In order to expand overseas business, many Chinese enterprises will choose to set up companies in Singapore. Singapore's company law and tax system are quite different from those of Chinese Mainland, so it is necessary to be familiar with Singapore's basic tax and accounting system!
Singapore Corporate Accountingyear
The accounting year for tax declaration of Singapore companies is generally 12 months, and the first year of accounting can be extended to 18 months. Because Singapore has preferential tax relief for the first three years of newly established companies, it is recommended to take 12 months as the accounting year and operate together with the annual review. The company's tax return is before November 30 every year.
Generally, if the company is registered in a certain month, the financial year will end before the month of the next year. For example, if the company is registered on April 18, 2020, its first financial year can end on March 31, 2021. Then the next two financial years will end on March 31, 2022 and March 31, 2023.
In order to coordinate with the financial year of the parent company, some companies facilitate the subsequent financial accounting and consolidation. Singapore companies will choose to lengthen or shorten the first financial year. (The first financial year alone cannot exceed 18 months). For example, the financial year of the parent company ends on August 31, 2021. The time of registration of Singapore companies is May 19, 2020, and the end of the first financial year can be August 31, 2021. In this way, the first financial year of the Singapore company is 16 months (15 months and 13 days).
ECI estimated tax
The company must declare three months after the annual financial closing date. After the declaration, the Singapore Government Taxation Bureau IRAS will issue a tax payment notice according to the tax assessment form. Usually, the tax payment notice will be received 1-2 months after the tax assessment deadline, and the relevant tax will be paid within 1 month after receiving the notice.
Form C Tax form
With December 31 of each year as the end date, if the company's financial year end date is on or before December 31 of that year, the year of assessment (YA) is the next year. For example, the accounting period is 2010.4.1-2011.3.31, YA is 2012, and the Form C of YA2012 will be issued around April of each year to declare the tax of the previous year. If there is any discrepancy between the amount declared by ECI, the more can be refunded and the less can be compensated. The deadline for declaration is November 30, 2012. The tax bureau will issue a tax payment notice after receiving Form C and pay the tax within one month.
