Due date for filing of Form C
A company is required to file its Form C together with its financial accounts, tax computation and relevant supporting documents by 30 November of each year. For example, in the year 2010, a company has to file the complete set of return for year of assessment 2010 (i.e. Form C, financial accounts for the accounting year ending in 2009, tax computation and relevant supporting documents) by 30 Nov 2010.
Checklist to guide companies in filing Form C
The following checklist is to guide companies in filing of Form C:
1. Preparation of Accounts
- The accounts are to be prepared in accordance to the Companies Act and it should comprise of:
- 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
- Prepare a detailed profit and loss statement
2. Preparation of Tax Computation and Supporting Schedules
- Prepare tax computation
- Collate 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, declare in Form C that your company has satisfied all qualifying conditions to claim tax exemption for new start-up companies
- Ensure the chargeable income declared is before exempt amounts
- Sign and complete all parts of the forms
For a summary on
Things to Note when filing Form C, please click
here.
Common tax reliefs and deductions for companies
1. Tax Exemption Scheme for Companies
The tax exemption scheme for new start-up companies provides tax exemption of up to $300,000 on a company's normal chargeable income for the first three consecutive years of assessment.
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
|
All other companies will be accorded partial tax exemption of up to $300,000 on their normal chargeable income under the partial tax exemption scheme.
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
|
2. Renovation and Refurbishment Costs - Tax deduction under Section 14Q
With effect from YA 2009, companies can claim 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.
As announced in the 2009 Budget, 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 three years. The cap of $150,000 for every relevant three-year period remains unchanged.
3. Capital Allowance – Tax deduction under Section 19A(1)
As announced in the 2009 Budget, capital expenditure incurred on plant and machinery (including commercial vehicles and motor cycles) acquired in the basis periods for the YAs 2010 and 2011 can be allowed an accelerated write-down over two years instead of three years. With this change, companies can write down the costs of these newly acquired plants and machinery (including commercial vehicles and motor cycles) at the rate of 75% for the first YA of claim and the remaining 25% in the second YA of claim.
4. 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 has incurred a trade loss of $300,000 in YA 2010 and has no assessable income for the YAs 2008 and 2009. It can carry back its loss of up to $200,000 to set off against its assessable income for YA 2007. The reduction in the tax for YA 2007 is available for refund to the company.
Companies claiming Tax Exemption Scheme for New Start-Up Companies
Companies that qualify for the
Tax Exemption Scheme for New Start-Up Companies should ensure that the Loss Carry-Back Relief is beneficial to your company before making an election for this scheme. The election for the Loss Carry-Back Relief once made is irrevocable.
For more details and illustrations, please click
here.
5. Carry Forward of Unutilised Capital Allowances, Losses and/or Donations
6. 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.
A case study illustrating how companies can lower their tax burden by claiming the various tax concessions can be found
here.
Other highlights
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:
a) The foreign income had been subjected to tax in the foreign country from which they were received.
b) The headline tax rate (highest corporate tax rate) of the foreign country from which the income was received is at least 15%.
Remittance during 22 Jan 2009 to 21 Jan 2010
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.
Company claiming for income tax exemption for foreign-sourced income received in Singapore from 22 Jan 2009 to 21 Jan 2010, please complete the Declaration Form for Foreign-Sourced Income Received in Singapore from 22 Jan 2009 to 21 Jan 2010 (60KB).
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.
Companies should note that for donations made to an approved IPC during 1 Jan 2009 to 31 Dec 2010, it will qualify for 2.5 times tax deduction.
5. View the mistakes commonly made by companies in their income tax filing and their tax computations.
Workshops and seminars for companies
Company representatives who are responsible for the preparation of Form C filing and other corporate tax matters are encouraged to sign up for a free one-day Corporate Tax Seminar conducted by IRAS.
Companies can find out about the seminar dates and registration details under the ‘News & Events’ > ‘
Workshops & Seminars’ section of the IRAS website.