Corporate Income Tax (CIT) Rebate on ECI Filed for Year of Assessment (YA) 2019
For YA 2019, companies will be granted a CIT
tax rebate of 20% of the corporate tax payable, subject to a cap of $10,000.
Companies need not factor in the CIT rebate when filing their ECI for YA 2019 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
As announced in Budget 2016, 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 Corporate Income Tax returns (including ECI, Form C and Form C-S) will be made compulsory in a phased approach from YAs 2018 to 2020 as follows:
| YA | Target Group |
|---|
| 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 |
The phased implementation will provide more time for smaller companies to modify their processes and ease into e-Filing.
- A company
with financial year ending 31 Mar 2018 and has a revenue of more than $1
million in YA 2018 is required to e-File its YA 2019 ECI and Form C by 30 Jun
2018 and 15 Dec 2019 respectively.
With effect
from YA 2020, all companies are required to e-File their ECI and Form C. For
example, a company with financial year ending 31 Mar 2019 is required to e-File
its YA 2020 ECI by 30 Jun 2019 (i.e. 3 months from its financial year ending 31
Mar 2019) and Form C by 15 Dec 2020
e-File your ECI
From YA 2020 onwards, all companies are required to e-File
their 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 the company's tax reference number, your CorpPass ID and CorpPass password.
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 user guides:
Advantages of e-Filing
Companies that e-File their ECI enjoy:
- Instant acknowledgement upon successful e-Filing; and
- A greater number of instalments to pay your company's estimated tax.
Only companies that are on GIRO qualify for instalment payment. 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.
| | No. of Instalments Given (Notes 1 to 3) |
|---|
| Tax payable on first ECI filed within | e-Filers |
| 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.
| e-File by | Number of Instalments* |
|---|
26 Jan | 10 |
26 Feb | 8 |
26 Mar | 6 |
After 26 Mar | No instalments |
Company A's financial year end is December. e-Filing of ECI is done in January and ten instalments are granted for the tax payable of $10,000.
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 2019 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 2019 CIT rebate automatically.
Example: Calculation of ECI for YA 2019
Your company’s Profit and Loss statement for financial year 2018 (Year of Assessment 2019) 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 2019. 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 2019 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) (1.13MB) user guide.
Getting Your Tax Notice and Paying Estimated Tax
After IRAS has processed the ECI form, your company 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 Applying for GIRO. - 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 How to Pay.
GIRO Instalment Plans for Singapore-registered Companies
You may qualify for GIRO instalment plan as long as you are a Singapore-registered company.