Annual Filing in Singapore

Annual Compliance for Singapore Companies

According to the Singapore Companies Act, all companies in Singapore must comply with the annual filing in Singapore for the respective year. The requirements of annual compliance are essential and consist of the yearly financial statements, annual return (AR) filing with ACRA, which is the accounting and corporate regulatory authority, annual tax return filing with IRAS, i.e., the Inland Revenue Authority of Singapore, and lastly, for the conduct of annual general meeting (AGM). If you compare it to other countries, the legal obligations in Singapore are usually simple and easy. Also, many busy entrepreneurs skip the deadlines for annual compliance and refrain from meeting the annual filing in Singapore, which must be penalized with fines and penalties. The following sections provide information about all the conditions.  

Legal Requirements for Annual Filing in Singapore

The Accounting and Corporate Regulatory Authority of Singapore must statutorily comply with the annual filing in Singapore. All active and inactive companies in Singapore are legally bound to abide by the following annual filing. However, yearly filing in Singapore necessitates the timely preparation of financial statements, annual general meetings, and filing of annual returns and other tax returns with the authorities, namely the Accounting and Corporate Regulatory Authority and the Inland Revenue Authority of Singapore.

ACRA Annual Return Filing

ACRA, which stands for Accounting and Corporate Regulatory Authority, is the public body or national regulator that enforces and monitors the rules for the business in Singapore. All Singapore-incorporated businesses should submit annual returns, also known as annual reports, for timely compliance with the requirements of audits in Singapore following the Companies Act to keep their registration information up to date. An annual return must be filed at least 30 days after hosting the Annual general meeting.

The annual filing in Singapore enables the option of filing annual returns through the online system accompanied by a set of documents that contain the updated information on the following:

• Principal activities of the company; 
• Details of the registered office address of the company;
• The reserved name of the company;
• The registration number of the company;
• Complete details of the officers of the company (including directors and secretaries); 
• Complete details of the shareholder and the share capital held;
• Complete details of the company's annual financial statements.

The filing of the annual return mandatorily requires the signature or attestation of either the Director or the secretary of the company, along with a facsimile of an audited financial statement, to ensure smooth compliance with the annual filing in Singapore.

Exemption from Filing Annual Return

The annual filing in Singapore exempts the list of certain Singaporean companies from attaching their financial statements while filing the annual return for their company:

• A small company with a maximum of 50 employees holds either a total yearly revenue of less than S$10 million of the total annual revenue or total assets of less than $10 million;
• An exempt private company (EPC) with a maximum of 20 natural shareholders (no corporate body or entity);
• A dormant EPC is a company that has not conducted business or generated income in the past financial year.

Annual Return Filing without holding an AGM 

In some cases, the ACRA allows companies to file annual returns without holding an AGM. Companies should apply through the official ACRA website. The ACRA can still reject the application, mainly if the company has used it more than once. If your application is accepted, the ACRA will notify your company within 14 days. The company that files the annual return late with the ACRA must pay additional late lodgement fees. The late fee will also increase as the number of days in default increases.  

Conducting Annual General Meeting  

The Annual General Meeting is the shareholder gathering which happens every calendar year at a particular time. The annual meeting is mandatory to allow the shareholders to make specific decisions and check the financial statements of the shareholders of the business. Compliance with the yearly filing in Singapore mandatorily requires conducting an annual general meeting according to the provisions of the Company Law of Singapore. The AGM undertaken to comply with the annual filing in Singapore must be centred on the following discussions dealing with the director’s or audit report; fees and emoluments of the directors; election and re-election of the directors; appointment of the directors; etc.

Section 175 of the Singaporean company law states that any failure to convene an Annual General Meeting for a company, firm, or officials will be subject to a fine of as high as $5000 Singaporean currency. To avoid prosecution, ACRA will enable firms and officials to spend $300 as makeup costs for the violation. The Singapore Companies Act requires companies to organize annual general meetings for stockholders unless they decide not to manage them through the shareholder resolution passage.

Schedule for holding the AGM

The conduct of the annual general meeting must be in accordance with the mandatory timeline or schedule expressed under the ACRA and the provisions of the Companies Act of Singapore. Duly complying with the schedule for holding the Annual General Meeting is necessary for complying with the annual filing in Singapore.

The schedule of holding an AGM for the businesses that have fiscal years that are concluded before August 31 2018:

• Allows to hold the 1^st AGM within 18 months after the registration of the company;
• Allows the subsequent AGM to be held yearly at 15-month intervals.

The schedule of holding an AGM for the businesses that have fiscal years that are concluded on or after August 31 2018:  

• If you hold a publicly traded firm or company, then you are eligible to host an annual general meeting within four months of the closure of the fiscal year;
• If you don’t hold a publicly traded company or firm, you are eligible to host an annual general meeting within six months of the fiscal year's end.

Preparing and Auditing the Annual Financial Statements

According to the Singapore Companies Act, all the companies registered in Singapore and the branches of foreign companies in Singapore must prepare and present a financial statement in compliance with the Singapore Financial Reporting Standards (SFRS). SFRS is the principal based on and is substantially the same as the international financial reporting standard (IFRS) issued under the International Accounting Standard Board (IASB). Some important facts regarding the Annual financial statement that need to be considered while complying with the annual filing in Singapore are:

• Financial statements need not be formed for more than six months before the date of the Annual General Meeting;
• The financial statement should be signed by the directors of the company, who are held accountable for taking responsibility for the accuracy and preparation of the Annual Financial Statements according to the Singapore accounting ideals;
• The latent, dormant, and small companies meeting particular criteria are only authorized to prepare an unaudited form of annual financial statements.

Necessary Details for Preparing Annual Financial Statements

The Companies preparing the Annual Financial Statements are required to mention the list of the following information:

• The report or statement of the Director (s) of the company;
• The independent report of the Auditors of the company (if any);
• The complete statement of comprehensive earnings in the company;
• The financial situation statement, e., the balance sheet of the company;
• The statement of money flowin the company;
• The equity statement of the shareholders of the company;
• The notes for the company's financial statements, etc.

Financial statement in the XBRL Format  

As per the directives issued by the Singapore government in 2014, every business must provide its financial statement using the Extensible Business Reporting Language (XBRL). The XBRL can be explained as the XML format, used to create financial documents that companies can use to share financial information. Some businesses are not required to prepare financial statements using the XBRL format. The list of exempted firms to prepare the annual financial statement using the XBRL format includes: 

• The companies that are limited by guarantee;
• The international companies and their affiliates; 
• The companies possessing the right to make financial statements using the different accounting standards irrespective of SFRS and IFRS for small business entities;
• Solvent-exempt private companies (EPC) are entities with no more than 20 shareholders and no corporate shareholders, which means that all the shareholders are natural persons.

Audit Exemption for Financial Statements

The governing authorities of Singapore exempt certain companies from getting their financial statement audited. The provision for audit exemption of financial statements simplifies and ensures compliance with the annual filing in Singapore. The following list of Singaporean Companies exempted includes:

• Small Companies with at least 50 employees hold either an annual total revenue of less than S$10 million or a total asset of less than S$10 million. 
• Any dormant company not doing business has not produced income in the previous tax year.

IRAS Annual Tax Return Filing

The Inland Revenue Authority of Singapore (IRAS) is the government agency responsible for collecting taxes in Singapore. All Singapore companies are required to file their annual tax returns with the Inland Revenue Authority of Singapore (IRAS). The filing of the yearly tax return is one of the crucial yearly filings in Singapore. The filing of annual tax returns must be accompanied by the filing of the following reports as provided below:  

• The chargeable income estimate should be filed within three months of the end of the financial year of the company; 
• The corporate income tax return should be filed by November 30 for paper filing or by December 15 for electronic filing.

Estimated Chargeable Income Filing

The estimated chargeable income, also known as ECI, is the company's taxable income or profits accrued in the current financial or assessment year. The IRAS schedules the filing and submission of the ECI within three months from the end of the financial year.

After July 2017, the IRAS bars certain companies from reporting the estimated chargeable income in certain situations:

• In case the value of the estimated chargeable income is nil,
• In case the value of the company's annual revenue is less than S$1-5 million.

Corporate Income Tax Return Filing

Companies must also file corporate income tax returns annually using Form C. The deadlines for filing the corporate income tax returns must fall in the fiscal year and the year following the end of the financial year. The Companies filing Form C should also add tax computations, financial statements, elaborated statements of profit and loss, and other relevant documents if needed. Form C-S is the simple version of the corporate tax return that doesn’t require companies to attach financial statements and tax computations. Filing of Form C-S requires the companies to meet the following requirements as provided below:

• The company must be registered in Singapore;
• The company is not required to earn an annual revenue of more than $5 million;
• The company doesn't claim the carry-forward of the current year's allowances, including capital, group relief, investment allowance, foreign tax credit, and tax deductions, at the source.

There are generally two deadlines for filing the corporate income tax return with the Inland Revenue Authority of Singapore. The first deadline falls on the 30^th of every November, which is necessary for the paper filing of the corporate income tax return, and the second deadline falls on December 15, which is required for the electronic filing of the corporate income tax return.

Dormant Companies Tax Filing

The dormant companies registered in Singapore must file tax returns to comply with the annual filing in Singapore. The IRAS is the governing authority that provides for the exemption to certain dormant companies from filing tax returns in the following situations:

• Where the company is restricted from generating any business income from the business activities;
• Where the company submits either Form C-S, C, or financial statements of the business for restricting the business activities;
• Where the company doesn’t own any investment;
• Where the company is deregistered for goods and services tax (GST);
• The company doesn't intend to re-commence within the next two weeks.

Non-Compliance with the Annual Filing in Singapore

Suppose your company fails to conduct the Annual General Meeting timely and submit the Annual Return and the Financial Statement. In that case, inevitable consequences are attached that your company might need to face. The following are the mentioned consequences for any failure or non-compliance with the mandatory annual filing in Singapore:

• The directors not complying with the regulations can be penalized in court and potentially barred from serving as directors. The penalty of $5000 is attracted under section 175 of the Companies Act of Singapore.
• The businesses failing to convene or comply with the essential requirements of conducting AGMs are subjected to a composition fee of $3000 from the ACRA; 
• Every late annual return filed after the deadline is subject to a separate late filing fee;
• Companies are liable for a fine of $300 for each non-compliance;
• The Singaporean company that does not comply with the Estimated Chargeable Income requirements for submission within four months from the end of the financial year receives an IRAS Notice of Assessment (NOA) stating an estimated assessment of the company's income.

ACRA Certificate of Compliance and Rating

A company, after completing all the annual filings in Singapore, becomes eligible to receive a green checkmark against the name of the company in the directory of the Accounting and Corporate Regulatory Authority. The ACRA-certified company is now eligible to hold a Certificate of Compliance. A company failing to comply with the annual filing in Singapore is granted a mark containing the Red Cross and, hence, is further exempted from issuing a Certificate of Compliance.

Also, the need to attain the annual filing in Singapore is obligatory so that any person or entrepreneur willing to build client relations with the company gets an easy justification regarding the company's compliance rating, which is available on the ACRA's official website.

Why outsource for Enterslice’s help?

At Enterslice, we value the best practice of the diverse regulatory framework for fulfiling the annual filing in Singapore. Every company registered in Singapore must outsource Enterslice to comply with the legal requirements for ensuring the yearly filing in Singapore. The services we at Enterslice ensure include:

• Possess extensive knowledge regarding business expansion;
• Ensures local, technical, and regulatory compliance;
• Possess a team of corporate experts;
• Offers the best valuable services;
• Ensures affordable prices;
• Ensures duly filing of the financial statements;
• Clarifies the holding of the annual general meeting;
• Ensures duly filing of yearly tax returns for your company, etc.