The Inland Revenue Authority of Singapore (IRAS) is simplifying tax filing for small companies through two initiatives.
This involves simplifying the reporting requirements for Estimated Chargeable Income (ECI) and the filing of Income Tax Return, Form C, for small companies so as to reduce their compliance burden.
This was announced today by IRAS Commissioner Mr Moses Lee at the Budget Seminar 2012, a yearly event organised by the Tax Academy of Singapore.
He said: "We recognise that small companies face greater challenges in managing their tax obligations. Their resources are already highly stretched, as they struggle just to keep up with their day-to-day operations and focus on business viability."
First, small companies with turnover not exceeding $1 million and with no ECI will no longer need to file the ECI. Currently, all companies have to report their ECI within three months of the end of their financial year end.
The waiver will take effect from Year of Assessment 2013 for companies with accounting year ending October 2012 or after. IRAS estimates that 67,000 companies, or about 42% of all companies will be able to take advantage of this, saving them one step in the overall corporate tax filing requirements.
Second, from Year of Assessment 2012, IRAS is also introducing a new simplified income tax return for small companies with the Form C-S, which will benefit small companies with an annual turnover not exceeding $1 million.
IRAS expects about 110,000 companies, or 70 per cent of all companies to benefit from this form, as only essential tax and financial information that are most relevant to them are required in Form C-S. Tax filing will be cut down to about 10 minutes, or half the average time taken to complete Form C.
Companies that electronically file the Form C-S will also enjoy a later e-Filing due date of 15th December, instead of 30th November for paper filing.
Said Mr Lee: "I am heartened to share that the Form C-S is not just an IRAS initiative. It is the culmination of a strong partnership with businesses, tax practitioners and industry stakeholders, including members of our Taxpayer Feedback Panel and Focus Groups. You have given us great ideas and supported us along the way. I would like to thank all of you for your valuable contributions and for partnering us in our continuous journey of fostering a pro-business environment."