No and Singpass to endorse the transaction within 3 days.

 

What if I would like to add in more business activity?

Answer:

As there are only 2 activity codes allowed, you may reclassify one or two of your activities and also describe your activities under the description column.

 

How do I inform ACRA about the death of an owner?

Answer:

You may engage the service of a professional firm or service bureau to file such transaction on your behalf. Alternatively, the next-of-kin must be present with the death certificate; together with any one existing owner(bringing along his/her I/C) to file this transaction at our office. A fee of $20 by Nets is payable for the transaction.

 

What if the owner did not do the endorsement within 3 days?

Answer:

The transaction will lapse. You may send an email to www.acra.gov.sg/askacra to request for extension of the deadline for endorsement.

 

Can the sole director be the sole shareholder of the company?

Answer:

Yes, the director and shareholder of a company can be the same person.

 

Is there a fee payable for change in owner’s email address & mobile phone number?

Answer:

No fee is charged for the change of the owner’s email address and mobile/phone number.

 

Do I need to submit a copy of the Deed Poll to ACRA when I file the change in my personal name?

Answer:

No. You are required to key in the details in the Deed Poll into the system.

 

How do I pay online?

Answer:

You can make payment through credit card (Visa or Mastercard) or internet banking. You can also pay by CashCard if you have a CashCard reader attached to your computer.

 

My online refund request was rejected and I was instructed to apply for a manual refund. How do I submit an application for manual refund?

Answer:

We will arrange for a manual refund. Please provide the following information: Name of Bank Name of Branch Account No Account Holder’s Name (Full Name as in NRIC) Account Holder’s NRIC No Mailing Address Business Registration Number Amount to be refunded Receipt Number & Date of Payment Reason for Refund Once we receive the information, we will process the refund immediately and send the application to our Finance Division who will then take action to credit the money into your bank account.

 

I made an error in my online transaction. Can I rectify it?

Answer:

Certain errors cannot be rectified. For those that can be rectified, you can file an online transaction to rectify the error. The fee payable is $30.

 

I want to add in a foreign owner who holds a foreign passport. Can I do it online?

Answer:

No. The foreign owner will not be issued with a SingPass. You and your new foreign owner need to engage the service bureau or seek professional help to file the transactions for you.

 

I want to change my business activity. Where can I find the activity code?

Answer:

Please click on the online SSIC Search (Singapore Standard Industrial Classification) which is available at our homepage at www.acra.gov.sg.

 

What must I do if there are changes to my personal/business particulars?

Answer:

You have to notify the Registrar regarding any changes in the particulars of your business firm within 14 days, after such change has occurred by logging into www.bizfile.gov.sg and submitting the online notification of the change.

 

What if my partner is a foreigner holding a foreign passport? Can he/she file the changes online?

Answer:

No. He will need to engage a professional firm or service bureau to file the changes on his behalf.

 

If I change my residential address and I notify the NRIC office or the Police Post, must I submit this change online to ACRA?

Answer:

No. Our records will be automatically updated.

 

Can I convert my sole-proprietorship to a company?

Answer:

Technically, a sole proprietorship cannot be converted to a company. A sole proprietorship is a separate legal entity from a company and the law does not provide any process for conversion. Instead, what needs to be done is to terminate the sole proprietorship, inform ACRA that you have ceased to carry on business as a sole proprietorship and incorporate a new company. In that case you may need: (i) to transfer the business assets that will be used in the business and any existing contracts over to the new business structure; and (ii) to get new licenses or permits (as licenses and permits usually cannot be transferred). You should seek the advice of the agency issuing the licenses or permits on their validity and seek professional advice generally if you are uncertain as to what should be done. At the point of submission of the online transaction to incorporate the company, you may indicate in the online form that the company is going to take over the business of the registered business (that is, the sole proprietorship). You are required to provide the details of the registered business (that is, the sole proprietorship) as well as the date of termination of the business (which can be postdated up to 3 months). Thereafter you will have to submit an online transaction to terminate the business registration (that is, notify ACRA that you have ceased to carry on business). The fee payable is $20. The fee payable to incorporate the new company is $315.

 

Can the sole director be appointed as the company secretary?

Answer:

No, the sole director of a company and the company secretary cannot be the same person.

 

How many directors and shareholders must have a company?

Answer:

With effect from 1st April 2004, a company must have at least one director and one shareholder.

 

What must I do if I want to convert my business to company?

Answer:

Technically, a registered business (whether sole proprietorship or a partnership) cannot convert to a company. A registered business (that is, a sole proprietorship or a partnership) is a separate legal entity from a company and the law does not provide any process for conversion. Instead, what needs to be done is to terminate the registered business (that is, the sole proprietorship or partnership), inform ACRA that you have ceased to carry on business as a registered business and incorporate a new company. Then you may need (i) to transfer the business assets that will be used in the business and any existing contracts over to the new business structure; and (ii) to get new licenses or permits (as licenses and permits usually cannot be transferred). You should seek the advice of the agency issuing the licenses or permits on their validity and seek professional advice generally if you are uncertain as to what should be done. At the point of submission of the online transaction to incorporate the company, you may indicate in the online form that the company is going to take over the business of the registered business (that is, the sole proprietorship or partnership). You are required to provide the details of the registered business (that is, the sole proprietorship or partnership) as well as the date of termination of the business (which can be postdated up to 3 months). Thereafter you will have to submit an online transaction to terminate the business registration (that is, notify ACRA that you have ceased to carry on business). The fee payable is $20. The fee payable to incorporate the new company is $315.

 

I have a partnership. How do I change it to a private limited company?

Answer:

Technically, a partnership cannot convert to a company. A partnership is a separate legal entity from a company and the law does not provide any process for conversion. Instead, what needs to be done is to terminate the partnership, inform ACRA that you have ceased to carry on business as a partnership and incorporate a new company. Then you may need (i) to transfer the business assets that will be used in the business and any existing contracts over to the new business structure; and (ii) you may need to get new licenses or permits (as licenses and permits usually cannot be transferred). You should seek the advice of the agency issuing the licenses or permits on their validity and seek professional advice generally if you are uncertain as to what should be done. At the point of submission of the online transaction to incorporate the company, you may indicate in the online form that the company is going to take over the business of the registered business (that is, the sole proprietorship or partnership). You are required to provide the details of the registered business (that is, the sole proprietorship or partnership) as well as the date of termination of the business (which can be postdated up to 3 months). Thereafter you will have to submit an online transaction to terminate the business registration (that is, notify ACRA that you have ceased to carry on business). The fee payable is $20. The fee payable to incorporate the new company is $315.

 

Currently I have a registered business. Can I change it to a Pte Ltd company?

Answer:

Technically, a registered business (whether sole proprietorship or a partnership) cannot convert to a company.

A registered business (that is, a sole proprietorship or a partnership) is a separate legal entity from a company and the law does not provide any process for conversion. Instead, what needs to be done is to terminate the registered business (that is, the sole proprietorship or partnership), inform ACRA that you have ceased to carry on businesses as a registered business and incorporate a new company. Then you may need (i) to transfer the business assets that will be used in the business and any existing contracts over to the new business structure; and (ii) to get new licenses or permits (as licenses and permits usually cannot be transferred). You should seek the advice of the agency issuing the licenses or permits on their validity and seek professional advice generally if you are uncertain as to what should be done. At the point of submission of the online transaction to incorporate the company, you may indicate in the online form that the company is going to take over the business of the registered business (that is, the sole proprietorship or partnership). You are required to provide the details of the registered business (that is, the sole proprietorship or partnership) as well as the date of termination of the business (which can be postdated up to 3 months). Thereafter you will have to submit an online transaction to terminate the business registration (that is, notify ACRA that you have ceased to carry on business). The fee payable is $20. The fee payable to incorporate the new company is $315.

 

How can I convert my business to a Singapore company?

Answer:

Technically, a registered business (whether sole proprietorship or a partnership) cannot be converted to a company. A registered business (that is, a sole proprietorship or a partnership) is a separate legal entity from a company and the law does not provide any process for conversion. Instead, what needs to be done is to terminate the registered business (that is, the sole proprietorship or partnership), inform ACRA that you have ceased to carry on business as a registered business and incorporate a new company. Then you may need (i) to transfer the business assets that will be used in the business and any existing contracts over to the new business structure; and (ii) to get new licenses or permits (as licenses and permits usually cannot be transferred). You should seek the advice of the agency issuing the licenses or permits on their validity and seek professional advice generally if you are uncertain as to what should be done. At the point of submission of the online transaction to incorporate the company, you may indicate in the online form that the company is going to take over the business of the registered business (that is, the sole proprietorship or partnership). You are required to provide the details of the registered business (that is, the sole proprietorship or partnership) as well as the date of termination of the business (which can be postdated up to 3 months). Thereafter you will have to submit an online transaction to terminate the business registration (that is, notify ACRA that you have ceased to carry on business). The fee payable is $20. The fee payable to incorporate the new company is $315

 

What transaction must I submit if I wish to change my business to a company?

Answer:

Technically, a registered business (whether sole proprietorship or a partnership) cannot be converted to a company. A registered business (that is, a sole proprietorship or a partnership) is a separate legal entity from a company and the law does not provide any process for conversion. Instead, what needs to be done is to terminate the registered business (that is, the sole proprietorship or partnership), inform ACRA that you have ceased to carry on business as a registered business and incorporate a new company. Then you may need (i) to transfer the business assets that will be used in the business and any existing contracts over to the new business structure; and (ii) to get new licenses or permits (as licenses and permits usually cannot be transferred). You should seek the advice of the agency issuing the licenses or permits on their validity and seek professional advice generally if you are uncertain as to what should be done. At the point of submission of the online transaction to incorporate the company, you may indicate in the online form that the company is going to take over the business of the registered business (that is, the sole proprietorship or partnership). You are required to provide the details of the registered business (that is, the sole proprietorship or partnership) as well as the date of termination of the business (which can be postdated up to 3 months). Thereafter you will have to submit an online transaction to terminate the business registration (that is, notify ACRA that you have ceased to carry on business). The fee payable is $20. The fee payable to incorporate the new company is $315.

 

What forms must I lodge to ACRA for conversion from a business to a company?

Answer:

Technically, a registered business (whether sole proprietorship or a partnership) cannot convert to a company. A registered business (that is, a sole proprietorship or a partnership) is a separate legal entity from a company and the law does not provide any process for conversion. Instead, what needs to be done is to terminate the registered business (that is, the sole proprietorship or partnership), inform ACRA that you have ceased to carry on business as a registered business and incorporate a new company. Then you may need (i) to transfer the business assets that will be used in the business and any existing contracts over to the new business structure; and (ii) to get new licenses or permits (as licenses and permits usually cannot be transferred). You should seek the advice of the agency issuing the licenses or permits on their validity and seek professional advice generally if you are uncertain as to what should be done. At the point of submission of the online transaction to incorporate the company, you may indicate in the online form that the company is going to take over the business of the registered business (that is, the sole proprietorship or partnership). You are required to provide the details of the registered business (that is, the sole proprietorship or partnership) as well as the date of termination of the business (which can be postdated up to 3 months). Thereafter you will have to submit an online transaction to terminate the business registration (that is, notify ACRA that you have ceased to carry on business). The fee payable is $20. The fee payable to incorporate the new company is $315

 

What on-line transaction must I file to convert a business to a company?

Answer:

Technically, a registered business (whether sole proprietorship or a partnership) cannot be converted to a company. A registered business (that is, a sole proprietorship or a partnership) is a separate legal entity from a company and the law does not provide any process for conversion. Instead, what needs to be done is to terminate the registered business (that is, the sole proprietorship or partnership), inform ACRA that you have ceased to carry on business as a registered business and incorporate a new company. Then you may need (i) to transfer the business assets that will be used in the business and any existing contracts over to the new business structure; and (ii) to get new licenses or permits (as licenses and permits usually cannot be transferred). You should seek the advice of the agency issuing the licenses or permits on their validity and seek professional advice generally if you are uncertain as to what should be done. At the point of submission of the online transaction to incorporate the company, you may indicate in the online form that the company is going to take over the business of the registered business (that is, the sole proprietorship or partnership). You are required to provide the details of the registered business (that is, the sole proprietorship or partnership) as well as the date of termination of the business (which can be postdated up to 3 months). Thereafter you will have to submit an online transaction to terminate the business registration (that is, notify ACRA that you have ceased to carry on business). The fee payable is $20. The fee payable to incorporate the new company is $315.

 

Do I need to terminate my business registration before incorporating a new company using the same name?

Answer:

Yes, but you may postdate the date of termination of the business registration by up to 6 months.

How long can I keep my business registration live if I am planning to incorporate a company using the same name as the business firm?

Answer:

You can postdate the termination date of the business registration up to 6 months.

 

Can I use the same name for a business and a company?

Answer:

No, The law prohibits a registered business from having the same name as another registered business entity (i.e. a company or limited liability partnership).

 

My business registration has been cancelled and I have ceased carrying on business under the business name. What must I do if I want to convert it to a company?

Answer:

Technically, a registered business (whether sole proprietorship or a partnership) cannot be converted to a company. A registered business (that is, a sole proprietorship or a partnership) is a separate legal entity from a company and the law does not provide any process for conversion. Instead, what needs to be done is to terminate the registered business (that is, the sole proprietorship or partnership), inform ACRA that you have ceased to carry on business as a registered business and incorporate a new company. Then you may need (i) to transfer the business assets that will be used in the business and any existing contracts over to the new business structure; and (ii) to get new licenses or permits (as licenses and permits usually cannot be transferred). You should seek the advice of the agency issuing the licenses or permits on their validity and seek professional advice generally if you are uncertain as to what should be done. At the point of submission of the online transaction to incorporate the company, you may indicate in the online form that the company is going to take over the business of the registered business (that is, the sole proprietorship or partnership). You are required to provide the details of the registered business (that is, the sole proprietorship or partnership) as well as the date of termination of the business (which can be postdated up to 3 months). Thereafter you will have to submit an online transaction to terminate the business registration (that is, notify ACRA that you have ceased to carry on business). The fee payable is $20. The fee payable to incorporate the new company is $315.

 

My business registration has been cancelled. Can I register a new company using the same name?

Answer:

Yes. Where the registration of a business has been cancelled, you may incorporate a company using the same name as the former business name.

 

How long can I postdate the termination for my business registration (that is, the date I cease to carry on business) if I am going to incorporate a company using the same name?

Answer:

The maximum period that you are allowed to postdate the cessation of carrying on business in such a case is 6 months

 

What are the suffixes that I can use for a company?

Answer:

There is a list of suffixes that you can select for registration of company. Some examples are Pte Ltd and Private Limited.

 

Must I use the words Pte. Ltd. or Private Limited as part of my company name?

Answer:

Yes, if the company is a private company. However, charitable companies and certain other companies may omit the word Limited or Ltd. if the Minister approves.

 

Must the person who submits the name application to incorporate the company be the proposed director or shareholder of the company?

Answer:

No

 

Can we change the director of the company at the time of incorporation?

Answer:

Yes.

 

What is the minimum number of directors for a company?

Answer:

The minimum number of directors is one.

 

I am the applicant for the proposed Singapore company name which has been approved. However when I log into Bizfile to incorporate the company, the system does not allow me to incorporate the company. Why?

Answer:

The person who logs onto Bizfile to incorporate the company must be one of the proposed directors named in the company name application.

 

I applied for the company name which has been approved. Now the system prompts me with a message that I am not authorized to incorporate the company. Why?

Answer:

The person who logs onto Bizfile to incorporate the company must be one of the proposed directors named in the company name application.

 

I am the name applicant but I am not one of the proposed directors of the new company. May I proceed to incorporate the company?

Answer:

The person who logs onto Bizfile to incorporate the company must be one of the proposed directors named in the company name application

 

If I have an existing company or business, can I convert it to an LLP?

Answer:

Yes, you may submit an online transaction to convert the company or business into an LLP. This is on condition that the partners of the business firm and the shareholders of the company are going to be the partners of the LLP and the company has no outstanding security interests in its assets at the time of the application for the conversion.

If a professional firm e.g. accountants or lawyers wish to convert to LLP (assuming the relevant professional act has been amended to allow this), will this be by way of conversion or required to register a new LLP.

Answer:

With effect from Jan 2007, a law practice may convert to a law LLP by filing an online transaction called “Conversion from Professional Firm to Limited Liability Partnership” under Limited Liability Partnership Transactions via Www.Bizfile.Gov.Sg.

 

Is it correct to say that the offices of directors and companies and secretaries cease upon conversion of a company to LLp?

Answer:

It is more correct to say that once the company has been converted to an LLP, the company ceases to exist.

 

After conversion from Sole-Proprietorship to LLP, is it necessary to inform all vendors/client/banker before the conversion, especially when the liability has been changed from unlimited to limited.

Answer:

The Act requires the LLP to ensure that for a period of 12 months commencing 14 days from the date of registration, every invoice or official correspondence of the LLP shall carry the information that the LLP has been converted from a business firm to LLP and the name and registration number of the business firm which it has been converted from.

 

What are the benefits of using XBRL?

Answer:

Providing greater access to corporate financial data End-users of financial information can request for specific items in the financial statements across a wide spectrum of companies, e.g. companies in similar industries, for analysis or benchmarking purposes. Such information may not be easily available currently for financial statements which are filed in Portable Document Format (PDF) or hardcopies. It will also require less effort in collating and manual re-keying of data. The potential users to benefit from XBRL includes shareholders, investors, members of the public, banks and institutional lenders, stock brokers, credit bureau, companies themselves, etc; Facilitating one-stop filing Having prepared the statements under one standard format, in the long run it would be possible for one-stop agency to be established where companies need only file one set of financial statements with that agency, e.g. ACRA, to fulfill their statutory financial reporting obligations. The same set of financial statements filed can be transferred to other regulatory agencies with similar filing requirements, e.g. IRAS; and Strengthening regulatory vigilance Having expended less effort in sieving through various reporting formats, collating and manual re-keying of data, regulators can devote more time on analysing data and performing their regulatory vigilance functions. Experiences in other countries show that XBRL has been instrumental in improving the regulators surveillance and vigilance functions and ACRA is, likewise , also tapping on XBRL to improve efficiencies and effectiveness of its surveillance and vigilance functions.

 

Will XBRL change accounting standards?

Answer:

No. XBRL is simply a language for transmitting information. It must accurately reflect data reported under the applicable accounting standards, it does not change them. [Source: XBRL.org]

 

Who developed XBRL?

Answer:

XBRL is developed by a global consortium called XBRL.org, which comprises approximately 450 leading companies, associations, and agencies involved in providing or using business information. Members of the global consortium comprise professional services and consulting companies, financial services and information providers, software and other technology providers, government and not-for-profit organisations, and accounting and trade organisations. These include the Big Four accounting firms, International Accounting Standards Board (IASB), Australian Prudential Regulation Authority (APRA), UK Companies House, EDGAR Online, US FDIC, Korea Stock Exchange, Microsoft, Moodys Investor Service, Morgan Stanley, New Zealand Stock Exchange, Reuters, Shanghai Stock Exchange, Stock Exchange of Thailand, Tokyo Stock Exchange, American Institute of Certified Public Accountants, CPA Australia etc. [Source: XBRL.org]

 

Which countries or organisations have adopted XBRL?

Answer:

To date, XBRL has been adopted by major industry players, such as Dresdner Bank (to enhance its credit monitoring process), Bank of America, Microsoft (to streamline its data dissemination to various stakeholders), Morgan Stanley and Reuters. XBRL has also been adopted by some regulators in Australia, Japan, South Korea, Sweden , China, US and UK for their regulatory filings. These include the US Federal Deposit Insurance Corporation (FDIC), UK Inland Revenue Authority, the Stock Exchanges of Tokyo, Shenzhen, South Korea, UK Companies House and the Swedish Companies Registration Office. In April 2007, the National Bank of Belgium which is responsible for collecting financial statements from Belgian companies, switched to accepting accounts filed in XBRL.

 

Where can I obtain more information on XBRL?

Answer:

For future announcements and updates on FS Manager and ACRA’s implementation of XBRL, please visit our Homepage at https://www.acra.gov.sg/. You may sign up for ACRA News Online to get the latest news updates. To sign up, please fill up the online form at https://www.acra.gov.sg/home/. Further information on XBRL, including latest updates and international developments can be accessed at:http://www.xbrl.org Frequently asked questions on XBRL can be found in our interactive web service, ASK ACRA at https://www.acra.gov.sg/ask_ACRA_FAQs/. You can also access our Interactive Voice Response System for information on XBRL by calling our hotline number at (65) 6248 6028 and choose option 1, followed by 4.

 

Where can I get some training on the use of the FS Manager?

Answer:

To help you with the transition for filing financial statements using FS Manager, ACRA has appointed several training partners such as DP Bureau, the Singapore Academy of Law, Certified Practising Accountants (CPA) Australia, Singapore Association of The Institute of Chartered Secretaries and Administrators (SAICSA) and Institute of Certified Public Accountants of Singapore (ICPAS), to offer training sessions on using FS Manager. Details of these training sessions are now available at our website -http://www.acra.gov.sg/News_and_Events/Calendar_of_Events/ You may also sign up for ACRA News Online to get the latest news updates. To sign up, please fill up the online form at https://www.acra.gov.sg/home/.

 

How do companies create financial statements in XBRL format?

Answer:

Companies can use the FS Manager. FS Manager is a free online tool provided by ACRA as part of BizFile to help companies prepare and manage financial statements in XBRL format. Using FS Manager, company filers or relevant users (e.g. preparers of financial statements) can submit companies financials via completing a series of web-based forms. The web-based forms are designed in accordance with ACRA’s taxonomy requirements. FS Manager can be accessed through BizFile Homepage with effect from 1 May 2007. To use FS Manager, the following are required: On Windows Platform Operating System: Windows 2000 Service Pack 4 and above Web Browser: Internet Explorer 5.5 SP 2 and above (Javascript must be enabled) or Firefox 1.5.0.x and above (Javascript must be enabled) On Mac Platform Operating System: Mac OS X 10.2.x and above Web Browser: Firefox 1.5.0.x and above (Javascript must be enabled)

 

Why are there no signatures in the Financial Statements filed in full XBRL format (Option A)? How do I know if the accounts have been audited when the filed financial statements do not show any signatures in the Auditors’ Report?

Answer:

The full XBRL format (Option A) requires the accounts of a company which have been prepared in XBRL to be filed in that format. The XBRL format in FS Manager does not provide for the inclusion of signatures of the directors or auditors. As such, the pdf document generated from the XBRL accounts will not indicate any signatures. Notwithstanding that the signatures may not be apparent where the accounts have been filed in full XBRL, the director of the company is required to confirm that the accounts which are filed have been prepared in accordance with the requirements of the Companies Act. The onus is on the directors of the company to ensure that the requirements for the preparation of the accounts are in compliance with the Companies Act, including the requirement to have the accounts audited, where applicable. If ACRA detects any non-compliance with the necessary requirements,we will take appropriate action against the company. However, please notethat the absence of the signatures of the auditors do not necessarily indicate that the accounts have not been duly audited, as explained.

 

Do I need to key in both years of financial figures in the financial statements?

Answer:

When preparing the financial statements in XBRL format using FS Manager for the first time, you are required to enter both the previous year’s and current year’s figures. However, for subsequent years’ filings, the figures for the prior year will be pre-populated and you will only need to key in the figures for the current financial year, unless there are amendments to the prior year’s figures.

 

Can I edit the information in the prior year when information is restated?

Answer:

You can restate or reclass prior year comparatives in FS Manager.

 

There are many items in the templates provided. Do I need to key in 0 "zero" if the items are not applicable?

Answer:

No, you are only required to enter data for compulsory items and items that are applicable to your financial statements.

 

Do I need to fill in the boxes in FS Manager or can I just attach the financial statements?

Answer:

If your accounting systems or ERP (Enterprise Resource Planning) systems are able to export XBRL financial statements conforming to ACRA’s taxonomy, the information in the XBRL financial statements loaded will be populated into FS Manager directly. If your financial statements are prepared using other file format (such as Microsoft Word or Excel), you are able to copy and paste the required information into the necessary fields in FS Manager.

 

Why can’t ACRA make the balance sheet and income statement in a cut-and-paste format?

Answer:

The main purpose of implementing XBRL is to ensure that financial information reported can be collated, analysed and reported easily in future. When ACRA started working on the design of the XBRL system, ICPAS and other professionals were consulted on the best way ACRA can capture and interpret such information. ACRA explored many options including the cut-and-paste option. However, if the cut-and-paste option was utilised, there would be no difference from the old system of using PDF. In addition, with the cut-and-paste format, users will be unable to extract data for surveillance or analysis purposes. There will be difficulties in classification of items and the system may not achieve its purpose in capturing and interpreting relevant

 

After we have created the financial statements using FS Manager, can the financial statements be saved in FS Manager tool itself or must we save in our computer?

Answer:

The financial statements created using FS Manager cannot be saved in FS Manager itself. You can save to your local computer drive. Alternatively, you can save your XBRL financial statements on Bizfile for up to a maximum of 1 week.

 

What should I do if I encounter an error message in FS Manager?

Answer:

You can contact ACRA’s Helpdesk at 6248 6028 for assistance. To enable the Helpdesk to respond to the problem quickly, please provide them with the following information:  

  • Nature of the problem;
  • Message displayed on the screen;
  • Date and time that the problem was encountered;
  • Company registration number; and
  • XBRL document

 

How do I remove the Draft label on the PDF document generated from FS Manager?

Answer:

To remove the Draft label, you would need to log in to BizFile using a valid Sing Pass ID and access FS Manager from there to load the XBRL file. The Draft label will not appear on the PDF document generated in this manner.

 

In FS Manager, how do I insert the name of the director(s) signing the Directors’ report and the Statement by Directors?

Answer:

You can select the director(s) who signed off the Directors’ Report and the Statement by Directors from the drop-down list of auditors pre-populated from BizFile after you have logged in to BizFile.

 

This is the second year filing/preparation of XBRL financial statements by my company. Can the prior period figures be pre-populated such that I will only need to key in the current period figures?

Answer:

For subsequent years of filing/preparation of XBRL financial statements for the company, you will be able to pre-populate prior period figures such that you will only need to key in the figures for the current financial period, unless there are amendments to prior period figures. For usage of FS Manager (with BizFile login) Authorised personnel (company officers and their duly appointed agents, i.e. professional firms, service bureau and their employees etc.) can retrieve the prior period XBRL financial statements filed by choosing the ‘Create’ option. Enter the required information for current year filing. When the system detects that the prior financial period start and end dates tally with the prior period XBRL financial statements filed, the system will prompt to ask if you would like to load the prior period (e.g. 2007) XBRL financial statements filed to pre-populate the prior period figures (e.g. 2007) for current period (e.g. 2008) XBRL financial statements. For usage of FS Manager (without BizFile login) If you have a copy of the prior period (e.g. 2007) XBRL financial statements, prior period figures (e.g. 2007) for current period (e.g. 2008) XBRL financial statements may be pre-populated using FS Manager. Step 1: Open prior period (2007) XBRL financial statements in FS Manager. Step 2: Under Enter Company Registration Number, edit the dates of the financial periods in the following example:

Previous Financial PeriodsNew Financial Periods
Current Financial Period Start Date01/01/200701/01/2008
Current Financial Period End Date31/12/200731/12/2008
Prior Financial Period Start Date01/01/200601/01/2007
Prior Financial Period End Date31/12/200631/12/2007

The system will detect that your new prior financial period start and end dates are the same as your previous current financial period start and end dates. If you would like to pre-populate the prior period (2007) figures directly into your new (2008) financial statements, please click on the checkbox of moving the data in the financial statements according to the financial periods stated.

 

What is taxonomy?

Answer:

In general, taxonomy refers to a catalogue or set of rules for classification. In the XBRL context, taxonomy is similar to a dictionary, containing computer-readable definitions of business reporting terms as well relationships between them and links connecting them to human-readable resources (metadata).

 

How does the ACRA taxonomy compare with the IFRS taxonomy?

Answer:

In developing the ACRA taxonomy, ACRA’s consultants have identified key financial items to be included in the ACRA taxonomy. ACRA’s taxonomy is primarily based on the requirements under Singapore Financial Reporting Standards (SFRS), and closely modelled after the International Financial Reporting Standards (IFRS) taxonomy 2006, with some modifications to cater for flexibility and ease of usage.   ACRA’s taxonomy will also enable preparers to add user defined elements to the enumerated list of items.

 

What is an LLP?

Answer: 

An LLP is another form of doing business in Singapore. This means that instead of private listed companies, interested parties may choose to register an LLP to carry out their business activities. The LLP will give the owners the flexibility of operating as a partnership whilst giving them limited liability. It combines the benefits of a partnership with those of private limited companies. However this comes with safeguards in law to minimize abuse and provide protection to parties who deal with the LLP. The LLP is a body corporate and has legal personality separate from its partners. The LLP has perpetual succession. Any change in the partners of a LLP does not affect its existence, rights or liabilities. An LLP is capable of:

  • Suing and being sued in its name
  • Acquiring and holding property in its name;
  • Having a common seal and
  • Doing such other acts and things in its name, as bodies corporate may lawfully do and suffer.

 

What is the difference between an LLP and a general partnership?

Answer: 

A Limited Liability Partnership (“LLP”) allows the partners to retain the flexibility of a partnership agreement but it is not regulated by an identical set of legal principles governing partnerships. In addition, when compared to a partnership, a LLP is required to upkeep its financial records as well as report its financial status of solvency or insolvency annually. Also, as the partners enjoy limited liability, it cannot be terminated as easily as a general partnership. The law provides a comprehensive set of rules to govern winding up of LLPs to ensure protection to the creditors. However as the LLP is a novel concept, we think financial institutions and potential business partners may be more reserved when dealing with it, as compared to a company or general partnership. The law also places restrictions on certain categories of persons (see sections 33 to 37 of the Limited Liability Partnerships Act) who can manage a LLP. There are different advantages and disadvantages of a LLP, as compared to a company and general partnership. Parties concerned should consider the pros and cons of each type of vehicle to decide which suits them the most. The Limited Liability Partnerships Act is available at . We wish you all the best.

 

A manager is responsible for online filing transactions. Does it mean that a professional firm, who did the online filing, be named “manager”?

Answer:

 The law does not mean that the filing agent has to be the manager. The manager is duly defined under the LLP Act. The professional firm is essentially a filing agent who is allowed in law to report on behalf of the LLP.

 

Are the duties of a nominee manager the same as a manager?

Answer:

There is no such position as a “nominee manager” in an LLP. Anyone who is named as the manager will have to perform the duties and carry out the obligations of a manager as set out in the LLP Act

 

Can a foreigner be appointed as the local manager?

Answer: 

Yes provided he has an Employment Pass or a Dependent’s Pass.

 

Can a manager be an employment pass holder who is employed in another company?

Answer: 

The manager may wish to check with MOM on whether this is allowed.

 

Can there be more than 1 manager?

Answer:

 Yes

 

I am a Singapore PR. Can I be appointed as the manager or partner in an LLP?

Answer: 

Yes.

 

If the LLP has 2 partners and one of them dies/bankrupts, does the sole partner need to appoint another partner? Is there any time frame to do so?

Answer: 

Yes, the sole partner will need to appoint another partner and the deadline is 2 years.

 

Is it mandatory to appoint a manager for the LLP?

Answer: 

Yes.

 

Is there any limit to the number of partners?

Answer: 

No, there is no limit. The minimum is 2.

 

Is there any need for partnership agreement?

Answer: 

There is a need for an LLP agreement. In the absence of one, the model agreement enacted under Schedule One to the LLP Act shall apply.

 

 The LLP must have a ‘resident” manager can there be two managers? Can one manager be based overseas (like a regional manager)?

Answer: 

Yes, to both questions.

 

What are the criteria for being appointed as a manager?

Answer: 

At least one manager must be ordinarily resident in Singapore. All managers appointed must be natural persons and above the age of 18. The manager of the LLP must not be:

  1. an undischarged bankrupt (unless he has obtained Leave of the High Court or the written permission of the Official Assignee);
  2. disqualified as an unfit manager of insolvent LLPs under section 34 of the LLP Act;
  3. disqualified as a manager of a former LLP wound up on grounds of national security or interest and disqualified to act as a manager;
  4. disqualified as a person who was convicted of offences involving fraud or dishonesty, or other offences connected with formation or management of a LLP;
  5. disqualified under Sections 149, 149A or 154 of the Companies Act.

 

What is the responsibility and liability of being a manager?

Answer: 

The duties and responsibilities are set out in the various provisions in the LLP Act.

 

What status is considered locally resident? Is Employment Pass Holder or Work Permit Holder sufficient? What about dependent pass and permanent resident?

Answer: 

We recognize the followings as “locally resident” – Singapore citizens, Singapore PRs, Employment Pass Holders & Dependent Pass Holders.

 

Who can be the partners in an LLP?

Answer: 

Any individual or body corporate may be a partner in a LLP. This includes a natural person, company, foreign company or another LLP.

 

Must the Medisave payments of all the partners be up-to-date when I submit the application to register a new LLP?

Answer: 

Yes. To check on the Medisave status of the partners, you may contact the CPF Board at 1800-2271188 or you may log into the CPF website at www.cpf.gov.sg.

 

Since partners of LLP include a corporate body, does this mean that the corporate body needs to have a medisave account so as to facilitate e-filing of any transactions?

Answer: 

We do not check the Medisave status of corporate partners.

 

Can a LLP be converted to a private limited company? If so, then how? Does it have to be closed with the assets and liabilities be taken over by a private limited company? Can the new company retain the same name?

Answer: 

An LLP cannot convert to a company. An LLP can be wound up or struck off. As for whether a new company can use the same name as the terminated LLP, the provisions on names under the Companies Act shall apply.

 

Conversion to LLP – How do you prepare the final sets of accounts?

Answer: 

We are not in a position to answer this. Please seek advice from professionals who are preparing the accounts.

 

For conversion from private limited company to LLP, must the private limited company file its audited/unaudited accounts up to the date of conversion?

Answer: 

We would advise the company to fulfill all its outstanding filing obligations before converting into an LLP.

 

How about conversion of sole-proprietor to LLP, is there a need to find another partner?

Answer: 

You need to add the partner to the sole-proprietorship before you can convert it into an LLP.

 

If a company holds properties and wants to be converted to an LLP. What is the implication in stamp duties?

Answer: 

Please check with IRAS.

 

Is there a requirement to the cessation of company secretaries and auditors before conversion? Conversion to Company

Answer: 

No, there is no such requirement.

 

What will be the status of the business or company after the conversion?

Answer: 

The status will show as “converted to LLP” and the date of conversion will be the date of registration of the LLP.

 

Will I be issued with a new registration number upon conversion?

Answer: 

Yes, you will be issued with an LLP Registration Number

 

How does the public know the amount of liability committed by each partner in a LLP?

Answer: 

It is not a legal requirement to report to ACRA the amount committed by the partners as a LLP is a business structure. The public can find out its solvency status as LLPs are required to file annual solvency status.

 

Partner is personally liable for his own wrongful acts or omissions

Answer:
  • What happens if the wrongful act/omission is due to negligence/careless error rather than fraudulent intent? Must the partner be personally liable in such instance or the LLP as a whole?
  • Will the covering partner (in legal/accounting practice) in the absence of the actual partner (who is on leave etc), be held personally liable.

Personal liability shall continue to attach to partners under the law of Tort. To understand the implications of the duties and liabilities under the law of Tort, you are encouraged to seek further advice from professionals or locate them legally

 

What are the fiduciary duties for partners and managers? Personal Liability of Partners

Answer:

The LLP Act does not prescribe fiduciary duties for partners and managers. However there is also the issue of whether the concept of “fiduciary duty” which features in a variety of relationships such as those between trustees and beneficiary, guardian and ward, agent and principal, attorney and client, directors and corporations as well as among members of a unlimited liability partnership exist. Such fiduciary obligations, developed by equity are complex by nature. The LLP Act states that otherwise provided by the Act, the law relating to partnership shall not apply to a LLP. The LLP Act already provides specifically for limited liability of partners, personal liabilities in tort in respect of partners as well as powers of partners to bind of LLPs. As time progresses, the development of case laws will give greater definition to this area of law.

 

Will the partners of the LLP be held personally liable for the debts incurred by the LLP?

Answer:

The partners of the LLP will not be held personally liable for any business debts incurred by the LLP. However a partner may be held personally liable for claims from losses resulting from his own wrongful act or omission. But a partner shall not be personally liable for such wrongful acts or omissions of any other partner of the LLP.

 

Is an audit of the accounting required?

Answer:

The LLP Act does not mandate audit for LLPs.

 

Is an LLP required to prepare and submit audited accounts to ACRA?

Answer:

No but the LLP is required to keep accounting and other records for 7 years

 

Must accounts be kept in accordance with FRS?

Answer:

The LLP Act does not prescribe the accounting standards to be adopted. But the accounts must still satisfy the “true and fair” view test.

 

Under what circumstances will the Registrar require the accounts to be audited?

Answer:

The LLP Act does not empower the Registrar to require audited accounts as the law does not mandate financial reporting.

 

When the LLP is asked to prepare accounts, do they need to comply with FRS?

Answer:

The LLP Act does not prescribe the accounting standards to be adopted. But the accounts must still satisfy the “true and fair” view test.

 

Annual Declaration – if it is insolvent, is it an offence to continue trading? – does it affect the LLP status of the partners i.e. unlimited liability of partners?

Answer:

Like the Companies Act, the LLP Act prohibits one from trading if he is a party in the contracting of a debt and he has no reasonable ground of expectation of being able to pay the debt. It is also an offence to carry on trading if it falls within the scope of fraudulent trading. One may face criminal sanctions as well as personal liability for the debts incurred, if convicted.

 

When must this Annual Declaration be lodged?

Answer:

The first Annual Declaration must be lodged within 15 months from the date of registration. Subsequent declarations must be lodged once in every calendar year but not more than 15 months after the date of the last declaration.

 

When submitting the annual declaration is there any financial statements e.g. Balance Sheet, profit and loss that need to be signed and scanned to ACRA, regardless whether the LLP is solvent or insolvent.

Answer:

The manager has to submit the Annual Declaration via an online transaction. No other documents is needed to be attached to the Annual Declaration.

 

Can I start my business now that I have registered a limited liability partnership with ACRA?

Answer:

You may commence business once the limited liability partnership has been registered with ACRA. This is on condition that you do not require any licences/approvals from other government agencies in order to carry out your business activities. For more information on the types of licences/approvals that you may require, please visit www.business.gov.sg.

 

I have registered a limited liability partnership with ACRA. Can I carry out my business now?

Answer:

You may commence business once the limited liability partnership has been registered with ACRA. This is on condition that you do not require any licences/approvals from other government agencies in order to carry out your business activities. For more information on the types of licences/approvals that you may require, please visit www.business.gov.sg.

 

When can I commence business?

Answer:

You may commence business once the limited liability partnership has been registered with ACRA. This is on condition that you do not require any licences/approvals from other government agencies in order to carry out your business activities. For more information on the types of licences/approvals that you may require, please visit www.business.gov.sg.  

 

Can a LLP be closed in a similar manner as that of a private limited company such as being struck-off rather than be wound up (this will reduce business costs)?

Answer:

Yes. You may submit an online application to strike off the LLP.

 

Can an LLP be struck off within one month after incorporation?

Answer:

Yes, the application can be submitted online

 

Compulsory winding up of LLP- will the partners be disqualified from being partners if there are 2 or more black marks against them?

Answer:

Please refer to Sections 33 to 37 of the LLP Act for the details of disqualifications.

 

How can I close the LLP?

Answer:

You may wind up the affairs of the LLP voluntarily. The LLP may also opt for creditors voluntary winding up. The LLP can also be wound up under an Order of Court. The LLP may apply to strike its name off the register pursuant to Section 28 of the LLP Act.

 

What are the requirements required to strike off an LLP?

Answer:

Please refer to ACRA homepage www.acra.gov.sg for the guidelines.

 

Can a LLP be converted back to that of a Company?

Answer:

Currently, there is no provision for the conversion from a LLP back to a Company.

 

Can a partner of LLP be a partner of another LLP?

Answer:

Yes

 

Can a wholly owned subsidiary of head office be converted to a LLP?

Answer:

No, because there is only one shareholder. LLP would need to have at least 2 partners. However, if the number of shareholders in the wholly owned subsidiary is increased to 2 or more shareholders, conversion would then be possible.

 

Can LLP have sleeping partners?

Answer:

Yes.

 

Can professional practices register as LLP?

Answer:

The LLP Act does not restrict any professional practices from registering as a LLP. However professional practices have to check against their legislation regulating their respective professions to ensure that this is allowed.

 

Does a foreigner-controlled LLP need to pay medisave?

Answer:

Only Singapore citizens and PRs are required to meet the minimum medisave paid-up requirement.

 

For taxation, will losses, capital allowances, investment allowances be carried forward?

Answer:

ACRA does not handle taxation issue, please refer to www.iras.gov.sg or seek clarifications with IRAS directly.

 

How are the accounts of a LLP going to be accounted for after a company has converted to a LLP? How about GST registered co?

Answer:

The LLP legislation does not prescribe the accounting standards to be used. The LLP Act mandates proper record keeping of accounts to enable the true and fair view of accounts to be presented. We think LLPs would apply Singapore FRS, unless there are exceptional reasons to rely on a foreign accounting standard.

 

How is a LLP taxed? How is a company taxed after being converted to a LLP?

Answer:

There is no corporate tax rate for LLPs. For further details, we advise members to seek clarifications from IRAS directly.

 

If a company is a large corporation in terms of paid up capital, is it difficult to convert to LLP?

Answer:

It is administratively easy to convert online, but the internal conversion process within the company may be simple or complex depending on the size of the entity that wishes to convert.

 

If the directors of company refuse to convert into LLP, but Shareholders want to convert the company, is the company still be able to be converted to LLP?

Answer:

Yes, the decision lies with the shareholders.

 

If the Manager files with ACRA that it is unable to pay debts, what will happen after that?

Answer:

It is up to the creditors to decide what they want to do with regards to the debts that are owed to them by the LLP.

 

Is LLP inheritable, that is, pass the business down to the son?

Answer:

Under the LLP Act, a partner of a LLP shall cease to be a partner of a LLP upon the death of the said partner. Where this happens, unless otherwise provided in the LLP agreement, his personal representative or liquidator (as the case may be) shall be entitled to receive from the LLP an amount equal to the former partners capital contribution to the LLP and his right to share in the accumulated profits of the LLP after deduction of losses of the LLP and determined at the date the deceased partner ceased to be a partner. The personal representative or liquidator shall have no right to interfere in the management of the LLP.

 

It is unfair for creditors as the current partnerships can evade liability by just converting to LLP? What is the rationale/remedy for this?

Answer:

The current regulation is that as long as there are no outstanding charges, conversion is possible if the relevant requirements are met. Even after the conversion date, the partners continue to be liable for all the liabilities incurred by the partnership before the conversion date. Any liabilities incurred after the conversion shall be borne by the LLP.

 

Since company allows for

Answer:

The LLP introduces a business structure that combines the advantage of the flexibility to run it like a partnership of two or more owners with limited liability accorded to the partners. It is not meant to apply to a sole proprietor. If the concept to a Limited Liability Sole Proprietorship is expanded, it will have far reaching implications on our legal framework for business structures. This is also not consistent with leading jurisdictions currently. A regulatory framework of an one director company differs from that of the LLP too.

 

What are the benefits of converting from Private Limited companies to LLP?

Answer:

Lower cost is one of the benefits, as there is no need to do audited accounts etc. However, there may be disadvantages as well and one may have to think through more carefully whether one should trade or do business with an LLP since it has limited liability.

 

What happens to shareholdings of shareholders converted from Private Limited to LLP? If person A holds 10% and person B holds 90% of shares in the company, what will happen when converted to LLP?

Answer:

This will depend on the internal agreements between the newly converted partners and would most probably be reflected in the LLP agreement.

 

What happens to the amount owing to creditors when partnership is converted into LLP?

Answer:

All the liabilities will be frozen and retained at the point of conversion into LLP. The creditors can still sue the partners or they can choose to sue the LLP.

 

What kicks in once a company declares that it is insolvent?

Answer:

Our records will be updated to capture this information. It is up to the creditors to decide what they want to do with regards to the debts that are owed to them by the LLP.

 

How income is assessed?

Answer:

Income is assessed on a preceding year basis. This means that the basis period for any Year of Assessment (YA) generally refers to the financial year ending in the year preceding the YA.

 

What is the meaning of Companies with December financial year end?

Answer:

Your company’s accounts are to be prepared up to 31 December each year. The basis period for each YA is the preceding calendar year ended 31 December. Example, your company’s basis period for YA 2008 is from 1 Jan 2007 to 31 Dec 2007.

 

What is the meaning of Companies with non-December financial year end?

Answer:

Your company’s accounts are prepared up to the financial month for each year. Assuming your financial year end is 30th June, your accounts are prepared up to 30th June each year. The basis period for each YA is the preceding accounting year ended 30th June. Example, your company’s basis period for YA 2008 is from 1st Jul 2006 to 30th Jun 2007.

 

What is the procedure of taxing a company(both foreign and local) in Singapore?

Answer:

A company, regardless of whether it is a local or a foreign company, will be taxed on its:  

  • Income accruing in or derived from Singapore; or
  • Income received in Singapore from outside Singapore

 

How to file ECI? When and how to file income?

Answer:

For details on filing ECI, refer to Filing Estimated Chargeable Income (ECI).

 

How to file Form C ? When and how to file income?

Answer:

For details on the filing and completion of Form C, refer to Filing Income Tax Form (Form C). You may also refer to the guide on “Essential Information for Newly Incorporated Companies” (287KB)

 

What is Estimated Chargeable Income (ECI) ? When and how to file income?

Answer:

Your company has to furnish an estimate of its chargeable income known as Estimated Chargeable Income (ECI) within three months from the end of its accounting period. For example, if your company’s financial year end is 31 Dec, you have to furnish ECI for the accounting period ending 31 Dec 2007 by 31 Mar 2008.

 

What is Form C? When and how to file income?

Answer:

Your company is required to declare its income by completing an Income Tax Form for companies, known as Form C, each year. The due date for filing of Form C for each YA is as follows:

YADue date
2007 and before31 Jul of each year
2008 onwards30 Nov of each year*

* IRAS is pleased to inform that in response to feedback from companies, 30 Nov will be the filing deadline from Year of Assessment 2009 instead of 31 Oct as announced previously. When will the Form C be sent to my company IRAS will send the first Form C to a newly incorporated company in the second year following the year of incorporation. Example:

Year of incorporationYear in which your company will receive its first Form CRemarks
20072009Form C for Year of Assessment (YA) 2009 will be sent to your company in Mar/Apr 2009.This Form C is for your company to declare its income for the financial year ending in year 2008.

Thereafter, Form C for subsequent YAs will be sent to your company in Mar/Apr every year. Do I need to request for my company’s first Form C to be sent earlier You may need to request for the first Form C to be sent to you earlier, that is, in the year immediately after the year of incorporation (instead of the second year following the year of incorporation) under certain circumstances. Please note that income is assessed on a preceding year basis. This means that the basis period for any YA generally refers to the financial year ending in the year preceding the YA. Example 1 Your company is incorporated on 1 Jul 2007 and its financial year end is 30 Jun. If your company’s first set of accounts covered the period from the date of incorporation (1 Jul 2007) to 30 Jun 2008, your accounts is for YA 2009. You do not need to request for Form C for YA 2008. Example 2 Your company is incorporated on 1 Jul 2007 and its financial year end is the 31 Dec.

  • If your company’s first set of accounts covered the period from the date of incorporation (1 Jul 2007) to 31 Dec 2007, your accounts is for YA 2008. In this case, you have to request for Form C for YA 2008.
  • You can request for Form C via the form Request for Form C for Newly Incorporated Companies or Companies Granted Waiver to Submit Form C/Change of Particulars (36KB).
  • If your company’s first set of accounts covered the period from the date of incorporation (1 Jul 2007) to 31 Dec 2008, your accounts is for YA 2009. In this case, since the first set of accounts is for YA 2009, you do not need to request for Form C for YA 2008. Your accounts for the period from 1 Jul 2007 to 31 Dec 2008 is to be submitted with the Form C for YA 2009, which will be sent to your company in Mar/Apr 2009.When you file Form C for YA 2009, please note that you need to submit separate tax computations for YA 2008 and YA 2009 since your accounts covered a period of more than 12 months. You have to apportion the income for the period from 1 Jul 2007 to 31 Dec 2007 (YA 2008) and 1 Jan 2008 to 31 Dec 2008 (YA 2009). When submitting Form C for YA 2009, please attach a covering letter stating that you have enclosed the tax computations for YA 2008 and YA 2009.

 

When to file?

Answer:

The company has to file a complete set of returns (i.e. Form C, audited/unaudited accounts and tax computation) by the following dates:

Year of AssessmentFiling deadline
200731 Jul 2007
200830 Nov 2008
2009 and thereafter30 Nov of each year*

* IRAS is pleased to inform that in response to feedback from companies, 30 Nov will be the filing deadline from Year of Assessment 2009 instead of 31 Oct.

 

Claiming Double Tax Relief – What is double tax relief (DTR)?

Answer:

Foreign income earned by a Singapore company may be subjected to taxation twice. Once in the foreign country, and a second time when the foreign income is remitted into Singapore. A double tax relief (DTR) is the credit relief provided for under an Avoidance of Double Taxation Agreement (DTA) to reduce this double taxation. A DTR is granted by allowing the Singapore tax resident company to claim a credit for the amount of tax paid in the foreign country against the Singapore tax that is payable on the same income. A company is a tax resident of Singapore if the control and management of its business is exercised in Singapore.

 

How long will it take after submitting the Online COR applications via myTax Portal?

Answer:

If your application meets the requirements, you will receive a COR by post within three working days. If all requirements are not met, our officers will need to review the application and inform you of the outcome of your application within seven working days. However, if you have submitted a paper application for COR, we will inform you within 14 working days from the day we receive the duly completed and signed application form.

 

How to apply? If you receive foreign income?

Answer:

Companies can apply for a COR either:

  • Electronically via myTax Portal. The company staff or tax agent has to be authorised via the e-Services Authorisation System (EASY) before a COR can be applied through myTax Portal; or
  • By submitting an application form.
  • Download the application form for certificate of residence (44KB); or
  • Request a fax copy of the application form by using the self-help options at the Corporate Tax Integrated Phone Service at 1800-356 8622.

 

How to calculate DTR? If you receive foreign income

Answer:

The amount of DTR is dependent on the nature of income and subject to the specific terms and conditions as specified in the DTA with the relevant treaty country. DTR = Lower of:

  • the actual amount of foreign tax paid; or
  • the amount of Singapore tax attributable to the foreign income (net of expenses)

For trade income, if the company has a permanent establishment (PE) overseas and the income is derived through that PE, the income would generally be taxed overseas. A DTR would be granted only if the income is also taxed in Singapore. For passive income (e.g. interest, dividend etc) Passive income derived from outside Singapore will be taxed in Singapore in the year of remittance.

 

How to claim DTR? If you receive foreign income?

Answer:

The claim for DTR should be made when you file your annual income tax return (Form C). The DTR claim should be shown in the company’s tax computation. You will need to forward documentary proof (e.g. withholding tax receipts, letter from the foreign tax authority, or dividend vouchers) to show that the remitted income has been subjected to tax in the treaty country before DTR claims can be considered.

 

How to claim for tax exemption? If you receive foreign income?

Answer:

You are required to make a declaration in your income tax returns by giving the nature and amount of the foreign-sourced income that was remitted to Singapore. You are also required to complete the Declaration Form for Foreign-Sourced Income Received in Singapore From 22 Jan 2009 to 21 Jan 2010 (60KB) for submission to IRAS. Although you have to state the use of the foreign income in the declaration form, the usage of such foreign income will not affect the claim for tax exemption.

 

What if you are a Singapore tax resident? If you receive foreign income?

Answer:

When your company earns foreign income from a treaty country, you may wish to claim the benefits under the DTA that entitles a company not to pay tax or to pay tax at a reduced rate in the foreign country. To enjoy this benefit, you would need to submit a COR to the foreign country to prove that the company is a Singapore tax resident. To find out more about the application process, please refer to Applying for Certificate of Residence. When you receive foreign income in Singapore, you may be taxed on the income. In the case where the benefit under the DTA is not an exemption of tax, but a reduction of tax rate, the Singapore company will also suffer tax in the foreign country. In this way, the same income is subjected to taxation twice. The DTA provides relief for this double taxation by allowing the Singapore company to claim a credit of the foreign tax suffered against its Singapore tax payable on the same income. This credit is known as a double tax relief (DTR). To find out more about this relief, please refer to Claiming Double Tax Relief.

 

What if you are a tax resident of a treaty country? If you receive foreign income?

Answer:

Tax residents of our treaty partners can also enjoy the benefits of the DTAs when they derive income from Singapore. To claim this benefit, they have to prove that they are a tax resident of the treaty country by submitting to IRAS, a completed Certificate of Residence from Non-Residents (Claim for relief from Singapore Income Tax Under Avoidance of Double Taxation Agreement) that is duly certified by the tax authority of its the country of residence. Download the template of a Certificate of Residence from Non-Residents (Claim for relief from Singapore Income Tax Under Avoidance of Double Taxation Agreement) (165KB)

 

What is a COR? If you receive foreign income?

Answer:

A COR is a letter certifying that the company is a tax resident in Singapore for the purpose of claiming benefits under the Avoidance of Double Taxation Agreement (DTA). A company is a tax resident in Singapore if the control and management of its business is exercised in Singapore. A Singapore tax resident company can enjoy the benefits in the DTAs that Singapore has concluded with other treaty countries.

 

What is an Avoidance of Double Tax Agreement? If you receive foreign income?

Answer:

An Avoidance of Double Taxation Agreement (DTA) is an agreement signed between Singapore and another country (a treaty country) which serves to relieve double taxation of income that is earned in one country by a resident of the other country. It makes clear the taxing rights between Singapore and her treaty partner on the different types of income arising from cross-border economic activities between the two countries. The DTA also provides for reduction or exemption of tax on certain types of income. Only Singapore tax residents and tax residents of the treaty country can enjoy the benefits of a DTA. To find out who are our treaty partners, please refer to the List of Avoidance of Double Tax Agreements.

 

What is Taxation for Resident Company versus Non-resident Company? If you receive foreign income?

Answer:

In Singapore, the tax residence status of a company depends on where the control and management of its business is exercised. A company is tax resident in Singapore if the control and management of its business is exercised in Singapore. private listed companies Generally, a Singapore branch of a foreign company is not treated as a Singapore tax resident since the control and management is vested with an overseas parent company. The basis of taxation for a resident company and non-resident company is generally the same. However, there are some benefits that a resident company can enjoy that a non-resident would not. These include:

  • It is entitled to benefits conferred under the Avoidance of Double Taxation Agreements (DTA) that Singapore has concluded with treaty countries.
  • It can enjoy tax exemption on foreign-sourced dividends, foreign branch profits, and foreign-sourced service income under section 13(8) of the Income Tax Act.

It can enjoy the tax exemption scheme for new start-up companies. Applying for Certificate of Residence (COR). For more on Foreign Branch Incorporation, click here. Or click here to find out the various types of Company Incorporation in Singapore.

 

What is the status of Remittance during 22 Jan 2009 to 21 Jan 2010? If you receive foreign income?

Answer:

There is an expansion of scope in the exemption of foreign-sourced income to help companies tap on financing from their overseas investment and operations to meet their business financing needs in Singapore. As announced in the 2009 Budget Statement, tax exemption will be granted on all foreign-sourced income accrued on or before 21 Jan 2009 to a resident company and which is received or deemed received in Singapore from 22 Jan 2009 to 21 Jan 2010 (both dates inclusive). For the purpose of the tax exemption on foreign-sourced income remitted to Singapore during the said period, the “subject to tax” and “foreign headline tax rate” conditions specified in Section 13(9) of the Income Tax Act will be temporarily lifted. All expenses incurred in respect of foreign-sourced income received in Singapore which qualifies for tax exemption shall be deducted against those foreign-sourced income, and will not be available for deduction against any other taxable income. For details, please refer to the e-Tax Guide, Temporary Liberalisation of Income Tax Exemption for Foreign-Sourced Income Received in Singapore From 22 Jan 2009 to 21 Jan 2010 (93KB)

 

When will I receive the COR? If you receive foreign income?

Answer:

The fastest way to obtain a COR is to apply for it online via myTax Portal. To learn how to do so, you may refer to the user guides for COR.

 

Who can apply? If you receive foreign income?

Answer:
  • You can apply only if your company is a tax resident in Singapore; and
  • The income is remitted or going to be remitted into Singapore and subject to tax in Singapore.
  • This is not applicable to a nominee company as it is not the beneficial owner of the income derived from the treaty country. A nominee company is a company that is formed for the purpose of holding shares on behalf of the beneficial owners of the shares.
  • This is not applicable to a Singapore branch of a foreign company since the control and management of which is vested with the overseas parent company.
  • This is not applicable to a dormant company.
  • This is not applicable to a foreign-owned* company which is an investment-holding company with purely passive sources of income or receiving only foreign-source income. However, COR may be issued provided that such a company can furnish the reasons for setting up an office in Singapore and provide evidence to substantiate that its control and management is in Singapore. IRAS also reserves the right to request for additional information on the company.
  • The application is for back Years of Assessment (YA), the current YA or the next YA.

*A foreign-owned company refers to a company where 50% or more of its shares are held by foreign companies/shareholders.

 

Who can claim DTR? If you receive foreign income?

Answer:

The company must satisfy all of the following conditions in order to qualify for a claim for DTR:

  • The company is a tax resident in Singapore for the relevant basis year;
  • Tax has been paid or is payable on the same income in the foreign country in accordance with the provisions of the DTA; and
  • The income is subject to taxation in Singapore.

 

Why do I need a COR? If you receive foreign income?

Answer:

You need a COR to enjoy the benefits under the DTAs that Singapore has concluded with other treaty countries. When your company derives income from a foreign person or company, you may be subject to taxes in that foreign country. However, if the foreign country has concluded a DTA with Singapore, the DTA may allow Singapore tax residents to enjoy a reduced tax rate or an exemption of tax on the income in that foreign country. To enjoy this benefit, you have to submit a COR to the foreign tax authority to prove that your company is a Singapore tax resident.

 

Will I get any Exemption on Foreign Sourced Income?

Answer:

A Singapore tax resident company can enjoy tax exemption on its foreign-sourced dividends, foreign branch profits, and foreign-sourced service income that is remitted into Singapore on or after 1st Jun 2003 if the following conditions are met:

  • The highest corporate tax rate (headline tax rate) of the foreign country from which the income was received is at least 15%; and
  • The foreign income had been subjected to tax in the foreign country from which they were received. The rate at which the foreign income was taxed can be different from the headline tax rate.

To enjoy the tax exemption, a company has to furnish the following information in its Form C and Appendix for Additional Information on Income and Deduction (Form IRIN 301):

    • Nature and amount of income received;
    • Country from which the income is received;
    • Headline tax rate of the foreign country; and
  • Confirmation that foreign tax has been paid in the country from which the income was received. Otherwise, company has to prove that income was exempt in the foreign country due to incentive granted for substantive business.

 

As How do I get single Acknowledgement Statement for ECI filing for multiple clients? Filing Estimated Chargeable Income (ECI)

Answer:

You will have to e-File the ECI for each company separately if you wish to receive single acknowledgement statement.

 

As a tax agent, can I e-File ECI for multiple clients in one submission? Filing Estimated Chargeable Income (ECI)

Answer:

Yes. You can e-File for up to a maximum of six clients in one submission. A consolidated acknowledgement will be given for the cases e-Filed.

 

Can I e-File ECI if the company’s accounting month shown on the e-Filing screen or the ECI letter received from IRAS is incorrect? Filing Estimated Chargeable Income (ECI).

Answer:

Yes. You can proceed to e-File the ECI or furnish ECI via ECI Form. Please write in to inform us on the change in the company’s accounting month or complete and fax the form “Request For Form C For Newly Incorporated Companies or Companies Granted Waiver to Submit Form C /Change Of Particulars” at + 65 6351 4360.

 

Filing Estimated Chargeable Income (ECI) Active?

Answer:

Alternatively, you may write in to let us know your reason for making the revision and provide your revised ECI amount. Please note that where there is a significant difference between the ECI provided and the chargeable income reported in the Form C, we may require the company to provide an explanation.

 

How to complete the ECI Form ? Filing Estimated Chargeable Income (ECI)?

Answer:

Section A Section A is only applicable if you are claiming tax exemption for new start-up companies. You do not need to complete this section if your company does not qualify for tax exemption for new start-up companies (e.g. your company is not a newly incorporated company and you are filing ECI for your company’s fourth or subsequent YA ). Refer to Tax Exemption Scheme for New Start-up Companies for more details on this scheme. How to claim for tax exemption for new start-up companies? Fill in “1” in the first box to indicate “Yes” to confirm that your company satisfies all the qualifying conditions; and Fill in your company’s first YA in YYYY format Section B Fill in your company’s revenue figure. Please refer to Declaration of Amount of Revenue in ECI Form for more information. Section C Fill in your company’s ECI amount in the first row, in the box next to the pre-filled prevailing corporate tax rate. Please refer to Things to note when you declare ECI amount. Section D (only applicable to ECI Form with request for payment by instalments) Under payment plan:

  • Fill in “A” if you are requesting for GIRO plan
  • Fill in “B” if you are requesting for self-pay plan

 

How to file? Filing Estimated Chargeable Income (ECI)?

Answer:

You may file your company’s ECI:

  • electronically via myTax Portal; or
  • by completing and submitting an ECI Form.
  • To encourage you to e-File, the number of instalments you get for e-Filing your company’s ECI is more than that for paper-filing.

With effect from Year of Assessment (YA) 2008, the number of instalments allowed to e-Filers and paper-filers of ECI are as follows:

No. of instalments given
ECI filed within:e-filersPaper-filers
1 month from accounting year-end105
2 months from accounting year-end84
3 months from accounting year-end63
After 3 months from accounting year-end
No instalments allowed

For e-Filers, e-File by the 26th of each qualifying month to enjoy the maximum number of instalments allowable for that month. For paper-filers, your ECI Form should reach us by the 24th of each qualifying month to enjoy the maximum number of instalments allowable for that month. Example: December year-end company

e-File by

Number of instalments

Paper-file by

Number of instalments

26th January

10

24th January

5

26th February

8

24th February

4

26th March

6

24th March

3

After 26th March

No instalments

After 24th March

No instalments

  If your company qualifies for instalments and has previously paid its tax by instalments, the instalment plan will be sent to your company together with your Notice of Assessment (NOA). However, if your company has not paid its tax by instalment previously, or your company is filing ECI for the first time, instalments will not be given automatically. In this case, if you wish to pay your tax by instalment, you will need to request for the instalment plan.  

  • Please inform us of your preference to pay tax by instalments before you file your ECI. You can email us at ctpayment@iras.gov.sg or contact us at telephone number 1800 356 8622.
  • For e-filers, if we update your request for instalments before you e-File, the instalment plan will be sent to your company together with the NOA after you e-File.
  • For paper filers, you need to complete and submit the ECI Form (with request for payment by instalments). i.e. Form IRIN322. Please note that to enjoy the maximum number of instalments allowable for each qualifying month, this form must reach us by the 24th of that month.
  • If you wish to pay by GIRO, you must complete and submit GIRO Application Form.
  • Please note that companies that are not registered in Singapore do not qualify for payments by instalments.
  • For more details on payment, refer to How to pay.

Things to note when you declare ECI amount

  • The amount of ECI declared must be before the deduction of the exempt amount under partial tax exemption or tax exemption scheme for new start-up companies. We will automatically allow the appropriate exempt amount.
  • If your ECI amount is nil (e.g. your company is in a loss position or it is dormant and has no income), you must declare “0” ECI amount.
  • If you are claiming unutilised losses, capital allowances or donations brought forward from previous YA, your ECI amount must take into account the unutilised losses, capital allowances, or donations claimed.
  • If you are claiming loss items under Group Relief System, the ECI amount must take into account the loss items transferred or claimed under group relief.
  • If there is a claim for tax deducted at source on franked dividends, the ECI amount filled in must be the regrossed amount calculated based on the net tax payable after deducting the tax deducted at source on franked dividends. For an example on how to calculate regrossed ECI amount, refer to the Explanatory Notes to ECI Form.
  • The first row, with the pre-filled prevailing corporate tax rate, is for you to fill in your ECI amount to be taxed at the prevailing corporate tax rate.
  • The second row is for you to fill in ECI amount to be taxed at a concessionary tax rate of 10%. You do not need to fill in “0” in the second row if your company does not have any income to be taxed at the concessionary rate of 10%. That is, the box in the second row must be blank if the tax rate of 10% is not applicable.
  • The third row is for you to fill in income to be taxed at any other rate, which is different from the pre-filled prevailing corporate tax rate or 10%. You do not need to complete the third row if your company does not have any income to be taxed at a rate other than the prevailing corporate tax rate or 10%. That is, the third row must be blank if it is not applicable.

 

How to submit ECI Form? Filing Estimated Chargeable Income (ECI)?

Answer:

You can submit the completed and signed ECI form to us by post or fax. Our fax number is +65 6351 4360. Our mailing address is: Inland Revenue Authority of Singapore 55 Newton Road Revenue House Singapore 307987 We do not send acknowledgement for ECI Forms received. Your company will receive the estimated assessment once we have processed your ECI Form. However, please note that we do not issue Notice of Assessment to your company if you have declared a “0” ECI amount.

 

If I am authorised as a Filing Estimated Chargeable Income (ECI)?

Answer:

As a “Preparer”, although you can enter the ECI amount for your company in myTax Portal, you cannot submit the filing details to IRAS. You have to submit your e-filing details to the person authorised as your “Approver”. Only the “Approver” can submit the filing details to IRAS. If your company wants you to file ECI to IRAS, your company must authorised you as an “Approver” instead of “Preparer” so that you can submit the filing details to IRAS.

 

What if I don’t file? Filing Estimated Chargeable Income (ECI)?

Answer:

If your company does not submit the ECI within three months from the end of its financial year, we may issue a Notice of Assessment (NOA) based on our estimation of your company’s income. If you do not agree with our estimated assessment, you must object in writing within 30 days from the date of the NOA. Otherwise, the estimated assessment will be treated as final, even if the actual income based on your Form C and accounts submitted subsequently is lower than our estimates. This means we will not amend your estimated assessment based on your Form C and accounts since there is no valid objection to the estimated assessment within the stipulated time.

 

What if I e-Filed the ECI beyond three months after the end of the company’s accounting period? Filing Estimated Chargeable Income (ECI)?

Answer:

You can e-File the ECI if no assessment for the YA has been issued to the company. However, no instalments will be granted if a company files its ECI beyond three months after the end of its accounting period.

 

What if the company is Investment Holding Company? Filing Estimated Chargeable Income (ECI)?

Answer:

YA 2005 to 2008 If your company is an investment holding company deriving only non-trade income (e.g. interest, dividend or rental income), you do not need to furnish ECI if your non-trade income is to be assessed on a calendar year basis, i.e. assessment is based on the income derived for the period of Jan to Dec for each year, regardless of the financial year end of the company. However, if your non-trade income is to be assessed on an accounting year basis, your company would need to file ECI within three months after the end of its financial year-end. For details on assessment of non-trade income on accounting year basis, refer to “Simplification of Income Tax Rules and Procedures – Assessment of Non-Trade Income and Deduction of Approved Donations on an Accounting Year Basis” (132KB). YA 2009 onwards Starting from YA 2009, all non-trade income of a company must be assessed on an accounting year basis. This means that all investment holding companies must file ECI within three months after the end of its financial year-end. For more details, you may refer to the Supplementary Circular “Simplification Of Income Tax Rules And Procedures – Assessment Of Non-Trade Income And Deduction Of Approved Donations On An Accounting Year Basis ” (125KB). Your company needs to furnish Estimated Chargeable Income (ECI) within three months from the end of its financial year. For example:

E.g. noFinancial year-endDue date for filing ECIPeriod covered in the accountsYear of Assessment (YA)Due date for filing ECI for that particular YA
131 Dec31 Mar of the following year1 Jan 2009 to 31 Dec 2009201031 Mar 2010
231 Mar30 Jun1 Apr 2009 to 31 Mar 2010201130 Jun 2010

If you submit your company’s ECI within the qualifying period, you can pay your tax in instalments. It is better for your company to submit the ECI earlier, as the earlier the ECI is submitted, the higher the number of payment installments given. To encourage you to e-File, with effect from YA 2008, the number of instalments given to those who file ECI electronically is more than that given to those who file ECI using paper ECI Forms. To find out how to file ECI and the number of instalments allowed, refer to How to File.

 

What is e-Filing of ECI? Filing Estimated Chargeable Income (ECI)?

Answer:

You can e-File ECI to us if you have been authorised as an “Approver” for “Corporate tax matters” by your company. Any staff or director of the company, or a third party (e.g. tax agent), can be authorised as an “Approver” for “Corporate tax matters” via e-Services Authorisation System (EASY) using the company’s e-Services Access Code. For more details on EASY, please refer to user guide for EASY. After the authorisation via EASY, the authorised person can e-File for the company via myTax Portal using his personal SingPass or IRAS PIN. You will receive an acknowledgement statement upon successful submission of the ECI. Begin e-File User Guide FAQs Filing ECI using ECI Form Besides e-Filing, you can also file ECI by completing and submitting an ECI Form. However, please note that the number of instalments given for paper filing is lesser than that for e-Filing. There are three types of ECI Forms:

  • ECI Form (for company)
  • ECI Form (with request for payment by instalments)
  • ECI Form (for tax agent)

You can download the relevant ECI Form at Estimated Chargeable Income (ECI) Forms. You can also request for a fax copy of the ECI Form by using the self-help options at the Corporate Tax Integrated Phone Service 1800-356 8622.

 

What is the Declaration of amount of revenue in ECI Form? Filing Estimated Chargeable Income (ECI)?

Answer:

Revenue refers to a company’s main source of income, and excludes items like gain on disposal of fixed assets. If your company is an investment holding company, your main source of income will be your investment income. Companies have been disclosing 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 regular assessment of performance and development of industries and businesses. There is also an increasing need for more frequent and timely collation of comprehensive economic data in view of the rapid economic changes in recent years. Instead of imposing additional survey reporting on businesses, it is more efficient and cost effective to collect such economic data through existing channels such as the ECI Form. Where the audited accounts are not available, you can refer to the company’s management accounts for the purpose of declaring the revenue amount. If 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.

 

What is the meaning of ECI? Filing Estimated Chargeable Income (ECI)?

Answer:

ECI means Estimated Chargeable Income. It is an estimate of a company’s chargeable income for a Year of Assessment (YA).

 

What should I do if I encounter an error while e-Filing the ECI via myTax Portal? How to revise ECI amount? Filing Estimated Chargeable Income (ECI)?

Answer:
  • After the filing of ECI, if you wish to revise the ECI amount, you can do so by:
  • Submitting an ECI Form (regardless of whether you have previously provided an ECI by e-Filing or by submitting an ECI Form); or
  • e-Filing the revised ECI amount via myTax Portal under “Object/Revise Assessment” if you have been authorised as an “Approver” for “Corporate tax matters” via EASY.

For more details on e-Service “Object/Revise Assessment”, please refer to: User guides: For company (340KB) For tax agent (360KB)

 

Who needs to file? Filing Estimated Chargeable Income (ECI).

Answer:

A company has to furnish Estimated Chargeable Income (ECI) within three months after the end of its financial year end. You may refer to When to File for more details. We will send a letter to your company towards the end of your financial year-end to notify you to file ECI. Even if the company estimates its chargeable income as zero, it still has to file a “Nil” ECI. You may refer to How to File for more details

 

Will the NOAs be displayed if I e-File ECI for multiple clients? Filing Estimated Chargeable Income (ECI)

Answer:

No. Upon successful submission to IRAS, you will receive a consolidated acknowledgement statement for all the companies e-Filed. The NOAs will be sent to your clients.

 

Will the NOAs be displayed if I e-File ECI for multiple clients?

Answer:

No. Upon successful submission to IRAS, you will receive a consolidated acknowledgement statement for all the companies e-Filed. The NOAs will be sent to your clients.

 

How to claim for Section 14Q deduction? Business expenses

Answer:

If you wish to claim for Section 14Q deduction on the qualifying expenditure, you have to show the Section 14Q deduction in your tax computation and submit an itemised list of the renovation or refurbishment works. You also have to confirm on the itemised list that the renovation or refurbishment works do not require the approval of the Commissioner of Building Control. For more details on the Section 14Q deduction, please refer to the e-Tax Guide “Deduction For Expenditure Incurred On Renovation or Refurbishment Works” (124KB). Donations Donations are not deductible expenses as they are not incurred in the production of income. However, you can claim for deduction on donations made to an approved Institution of a Public Character (IPC) or the Singapore Government which benefit the local community. For approved donations made on or after 1 Jan 2002, you can claim for double deduction, that is, twice the amount donated. For approved donations with naming opportunity, only single deduction is allowed if the donations was made before 1 Jan 2005. However, double deduction is allowed for donations with naming opportunity made on or after 1 Jan 2005. To encourage greater charitable giving in Singapore during the economic downturn, approved donations made during 1 Jan 2009 to 31 Dec 2009 will qualify for 2.5 times deduction. With effect from Year of Assessment (YA) 2003, any unutilised donations can be carried forward to set-off against the income for the subsequent YA up to a maximum of 5 years if there is no substantial change in shareholders. For more details on donations and tax deductions, please refer to Charities / IPCs.

 

How to qualify for tax deduction under the purview of business expenses? Business expenses

Answer:

Generally, you can claim deduction for expenses that are wholly and exclusively incurred in the production of income. To qualify for tax deduction, the expenses must also satisfy the following conditions:

  • The expenses must be revenue in nature, (generally refers to the normal day-to-day operating expenses). Capital expenditure is not allowable as a tax deduction.
  • The deduction must not be prohibited under the Income Tax Act.
  • The expenses must be incurred. Contingent liability is not allowable as a tax deduction.
Deductible expensesNot deductible expenses
Accounting fee Administrative expenses Advertisement Auditors’ remunerationAmortisation
Bad debts (trade debtors) Bank charges Book-keeping servicesBad debts (non-trade debtors)
Commission CPF, skill development levy, foreign workers’ levyCPF contributions (Voluntary*) Certificate of entitlement (COE) for motor vehicles**
Directors’ fees Directors’ remunerationDepreciation (you may claim capital allowances) Donations
Entertainment Exchange loss (trade and revenue in nature) Exhibition expensesEntrance fee (country club or other clubs) Exchange loss (non-trade or capital in nature)
Fixed assets written off Fixed assets acquisition cost Fines
Goodwill payment
Impairment loss on trade debts Insurance (e.g. fire, workmen compensation) Interest expensesImpairment loss on non-trade debts Income tax Installation of fixed assets Insurance (certain life insurance) Interest expenses (interest adjustment)
Legal and professional fees (trade and revenue transactions)Legal and professional fees (non-trade or capital transactions
Medical expenses (restricted to 1% of total remuneration) Motor vehicle expenses (goods / commercial vehicles, e.g. van, lorry and bus)Medical expenses (amount exceeding 1% of total remuneration) Motor vehicle expenses (“S” plate private passenger cars)
Office upkeep
Periodicals & newspapers Postage Printing & stationery Property tax Provision for bad and doubtful debts (specific)(note impairment loss on trade debts) Provision for obsolete stocks (specific)Penalties Preliminary expenses Private and domestic expenses Private hire car Provision for bad and doubtful debts (general)(note impairment loss on trade debts) Provision for obsolete stocks (general)
Rental of business premises Repairs and maintenance Restoration costs (according to tenancy agreement) Research and developmentRenovation or refurbishment works (you may claim Section 14Q deduction for qualifying expenditure incurred from 16 Feb 2008 to 15 Feb 2013)
Secretarial fees Staff remunerations (salary, bonus and allowances) Staff training Staff welfare/benefits Stock obsolescence
Tax fees (service fees paid to tax agent) Telephone Transport (public transport and goods / commercial vehicles) TravellingTransport (“S” plate private passenger cars)
Wages Water & electricity

*Voluntary CPF contributions refer to CPF contributions exceeding the statutory rate and CPF contributions for foreign employees holding professional visit pass, employment pass or work permit **If the vehicle qualifies for capital allowance (goods / commercial vehicle), you can include the cost of COE to the cost of vehicle and claim capital allowance Section 14Q deduction for expenditure incurred on renovation or refurbishment works Currently, capital expenditure incurred on renovation or refurbishment works (R&R costs) carried out on the business premises is not allowable as a tax deduction (unless the R&R costs constitute expenditure on repairs or replacements with no element of improvement). Such R&R costs also do not qualify for capital allowances (unless they form part of an industrial building which qualifies for industrial building allowances) because they are incurred in relation to the business setting within which the business is carried on and not on the provision of “plant or machinery”. To help businesses, particularly small and medium enterprises, reduce their business costs, tax deduction will be granted on all qualifying R&R costs incurred during the period 16 Feb 2008 to 15 Feb 2013 under Section 14Q of the Income Tax Act. Under Section 14Q, the amount of R&R costs that will qualify for tax deduction is subject to an expenditure cap of $150,000 for every relevant three-year period, starting from the year in which the R&R costs were incurred and a deduction is claimed by the company. Section 14Q deduction must be claimed over three consecutive Years of Assessment (YAs), starting from the YA relating to the basis period in which the R&R costs were first incurred (i.e 1/3 of the R&R costs can be claimed each YA over the three consecutive YAs). Any amount of qualifying R&R costs, which are not claimed in the YA relating to the basis period in which they were first incurred, will not qualify for deduction in subsequent YAs. If your company permanently ceases business in any of the three YAs, it will not be allowed a deduction on the balance of the R&R costs. Special provisions for YAs 2010 and 2011 To encourage companies to refit their business premises during the current period of economic downturn, companies that incur qualifying R&R expenses in the basis periods relating to YAs 2010 and 2011 can claim such expenses over one year instead of over three years. The accelerated write-down from three years to one year will have a direct impact of reducing the income tax payable by companies, thereby easing the cash-flow pressures that companies may face. The cap of $150,000 for every relevant three-year period remains unchanged. Section 14Q deduction is to be deducted from the adjusted profit/loss after allowance has been made to other tax deductions. Any amount of Section 14Q deduction that could not be fully utilised will form part of the adjusted trade loss of the company. However, the unutilised Section 14Q deduction cannot be transferred under the group relief system. The adjusted trade loss (after deducting Section 14Q deduction) can be offset against other income of the company. The amount of unutilised trade losses, if any can be: – carried forward to offset against the company’s assessable income for future YAs if there is no substantial change in the shareholders and their shareholdings; or – carried back to the immediate preceding YA to be offset against the assessable income under the loss carry-back relief. For examples on how to compute Section 14Q deduction, please refer to the Annex to the e-Tax Guide “Deduction For Expenditure Incurred on Renovation or Refurbishment Works”

 

 What about buying Life insurance policies? Business expenses

Answer:

If it is your company policy to buy insurance policies for the employees and the beneficiaries of the policy are the employees, the life insurance premiums paid are tax-deductible expenses as it constitutes as staff cost. (Please note that the life insurance premiums are taxable as employment benefits of the employees and these benefits must be declared in their Form IR8A) If your company is the beneficiary, the insurance premiums are not deductible unless they satisfy the conditions of a “keyman” insurance. For details on deductibility of “keyman” insurance, please refer to “Keyman” insurance: Deductibility of premiums – addendum to practice note 1993/IT/5 dated 25 Feb 1993 (100KB).

 

What about Motor vehicle expenses? Business expenses

Answer:

Motor vehicle expenses incurred in respect of private passenger cars (S-plate cars) are not deductible for income tax purposes regardless of whether the cars have been used for business purposes (except where the company is carrying on business of hiring out cars or providing driving instruction). The deduction is specifically prohibited under the Income Tax Act. Reimbursement of employees’ S-plate car expenses incurred by employees for company’s business is also not deductible. However, if your company pays transport allowance to the employees as part of their remuneration package, the transport allowance is a deductible expense, as it is part of staff cost. (Please note that the transport allowance is taxable as part of the employment income for your employees) If you own Q-plate business passenger cars that were registered before 1 Apr 1998, motor vehicle expenses relating to these Q-plate cars are allowable but subject to a capping of: 35,000 _ __ x motor vehicle expenses relating to that vehicle Cost of vehicle Motor vehicle expenses for foreign registered cars used exclusively outside Singapore are deductible if the expenses are incurred for business purposes. For more details on deductibility of motor vehicle expenses, please refer to Changes in Tax Treatment of Motor cars consequent to Vehicle Tax Rationalisation (126KB). Private hire car With effect from 1 Apr 1998, private hire car expenses and hiring charges (SZ-plate or S-plate cars) and are not deductible for income tax purposes. Deduction is not allowed regardless of whether the hired cars have been used for business purposes, except where the company is carrying on business of hiring out cars or providing driving instruction. The private hire car expenses and hiring charges for foreign rental cars used exclusively outside Singapore are deductible if the cars are used for business purposes. For more details on deductibility of motor vehicle expenses, please refer to Changes in Tax Treatment of Motor cars consequent to Vehicle Tax Rationalisation (126KB). Research & development expenses With effect from YA 2003, if your company is carrying on a trade in manufacturing; or carrying on a business for the provision of any services; your company can claim deductions for research & development (R&D) expenditure related to that trade or business: incurred by your company; or incurred on R&D activities outsourced to any R&D organisations For R&D services that are outsourced to overseas R&D organisations, the ownership rights of any intellectual property created must belong to your company. Your company has to complete a declaration form to undertake that the benefit of the R&D work will go to your company. To claim the tax deduction for R&D outsourced to an overseas R&D organisation, please refer to Further Details on Enhanced Tax Deduction for Research & Development. In addition, your company may enjoy double tax deduction on the R&D expenditure incurred if it is approved by Economic Development Board (EDB). From YA 2009 to YA 2013 With effect from Year of Assessment 2009, the changes in tax deductions for R&D expenses are as follows: Removal of the requirement that R&D expenses incurred must be related to the existing trade or business in respect of R&D done in Singapore; That is, if the R&D is done in Singapore, your company can qualify for tax deduction regardless of whether the R&D expenses are incurred in respect of your company’s existing trade or business. Enhanced deduction for qualifying R&D expenses under Section 14D in respect of R&D done in Singapore The tax deduction has been raised from 100% to 150% of qualifying R&D expenditure incurred on R&D done in Singapore. New R&D tax allowance (RDA) scheme The allowance will be given up to an amount of 50% of the first $300,000 of the company’s chargeable income. For the purpose of this scheme, companies are required to declare their Base Year and Base Expenditure via myTax Portal. For more details on this e-Service, please refer to “Research & Development Allowance Account”. New R&D Incentive for start-up Enterprise (RISE) scheme Under RISE, a qualifying start-up company is allowed to surrender their tax adjusted losses in exchange for a cash grant computed at a prescribed rate, subject to certain conditions. You can view the summary of the R&D-related income tax changes. For more details, please refer to e-Tax Guide “Research And Development Tax Measures”.

 

What are included in Medical expenses? Business expenses

Answer:

With effect from 1 Apr 2004 From 1 Apr 2004, the amount of medical expenses deductible is subject to a cap of 1% of the total remuneration accrued for the year. However, if your company has implemented the Portable Medical Benefits Scheme (PMBS) or Transferable Medical Insurance Scheme (TMIS) and it meets the qualifying conditions under the respective schemes, the capping for medical expenses is 2% of the total remuneration. With effect from YA 2008 From YA 2008, in recognition that employers’ provision of portable medical shield plans or ad-hoc contributions to the Medisave accounts of employees achieve the same objective as the PMBS and TMIS, your company will be granted a tax deduction of up to 2% of the total remuneration if your company:

  • has provided your employees with inpatient medical insurance benefits in the form of portable medical shield plans (but the deduction will exclude premiums for riders that cover deductibles and co-payments); or
  • has made ad-hoc contributions to your employees’ Medisave accounts (subject to a cap of $1,500 per employee per year) during the relevant basis period.
  • Tax deduction will remain capped at 1% of total remuneration if your company is not on PMBS/TMIS or does not provide portable medical shield plans or make ad-hoc medisave contributions for your employees.

For more details on the schemes and the qualifying conditions, please refer to the MOM website – “Implement Portable Medical Benefits and Enjoy Higher Tax Deduction For Medical Expenses” Example: (for medical expenses incurred after 1 Apr 2004 but before YA 2008)  

Total remuneration*Medical expenses**Company not implementing PMBS or TMISCompany implementing PMBS or TMIS
Amount deductible (capped at 1% of total remuneration)Amount not deductibleAmount deductible (capped at 2% of total remuneration)Amount not deductible
100,0002,5001,0001,5002,000500

  * Total remuneration includes:

  • employees’ salaries, allowances & bonuses;
  • directors’ remuneration;
  • CPF contributions

excludes:

  • directors’ fees;
  • medical expenses;
  • cash allowances in lieu of medical expenses and benefits-in-kind

Medical expenses include:

  • maternity health care;
  • natal care;
  • preventive and therapeutic treatment expenses;
  • provision of a medical clinic by the employer;
  • cash allowance in lieu of medical expenses;
  • dental expenses;
  • premium incurred on medical and dental insurance; and
  • contributions made by a company to the employees’ CPF medisave accounts, subject to a maximum deduction of $1,500 for that year for each employee (does not include employees who are holding a professional visit pass, an employment pass or a work permit).
  • Impairment loss on trade debts

Under FRS 39, impairment losses are incurred under certain circumstances described in the Accounting Standard*. For income tax purposes, impairment losses incurred on financial assets on revenue account will be allowed as a deduction and any reversal amount will be taxed. With the adoption of FRS 39, general and specific provision for bad and doubtful debts would no longer be made. There is no differentiation between general and specific provision for doubtful debts and impairment losses on debts will be deductible as long as the debts are relating to trade and are revenue in nature. However, for companies that opted for pre-FRS 39 tax treatment, only specific provision for doubtful debts will be deductible for tax purposes. General provision for doubtful debts will continue to be not deductible for tax purposes. To facilitate the review of claims for impairment loss in respect of bad or doubtful debts, please provide the following information, where applicable, in your tax computation:

  • details of debts (name and amount owing by each debtor) which was not incurred in respect of the trade or business such as loans and advances;
  • details of debts which were taken over in the case of a transfer or merger of business;
  • details of debts in respect of a trade that had ceased, including any activity granted with pioneer incentive that had ceased;
  • segregation of debts relating to the different tax rate categories.

The following additional information is required for trade debts owing by related parties, where the amount of impairment loss exceeds $250,000:

  • relationship between the company and the trade debtor;
  • whether normal credit policy and terms were extended to the related party. If not, please provide the reasons for the extended credit policy and terms;
  • whether steps were taken to recover and enforce the debts. If not, please provide the reasons for not enforcing the debts;
  • reasons why the related party was unable to repay the trade debt.

*Paragraphs 58 to 62 of FRS 39

 

What are the factors that include Qualifying expenditure? Business expenses

Answer:

The following items will generally qualify for Section 14Q deduction if they do not affect the structure of the business premises:

  • General electrical installation and wiring to supply electricity;
  • General lighting;
  • Hot/cold water system (pipes, water tanks etc);
  • Gas system;
  • Kitchen fittings (sinks, pipes etc);
  • Sanitary fittings (toilet bowls, urinals, plumbing, toilet cubicles, vanity tops, wash basins etc.);
  • Doors, gates and roller shutters (manual or automated);
  • Fixed partitions (glass or otherwise);
  • Wall coverings (such as paint, wall-paper etc.);
  • Floorings (marble, tiles, laminated wood, parquet etc.);
  • False ceilings and cornices;
  • Ornamental features or decorations that are not fine art (mirrors, drawings, pictures, decorative columns etc.);
  • Canopies or awnings (retractable or non-retractable);
  • Windows (including the grilles etc.);
  • Fitting rooms in retail outlets.

No deduction will be allowed on expenditure relating to:

  • Any designer fees or professional fees;
  • Any antique; or
  • Any type of fine art including painting, drawing, print, calligraphy, mosaic, sculpture, pottery or art installation.

 

What is Interest adjustment?

Answer:

Interest expenses relating to non-income producing assets are not deductible for income tax purposes. As such, you have to make interest adjustments in your tax computation if there are any interest expenses applicable to non-income producing assets. What are non-income producing assets? Non-income producing assets are assets which do not produce any income. Examples of non-income producing assets are: Vacant properties, Investments in shares/securities which have not yielded dividends, Interest-free loan or amount owing by non-trade/sundry debtors, Interest-free loan or amount owing by related companies (non-trade)/shareholders. Interest adjustments are normally made using the total asset method. This method works on the principle that total funds are used to finance total assets. Under the total asset method, interest adjustment (disallowable interest expense) = Cost of non-income producing assets x Interest expenses Cost of total assets* * The cost of total assets should be stated at cost, that is, without taking into account any provisions made (e.g. provision for depreciation and bad debts) and valuation surplus / deficit Interest-free loan on amount owing by directors Interest adjustment is not required for interest-free loan or amount owing by directors as it constitutes staff cost. The interest-free benefits are taxable as employment benefits of the directors. (Note: Interest benefits must be included in directors’ Form IR8A). The interest-free benefits can be calculated based on: Interest-free loan due from each director as at the Balance Sheet date multiply by the average prime lending rates You can refer to Monetary Authority of Singapore (MAS) website for the prime lending rates . When you file Form C for the company, you need to furnish the details of the interest-free loans to individual directors/shareholders in the Appendix to Form C (Form IRIN 312).

 

Checklist to guide companies in filing Form C? Tips for SMEs on Form C Filing

Answer: The following checklist is to guide companies in ensuring a prompt and complete filing of Form C.

 

Due date for filing of Form C Tips for SMEs on Form C

Answer: Whether a company has made profits or losses in the preceding accounting year ended in 2008, it is required to file its Form C together with the company’s financial accounts, tax computation and relevant supporting documents. A full set of these documents must be submitted to IRAS by 30 November 2009.

 

Have you done the following in preparation of your Form C submission?

Answer:

  1. Preparation of AccountsPrepare a full set of accounts according to the Companies Act, including:
    • Directors’ report
    • Auditor’s report (except for companies that enjoy audit exemption*)
    • Balance sheet
    • Profit and loss statement
    • Notes to the accounts
    • Statement by Directors
    • Prepared a detailed profit and loss statement

     

  2. Preparation of Tax Computation and Supporting Schedules
    • Prepared tax computation
    • Collated all relevant donation receipts to support claims if you have not given your tax reference number to the IPCs

     

  3. Completion of Form C and Appendices
    • Read the explanatory notes to Form C and Appendices before completing the forms
    • Where applicable, declared in Form C that your company has satisfied all qualifying conditions to claim tax exemption for new start-up companies
    • Ensured the chargeable income declared is before exempt amounts
    • Signed and completed all parts of the forms

*Under the Companies Act, dormant companies and exempt private companies with annual revenue of not more than $5million are not required to have their accounts audited. An exempt private companies are companies which

  • has not more than 20 shareholders and none of them is a corporation; or is wholly owned by the Government, which the Minister, in the national interest, declares by notification in the Gazette to be an exempt private company.

Common tax concessions and rules for companies Below are some of the more common tax concessions that companies may benefit from by way of a reduction in income tax. Tax Exemption Scheme for New Start-Up Companies The tax exemption scheme for new start-up companies was first introduced in YA 2005 and enhanced in YA 2008 to support entrepreneurship and to help local enterprises grow. Details of the tax exemption are as follows:-

Tax exemption on the 1st $ 300,000 chargeable income
100% exemption on the 1st $100,000 chargeable income

$100,000

50% exemption on the next $200,000 chargeable income

$100,000

Maximum exempt amount each year

$200,000

  To qualify for the scheme in YA 2009, a company must have any of its first three YAs upon incorporation falling in YA 2009. In addition, the company must:

  • be incorporated in Singapore (other than a company limited by guarantee);
  • be a tax resident in Singapore for YA 2009; and
  • have no more than 20 shareholders throughout the basis period for YA 2009 where:
    1. all of the shareholders are individuals beneficially holding the shares in their own names; or
    2. at least one shareholder is an individual beneficially holding at least 10% of the issued ordinary shares of the company.

    All other companies, including non start-up companies, will be accorded partial tax exemption. Companies can enjoy a partial tax exemption on normal chargeable income of up to $300,000.

Details of the partial tax exemption are as follows:-

Partial tax exemption on the 1st $ 300,000 chargeable income
75% exemption on the 1st $10,000 chargeable income

$7,500

50% exemption on the next $290,000 chargeable income

$145,000

Maximum exempt amount each year

$152,500

 

    1. Renovation and Refurbishment Costs – Tax deduction under Section 14Q With effect from YA 2009, companies can claim for tax deduction on qualifying capital expenditure incurred on renovation or refurbishment works (R&R costs) between 16 February 2008 and 15 February 2013. Claims are capped at $150,000 in equal portions over three years – a maximum of $50,000 a year.For example, a company which spent $200,000 in March 2008 on R&R costs can claim a tax deduction of $50,000 ($150,000/3) for YA 2009 to YA 2011.
    2. Capital Allowance – Tax deduction under Section 19A(1) With effect from YA 2009, companies that purchase commercial vehicles with maximum laden weight not exceeding 3,000 kg and motor cycles for business purposes will be able to claim capital allowance over three years. Previously, such assets were granted capital allowance over their prescribed working life, which is generally six years.
    3. Loss Carry-Back Relief System As announced in 2009 Budget, the loss carry-back relief scheme has been enhanced for YAs 2009 and 2010. Companies can carry back their current year unutilised capital allowances and/or trade losses to the previous three YAs, subject to conditions. The amount of capital allowances and/or trade losses that can be carried back has also been increased from $100,000 to $200,000.For example, a company which has incurred a trade loss of $300,000 in YA 2009 can carry back $200,000 (the maximum) to YA 2006. This loss will be offset against the assessable income of the company, thus reducing the tax amount. Based on the difference, a tax refund will then be paid to the company.
    4. Carry Forward of Unutilised Capital Allowances, Losses and/or Donations Companies can carry forward the current year unutilised capital allowances, losses and/or donations to offset against the assessable income for the subsequent YAs, subject to certain conditions.
    5. Training Costs (Net of Grant) Many companies send staff for training courses to enhance their level of skills and productivity. To encourage Singaporeans to upgrade their skills so they can stay employed or seek re-employment, the Government also provides course fee subsidies to companies that send their workers for training.Companies that incur costs for the training of staff in areas relevant to the business will be generally entitled to claim a deduction for such expenses incurred. If companies receive or obtain government grants that help to reduce their training costs, only the training costs net of grant (i.e. actual costs borne by companies), will be tax deductible.
      1. Tax exemption will be granted on foreign-sourced dividends, foreign branch profits, and foreign-sourced service income remitted into Singapore on or after 1st June 2003, subject to the two conditions below:
        • The foreign income had been subjected to tax in the foreign country from which they were received.
        • The highest corporate tax rate (headline tax rate) of the foreign country from which the income was received is at least 15%.
      2. Retrenchment costs incurred in the process of streamlining business operations and to improve company’s profitability are tax deductible.
      3. Interest and other borrowing costs, which are incurred as substitute for interest expense or to reduce the interest costs, for the purpose of financing business operations are tax deductible.
      4. Donations made to an approved Institution of a Public Character (IPC) or the Singapore Government that benefit the local community will qualify for double tax deduction.
      5. View the mistakes commonly made by companies in their income tax filing and their tax computations.

A case study illustrating how companies can lower their tax burden by claiming the various tax concessions can be found here.

 

How to inform IRAS? Penalties for filing a wrong return

Answer: By post: Inland Revenue Authority of Singapore 55 Newton Road, 3rd storey, Revenue House

 

Offences for filing a wrong return? Penalties for filing a wrong return

Answer: A person who files a wrong return due to negligence or without reasonable excuse can be brought to court. If convicted under Section 95, the person may pay a penalty up to two times the amount of tax undercharged. A fine or an imprisonment will also be imposed. If a person is found to be evading tax, he can pay a penalty up to three times (if convicted under Section 96), or up to four times (if convicted under Section 96A) of the tax undercharged. A fine or an imprisonment will also be imposed. Informing IRAS voluntarily on the omissions or errors made

 

Why you should inform IRAS voluntarily?

Answer: Instead of imposing maximum penalties of up to 200% of tax undercharged for submission of incorrect Income Tax returns due to negligence or without reasonable excuse, IRAS is prepared to waive the penalty or accord a reduced penalty of 5% p.a. for first-time voluntary disclosures which meet the qualifying conditions under the IRAS Voluntary Disclosure Program.

 

How the company can settle the Offer of Composition?

Answer: If the company has received an Offer of Composition The company needs to:

  • File the Form C, audited/unaudited accounts and tax computation immediately to avoid higher composition fee; and
  • Pay the composition fee by the due date stated in the letter
  • If the company has not filed the Form C, audited/unaudited accounts and tax computation by 30 Nov even though it is supposed to file

The company will have to:   File the Form C, audited/unaudited accounts and tax computation immediately. Once the company receives an Offer of Composition, it will have to pay the composition fee imposed. If the company does not pay the composition fee and/or file the Form C, Audited/Unaudited Accounts and Tax Computation Summons will be issued to the company to attend Court. The fine imposed by the Court is usually higher than the amount of composition fee set by IRAS. Summons A summons is an official order to appear in Court. It is a written notification that prosecution action has started. When a Summons may be issued A summons may be issued when: The company’s Form C, audited/unaudited accounts and tax computation are not filed by 30 Nov, the filing due date. If the company has received a Summons The company director / representative is required to attend Court on the date fixed by the Court with a Letter of Authority.

 

How the company can settle the Summons ? Penalties for filing late or not filing

Answer: The company will have to file the Form C, audited/unaudited accounts and tax computation and pay the composition fee at least 4 working days before the date fixed by the Court. Thereafter, the company director / representative will not be required to attend Court on the assigned date as the summons will be withdrawn.

 

How to file the Form C, audited/unaudited accounts and tax computation ? Penalties for filing late or not filing

Answer: e-Filing – Year of Assessment 2008 and thereafter Filing previous years’ Form C (Prior to Year of Assessment 2008) You may request a duplicate copy of the Form C by either: Downloading a soft copy of the Form C* and sending the completed Form C by post; or Calling IRAS Enforcement Helpline on +65 6356 7012 * If you choose to download the Form C template, please remember to fill in the Document Identification Number (DIN) on the DIN sheet of the template. To find out how to retrieve your DIN, please refer to the user guide. Paying the Composition Fee Please pay the composition fee via one of the following modes (with the payment voucher enclosed with the Offer of Composition or Summons):

  1. By cash / NETS at any Singapore Post outlet
  2. By Internet Banking
  3. By AXS Machines
  4. By S.A.M (Self Service Automated Machine)
  5. By Singapore cheque, crossed and made payable to the “Comptroller of Income Tax”, with the company’s name, Tax Reference No. and Summons No. (for summons cases) written on the reverse side of the cheque. The cheque is to be attached to the payment voucher.

Important Notes:

  1. If you would like to check if your payment has been credited, please log in to myTax Portal and click on “View Account Summary” after 3 working days.
  2. If the composition fee is paid without filing the Form C, audited/unaudited accounts and tax computation, prosecution action may be taken against the directors.

 

If the company does not settle the Summons before the Court date ? Penalties for filing late or not filing

Answer: The company director / representative has to attend Court on the assigned date. Once he/she pleads guilty on the company’s behalf, the company will be fined up to a maximum of $1,000 for each summons issued against the company. The company is still required to file the Form C, audited/unaudited accounts and tax computation. Otherwise, the company directors may face prosecution action as long as the Form C, audited/unaudited accounts and tax computation are not filed.

 

If the Court date has been postponed ? Penalties for filing late or not filing

Answer: The company can still file the Form C, audited/unaudited accounts and tax computation and pay the composition fee before the new Court date. Once the company has filed the Form C, audited/unaudited accounts and tax computation and paid the composition fee, the company director / representative will not be required to attend Court on the assigned date as the summons will be withdrawn. Other Legal Actions  All companies are required to file their Form C, audited/unaudited accounts and tax computation by 30 Nov, the filing due date. If the company does not file the Form C, audited/unaudited accounts and tax computation for any Year of Assessment (YA) for 2 years or more, it is liable on conviction under section 94A(3) to –  

  1. A penalty equal to double the amount of tax that IRAS may assess for that YA; and
  2. a fine not exceeding $1,000.

E.g.: Companies are to file their Form C, audited/unaudited accounts and tax computation for YA 2009 by 30 Nov 2009. If the company has not filed the Form C, audited/unaudited accounts and tax computation for YA 2009 by 1 Dec 2011, the company may be prosecuted under section 94A(3).

 

What are the penalties for filing late or not filing for submission of Accounts?

Answer: Companies are required to file full set of financial accounts to IRAS. Only companies who have filed full set of financial accounts with ACRA in XBRL format [“Option A”] are not required to file the same with IRAS. (For more details on the XBRL formats, please read ACRA’s website on “Filing Financial Statements with ACRA”)

 

Does “Purchases” include opening stock?

Answer: No

 

What is the amount to be declared in Box 1a?

Answer: The amount to be declared is the adjusted profit/loss figure after deducting unutilised capital allowances brought forward, current year capital allowances and unutilised losses brought forward.

 

Boxes 11 and 13 Chargeable income – Should the chargeable income be the amount before or after deducting the exempt amount under the partial exemption scheme or tax exemption scheme for new start-up companies?

Answer: The chargeable income to be declared should be the amount before deducting the exempt amount. IRAS will compute the exempt amount under the partial tax exemption scheme or tax exemption scheme for new start-up companies* when finalising the assessment. *Applicable to new companies which satisfy the qualifying conditions and have indicated so on Part IV on Page 1 of the Form C.

 

Can I submit only Page 1 of Form C if Box 1 is checked but Box 2 is not checked?

Answer: Only Page 1 of Form C needs to be submitted by the company if the company did not carry on business, had no income in the preceding year, and the company also does not have any unutilised losses, capital allowances, or donations to be carried forward. However, such company could have owned investments during the basis period, only that such investments do not generate any income for the year of assessment. With the insertion of Box 2, the above requirement does not change. As such, if the company does own investments (hence Box 2 is unchecked), but the company did not carry on business, had no income in the preceding year (hence Box 1 is checked), then the company can still submit only Page 1 on Form C – provided that the company also does not have any unutilised losses or donations to be carried forward.

 

Can the amount of trade receivables, net of provision be entered if the amount of gross amount of trade receivables is not available anywhere in the accounts?

Answer: Yes, the amount of trade receivables, net of provision amount can be used if the gross amount of trade receivables is not available anywhere in the accounts. The figure should also include third party and related trade debts.

 

Can the company fill in the required figure as per the description in the company’s audited accounts? If there is no such description in the accounts, can the figure be that of the total of all expenses after the gross profit line?

Answer: The company can fill in the required figure as per the description in the company’s audited accounts. Where there is no such description in the accounts, the total of all expenses after the gross profit line can be used as long as the company is of the view that this figure is for sales, general and administrative expenses. Finance cost need not be included in box 38 unless the company has included Finance cost as part of Sales, General and Administrative Expenses.

 

Does “Purchases” refer to cost of sales?

Answer: No. However, if the figure for “purchases” is not available in the accounts, insert the figure for “cost of sales” instead, if this figure is available.

 

Does part X include new assets purchased under hire purchase? If yes, should the cost of the assets be the principal cost or principal repayments made during the year?

Answer: Part X includes assets purchased under hire purchase where cost of assets refers to the principal cost.

 

Does the “amount” represent gross sale proceeds or net profit? Does receipt mean cash receipt? Is a waiver of loan excluded, in the Box 28 Receipts claimed as not taxable (Including real estate)?

Answer: This represents net profit. Receipts here include both cash and non-cash receipts. A waiver of loan is therefore included.

 

Does trade payables include third party trade creditors, inter-company trade payables, accrued operating expenses, and hire purchase creditors?

Answer: The amount of trade payables includes third party trade payables and inter-company trade payables, but excludes accrued operating expenses and hire purchase creditors.

 

How to arrive at the adjusted profit/loss figure?

Answer: This is the amount after adjusting the net profit/loss as per the accounts for non-taxable items, separate source income, and disallowable expenses. To note: The amount to be declared in Box 1a should be the amount before deducting the exempt amount under the partial tax exemption scheme/tax exemption scheme for new start-up companies*. If the amount is a loss/negative figure, enter “X” in the box on the extreme left hand side. You may download the Basic Tax Calculator for help in computing the adjusted profit/loss and chargeable income. * Applicable to new companies which satisfy the qualifying conditions and have indicated so on Part IV on Page 1 of the Form C.

 

How to arrive at Trust distribution?

Answer: Trust distribution made out of income already taxed at the trustee level need not be included in this box. Amount to be delcared include REIT distribution. Note: You must attach a list showing details of distributions received.

 

How to complete Form C?

Answer: The Form C is a declaration form used by a company to declare its income. Please ensure that all the necessary sections in the Form C are correctly completed and that it gives a full and true account of the company’s income. In completing the Form C, please note: All lines must be completed. Any field that is not applicable should be filled in as “0” Do not indicate remarks such as “See attached” or “As per tax computation” on the Form C The declaration section on page one of the Form C must be signed by the person making the return. Guide to completing Form C for Year of Assessment 2009 onwards

 

Page 1 of Form C: Part IV – How do I claim for tax exemption scheme for new start-up companies?

Answer: You must complete Part IV on page 1 of the Form C as follows: 1. Confirm whether the company satisfied all qualifying conditions by entering “1” (Yes) or “2” (No). 2. State the first YA upon incorporation in YYYY format.

 

Page 4 of Form C: Part IX (Other information) – Where should the amount of additional expenses incurred for back years (commonly termed as prior years’ adjustments) be indicated?

Answer: There is no provision for this item in the Form C. However, the adjustments may be reflected in the tax computation and supporting schedules.Please indicate “1” (Yes) in Box 19 since there is a claim for unutilised capital allowances in section 1 of Part VII.

 

Page 4 of Form C: Part VIII (Claim of unutilised capital allowances, losses, or donations) – If the company has an adjusted loss but unutilised capital allowances brought forward has been used to offset income from separate source/balancing charge, how should they file File C?

Answer: Please indicate “1” (Yes) in Box 19 since there is a claim for unutilised capital allowances in section 1 of Part VII.

 

Page 5 of Form C: Part X (Capital allowances / industrial building allowances on new assets) – If the company is claiming capital allowance for the first time for assets purchased in previous years, should ‘1’ be entered (for ‘Yes’) or ‘2’ (for ‘No’)?

Answer: The amount to be declared is the cost of new assets purchased during the year for which capital allowances and/or industrial building allowances can be claimed.

 

Page 5 of Form C: Part XI (Deduction claimed under Section 14Q for expenditure on renovation or refurbishment works) – What is the amount to be declared in Box 32?

Answer: The amount to be declared is the current year qualifying R&R expenses incurred or n renovation or refurbishing business premises. This is subject to a cap of $150,000 for each relevant three consecutive basis periods.

 

Pages 2 and 3 of Form C: Part VII (Assessment information) – If the tax computation and accounts are maintained in a currency other than the Singapore dollars, how do we complete the Form C to show that the currency is not Singapore dollars?

Answer: Form C should be completed in Singapore dollars and not in the foreign currency. Please refer to the IRAS circular on ‘Filing of Income Tax Computations and Financial Statements in Functional Currencies other than Singapore Dollars‘ for details.

 

Should I include the cost of the new assets purchased during the year of I defer the capital allowance and/or industrial building allowance claim?

Answer: Yes

 

Should the amounts filled in Boxes 21 to 26 be before or after group relief?

Answer: This should be the amounts after group relief.

 

Should the chargeable income include concessionary income?

Answer: Yes, the amount should include income taxed at normal rate and concessionary rates. (Details of the concessionary income should also be filled in Box 14).

 

Should the chargeable income include exempt income arising from tax incentives?

Answer: No. Exempted income arising from tax incentives should be filled in Box 18.

 

Should the gross rent or net rent after deducting rental expenses be declared?

Answer: The net rent is to be declared.

 

What amount should be filled in Box 1D if the net rent is negative?

Answer: If the net rent is negative, enter “0”. However, if the negative rent is a result of Industrial Building Allowances claimed against the rent, enter the negative amount with an “X” in the box on the extreme left hand side to indicate loss/negative amount.

 

What does this Box 34 Revenue refer to?

Answer: This refers to the main income source of a company. For instance, the revenue of an investment company would be its investment income.

 

What is to be entered in the Box 12 Loss claimed from transferer company?

Answer: The amount to be entered is the current year losses transferred from other companies within the group under the Group Relief system. If you are claiming the group relief, please complete Form GR-B and submit together with Form C.

 

 What is to be filled in the Box 8 Current year capital allowances / losses carried back?

Answer: The amount to be entered is the current year capital allowances/losses to be carried back to the three immediate preceding years of assessment, subject to a maximum of $200,000* *This enhanced loss carry-back scheme applies only for YA2009 and 2010.

 

What is to be filled in this Box 36 Gross profit/loss?

Answer: This refers to the amount after taking into account the cost of goods sold. If there is no cost of goods sold, the gross profit should be the same amount as the revenue. If the amount is a loss/negative figure, enter “X” in the box on the extreme left hand side.

 

What is to be included in the Box 39 Directors’ fees and directors’ remuneration?

Answer: The amount should include both directors’ fees and directors’ remuneration. Directors’ remuneration includes salaries, leave pay, commissions, bonuses, gratuities, allowances, other emoluments paid in cash and contributions made to approve pension or provident funds which are deductible under the Act.

 

What is to be written in the Box7, Loss transferred to claiment company?

Answer: The amount to be entered is the current year losses to be transferred to other companies within the group under the Group Relief system. If you are transferring losses under the Group Relief system, please complete Form GR-A and submit together with Form C.

What kind of income should be included in this section, Box 2, foreign income received in Singapore?

Answer: This refers to income sourced outside Singapore and is remitted to Singapore, e.g.

  • Foreign dividends and interest income received from overseas. For foreign dividends, if double tax relief is claimed, the amount to be entered should be the regrossed amount net of allowable expenses (if any).
  • Profits of overseas branches or permanent establishments remitted to Singapore.

Please exclude foreign income remitted into Singapore but exempted under Section 13(8) of the Income Tax Act.

Question : What should be written in the Box 45 Total (Add Boxes 34 up to 44)?

Answer: This is the total of all the POSITIVE amounts of boxes 34 to 44 LESS any NEGATIVE amounts and it serves as a control total. If the total of boxes 34 to 44 is a negative amount and greater than the positive amounts of other boxes from 34 to 44 , then box 45 would be a negative amount. Enter “X” in the box on the extreme left-hand side if the total is a negative amount

Question : When should Box 20 be completed?

Answer: Only when Box 19a is indicated with “1” (Yes), i.e., there is a substantial change in the company’s shareholders and their shareholdings and the company is applying for a waiver of the shareholding test under Sections 23(5) and 37(15).

 

Question : Where should I declare any foreign income not remitted to Singapore?

Answer: This need not be indicated in the Form C. However, the amount should be shown in your tax computation.

 

Question : Where the accounts have an item called “Other receivables, deposits, and prepayments”, can a figure that represents the total of the three components be used? On the other hand, if there is no such item in the account, is the figure ‘0’ to be filled?

Answer: If there is a breakdown of “Other receivables, deposits, and prepayments” in the Notes to the Accounts, please fill in the figure for “Other receivables” in box 41. However, if there is no such breakdown, the figure for “Other receivables, deposits, and prepayments” can be used. In the case where the item “Other receivables, deposits, and prepayments” is not available anywhere in the accounts, please fill in the figure ‘0’.

 

Question : Where unutilised capital allowances/losses are claimed and part of the capital allowances/losses is to be disregarded for certain periods (i.e. company is not claiming for a waiver under Sections 23(5) and 37(15) of the Income Tax Act)?

Answer: Box 19 is to be completed with “1” (Yes) Box 19a is to be completed with “2” (No) You may leave Box 20 blank since no unutilised capital allowance/loss is claimed under Sections 23(5) and 37(15). The amount of capital allowances/losses disregarded should be shown in the tax computation.

 

 

 

 

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Website: www.paulhypepage.com

 

Posted on August 16, 2012 at 11:58 am
Categories: FAQ

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