Corporate Income Tax (CIT) Rebate on ECI Filed for Years of Assessment (YAs) 2018 and 2019
In Budget 2018, the Minister for Finance announced that the cap for the CIT Rebate for YA 2018 will be raised to 40% of the corporate tax payable subject to a cap of $15,000. This is an increase from the previously announced rebate of 20% of the corporate tax payable, subject to a cap of $10,000. In addition, the CIT Rebate will be extended to YA 2019 at 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 YAs 2018 and 2019 as IRAS will compute and allow the Rebate automatically.
IRAS has started to revise the tax assessments of companies that filed their YAs 2018 and 2019 ECI previously and received Notices of Assessment (NOAs) that did not take into account the CIT Rebate changes. The affected companies can expect to receive the revised NOAs and refunds for the excess tax paid by April 2018. If the company is paying the tax on ECI by instalments, the revised instalment plan will be issued to the company with the revised NOAs.
Companies may also view the revised NOAs at mytax.iras.gov.sg.
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 | Companies with revenue more than $10 million in YA 2017 |
| 2019 | Companies with revenue more than $1 million in YA 2018 |
| 2020 | 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 has a revenue of more than $10 million in YA 2017. The company will be required to e-File its ECI and Form C starting from YA 2018. The deadline for e-Filing its YA 2018 ECI will be 30 Jun 2017 i.e. 3 months from its financial year ending 30 Mar 2017, while its Form C should be filed by 30 Nov 2018.
Methods of Filing ECI
There are two ways to submit your ECI. With the introduction of compulsory e-Filing starting from YA 2018, companies are strongly encouraged to start e-Filing early.
- e-File via mytax.iras.gov.sg
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.
- Paper file
The completed ECI Form can be submitted to IRAS by post:
Inland Revenue Authority of Singapore
55 Newton Road
Revenue House
Singapore 307987- e-Filing of ECI is currently available for YA 2018 and YA 2019. For YA 2017 ECI, please paper file instead.
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 14 days 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 | Paper-Filers |
| 1 month from financial year end | 10 | 5 |
| 2 months from financial year end | 8 | 4 |
| 3 months from financial year end | 6 | 3 |
| 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.
Paper file by 24th of each qualifying month to enjoy the maximum number of instalments allowable for that month.
| e-File by | Number of Instalments* | Paper-file by | Number of Instalments* |
|---|
26 Jan | 10 | 24 Jan | 5 |
26 Feb | 8 | 24 Feb | 4 |
26 Mar | 6 | 24 Mar | 3 |
After 26 Mar | No instalments | After 24 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 YAs 2018 and 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 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)” 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 by submitting a GIRO application. - 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.