Corporate Income Tax (CIT) Rebate on ECI Filed for Year of Assessment (YA) 2020
For YA 2020, companies will be granted a CIT
tax rebate of 25% of the corporate tax payable, subject to a cap of $15,000.
Companies need not factor in the CIT rebate when filing their ECI for YA 2020 as IRAS will compute and allow the rebate automatically.
For more information on the CIT rebate, please refer to Corporate Tax Rates, Corporate Income Tax Rebates and Tax Exemption Schemes.
Compulsory e-Filing for ECI
From YA 2020, e-Filing of the ECI is compulsory for all companies.
In line with Government's direction for more cost effective delivery of public services and the Smart Nation vision to harness technology to enhance productivity, e-Filing of the Corporate Income Tax returns (including ECI, and Form C-S/ C) is compulsory. A phased approach is adopted from YAs 2018 to 2020 as follows:
| YA | Target Group for Compulsory e-Filing |
|---|
| 2018 onwards | Companies with revenue more than $10 million in YA 2017 |
| 2019 onwards | Companies with revenue more than $1 million in YA 2018 |
| 2020 onwards | All companies |
e-File your ECI
Step 1: Before e-Filing, please ensure:
- You have been authorised by the company as an "Approver" for Corporate Tax (Filing and
Applications) in Corppass; and
- You have your Singpass as well as the company's tax reference number.
For assistance on Corppass setup, please refer to Step-by-Step Guides.
Step 2: e-File via mytax.iras.gov.sg
For
assistance on e-Filing, please refer to the relevant guides:
Pay Your Taxes in Instalments through GIRO
Only Singapore-registered companies that are on GIRO are allowed to pay their taxes in instalments. Companies that do not have an existing GIRO arrangement for Corporate Tax are encouraged to
apply for GIRO at least 3 weeks before e-Filing their ECI.
If the GIRO arrangement is not approved before the payment due date, the company will not be eligible for instalment payment and will need to pay the full amount of estimated tax by the payment due date. You can check the status of your company's GIRO application through the
Corporate Tax Integrated Phone Service (PDF, 371KB).
| Tax Payable on First ECI e-Filed Within | Number of Instalments Given |
|---|
| 1 month from financial year end | 10 |
| 2 months from financial year end | 8 |
| 3 months from financial year end | 6 |
| After 3 months from financial year end | No instalments allowed |
e-File by 26th of each qualifying month to enjoy the maximum number of instalments allowable for that month.
Company A's financial year ends in Dec.
| e-File by | Number of Instalments Given* |
|---|
| 26 Jan | 10 |
| 26 Feb | 8 |
| 26 Mar | 6 |
| After 26 Mar | No instalments |
Following Example 1 above, Company A e-Files its ECI in Jan and ten instalments are granted for the tax payable of $10,000.
e-Filing Date | Between 1 and 20 Jan | Between 21 and 26 Jan |
|---|
| 1st GIRO Deduction On | 6 Feb | 6 Mar |
|---|
Deduction Amount | $1,000 | $2,000 |
|---|
Subsequent Deduction | Thereafter, $1,000 will be deducted on the 6th of each month from Mar to Nov. | There is no GIRO deduction on 6 Feb. The instalment amount for Feb and Mar will be deducted together on 6 Mar. Thereafter, $1,000 will be deducted on the 6th of each month from Apr to Nov. |
|---|
Calculation of ECI
Companies need not factor in the
Tax Exemption Scheme for New Start-Up Companies/
Partial Tax Exemption and the YA 2020
Corporate Income Tax (CIT) rebate when filing their ECI. IRAS will compute these and allow the New Start-Up Companies/ Partial Tax exemption and YA 2020 CIT rebate automatically.
Property developers should report their ECI based on the Completed Contracts Method.
Example: Calculation of ECI for YA 2020
Your company’s Profit and Loss statement for financial year 2019 (Year of Assessment 2020) is as follows:
| Sales | $80,000 |
| Less: Cost of goods sold | $(35,000) |
| Gross Profit | $45,000 |
| Other Income: | |
| Rental Income | $1,200 |
| Less: Expenses | |
| Advertisement | $(790) |
| CPF | $(2,300) |
| Depreciation | $(300) |
| Directors’ fees | $(9,000) |
| Printing and Stationery | $(290) |
| Property Tax (rental property) | $(300) |
| Salaries | $(24,000) |
| Secretarial Fees | $(310) |
| Transport ($200 was incurred on car SJX 123) | $(780) |
| Travelling Expenses | $(560) |
| Water & Electricity | $(925) |
| Net Profit before Tax | $6,645 |
The company also purchased a new private car (SJX 123), a computer for $1,200 and a filing cabinet for $300 in YA 2020. There were no unutilised capital allowances brought forward from the previous YA.
The calculation of the company’s ECI is as follows:
| Net profit before Tax | $6,645 |
| Less: Separate Source Income | |
| Rental Income | $(1,200) |
| Add: Disallowable Expenses | |
| Depreciation | $300 |
| Property Tax (Rental Property) | $300 |
| Transport (S-plated car) | $200 |
| Adjusted profit before Capital Allowances | $6,245 |
| Less: Capital Allowances for YA 2020 1 | |
|
100% Write-Off for Low-Value Asset - Filing Cabinet | $(300) |
| 100% Write-Off in One Year for Computer | $(1,200) |
| Adjusted profit after Capital Allowances | $4,745 |
| Add: Separate Source Income | |
| Rental income (net of Property Tax for rental income) | $900 |
| Estimated Chargeable Income (before exempt amount) | $5,645 |
When e-Filing the ECI, the company can report its revenue as “$80,000” and ECI figure as “$5,645” under the 17% tax rate category. If the company also qualifies for the
Tax Exemption Scheme for New Start-Up Companies, the company has to indicate accordingly in the relevant box of the ECI return. For more information, please refer to the
File Estimated Chargeable Income (ECI) (PDF, 947KB) user guide.
Please click here (PDF, 164KB) for more examples on how to calculate the ECI.
Getting Your Tax Notice and Paying Estimated Tax
After IRAS has processed your company's ECI, you will receive a Notice of Assessment (NOA), which is an official Notice that states the amount of tax to be paid. You can also view the NOA at mytax.iras.gov.sg. However, no NOA will be issued if your company filed a "Nil" ECI amount.
The tax must be paid within one month from the date of the NOA, unless you are paying via instalment (GIRO).
The NOA will include information on the various ways to pay.
Ways to Pay
There are two ways to pay your taxes:
- Payment by GIRO
Companies that wish to pay taxes by instalment must sign up for GIRO. For more information, please refer to
Apply for GIRO arrangement. - Payment by other Electronic Modes
You can also make payment via internet Banking, Phone Banking, NETS, etc.
For details on other payment modes, please refer to
Electronic Payment Modes.
If your company requires assistance in paying the taxes, please refer to
Experiencing Difficulties in Paying Your Tax for more information.
GIRO Instalment Plans for Singapore-registered Companies
You may qualify for GIRO instalment plan as long as you are a Singapore-registered company.