Tax Assessment Process

IRAS adopts a risk-based approach in reviewing the Income Tax Returns of companies. 

Risk-Based Approach to Tax Assessments

IRAS adopts a risk-based approach in reviewing the Income Tax Returns of companies. Companies are profiled based on the complexity of their businesses and tax matters, and risk to revenue. This flowchart illustrates the return review process for companies.

The assessment process begins when the Income Tax Returns are received by IRAS. The Income Tax Returns are then segregated according to the complexities of their tax affairs.

  1. Companies with Straightforward Tax Affairs
    Companies with  straightforward tax affairs generally do not require detailed reviews of their Income Tax Returns on a year-to-year basis. The companies' tax declarations in Income Tax Returns are accepted upfront by IRAS with little or no adjustment.

    The assessments are completed based on the companies' declarations in the Income Tax Returns and Notices of Assessment (NOA Type 4) are issued to the companies by 31 May of the following year.
     

    To complement our risk-based approach, IRAS conducts a review on a small percentage of companies with straightforward tax affairs by reviewing selected returns under its various compliance programmes. If your company has been selected, you can expect to receive an enquiry letter from IRAS by 30 Sep of the following year. For example, if your company's Income Tax Return for YA 2017 has been selected for review, you can expect to receive an enquiry letter by 30 Sep 2018.

    The objectives of such checks are to ensure that the Income Tax Returns submitted are complete and accurate and assessments are in order. Where necessary, IRAS may call for supporting documents from companies to substantiate their declarations. Amended/additional Notices of Assessment (NOA Type 4) may also be issued to the companies if tax adjustments are made in the course of such compliance reviews.

     

  2. Companies with More Complex Tax Affairs

    On the other hand, companies with more complex tax matters are subject to more in-depth review of their yearly Income Tax Returns. Pending the review of the Income Tax Returns, estimated assessments may be raised based on the companies' declaration in their Income Tax Returns. Notices of Estimated Assessment (NOA Type 3) may first be issued to the companies. Such companies can expect to receive the NOA by 28 Feb of the following year. For example, a company with more complex tax matters, whose Income Tax Return is subject to in-depth review, can expect to receive a Notice of Estimated Assessment (NOA Type 3) relating to YA 2017 , if any, by 28 Feb 2018.

    Enquiries and tax adjustments may be made when IRAS reviews the Income Tax Return subsequently. A Notice of Assessment (NOA Type 4) will be issued to the company after IRAS has reviewed the returns. Companies can expect to receive the NOA by 30 Nov of the second year. For example, the company can expect to receive the NOA for YA 2017 by 30 Nov 2019. Prior to receiving the Notice of Assessment (NOA Type 4), the company should submit the Income Tax Return for the current YA (i.e. YA 2018) based on the YA 2017 tax position filed with IRAS*. The YA 2018 Income Tax Return should be submitted by the filing due date, i.e., 15 Dec 2018 (for e-Filing)/ 30 Nov 2018 (for paper filing).

    *The unutilised loss items and tax written down values of assets (for the purposes of computing capital allowances) to be carried forward to YA 2018, for setoff against the taxable income of YA 2018, should be based on the YA 2017 tax computation prepared by the company.
Regardless of whether a company has straightforward or complex tax affairs and whether a NOA Type 4 (completed assessment) has been issued, IRAS may review the company's Income Tax Return(s) should there be new information brought to IRAS' attention. This is subject to the time limit imposed on IRAS with regard to the revision of tax assessments.

Types of Notices of Assessment

This section below summarises the different types of NOAs issued and whether it is necessary to object to each type of NOA.

No NOA will be issued when a Nil ECI is filed.
When a positive ECI is filed, the message is as follows:

Message on NOA

Objection Required

This is an estimated tax assessment based on the information given by you or your tax agent.

 

You therefore need not object to this assessment.

No

ECI raised by IRAS due to:

  • failure to file ECI within three months from the end of the financial year (excludes cases where company qualifies for waiver to file the ECI under an administrative concession);
  • failure to file Form C-S/ C by the filing deadline;
  • low ECI declared (ECI filed is lower than the tax reported on the Income Tax Return); and
  • Advance assessment.

Message on NOA

Objection Required

This is an estimated tax assessment as we have not received your estimate of chargeable income/ Form C/ Form C-S etc.

 

If you wish to object to the assessment, please do so within two months from the date of this Notice. To file the objection, please log in to myTax Portal (mytax.iras.gov.sg) under "Object/ Revise Assessment". Alternatively, you can complete and submit the objection form downloadable from www.iras.gov.sg (Quick links > Forms).

Yes.

This is an estimated tax assessment based on the information given in your Form C-S/ C. Due to a difference in the ECI declared (Type 1) and the information given in the Form C-S/ C, we have revised the ECI amount automatically based on the information given in the Form C-S/ C. There is no need to object to this assessment.

Message on NOA

Objection Required

This is an estimated tax assessment based on the information given in your Form C/ Form C-S.

 

You therefore need not object to this assessment.

No

Message on NOA

Objection Required

 This is your tax assessment.

 

If you wish to object to the assessment, please do so within two months from the date of this Notice. To file the objection, please log in to myTax Portal (mytax.iras.gov.sg) under "Object/ Revise Assessment". Alternatively, you can complete and submit the objection form downloadable from www.iras.gov.sg (Quick links > Forms).

Yes

Exempt Income/Loss in Notices of Assessment

Prior to YA 2009, a separate Exempt Dividend Account (EDA) Statement and Notice of Computation of Profit were issued for income exempt from tax under:

Income Tax Act (ITA)

Code in Form C

Section 13A: Shipping enterprise

105

Section 13F: Approved international shipping enterprise

108

Section 13H: Approved venture company

110

Section 13S: Approved shipping investment enterprise

121

Economic Expansion Incentives Act (EEIA)

Code in Form C

Part II: Pioneer enterprise

601

Part III: Pioneer service company

602

Part VIA: Export service company

618

Part XIIIB: Overseas enterprise

626

Under the one-tier corporate tax system effective YA 2009, it is no longer necessary to track the balance of exempt income and the amount of normal exempt dividends paid by companies.

The above types of exempt income/loss will be reflected in the NOA (i.e. companies will no longer receive the EDA Statement and Notice of Computation of Profit).

Filing Revisions and Disclosing Errors

Companies that need to submit revised income tax computations subsequent to the filing of their Income Tax Returns are encouraged to complete the Form for Filing Revised Income Tax Computation(s) (108KB) and submit it together with their revised income tax computations. Alternatively, they can also write to IRAS, stating the Year of Assessment (YA) affected, item(s) revised for the relevant YA and reason(s) for making the revision.

Disclosure of errors or omissions via revised income tax computation(s) (excluding situations where companies are selected for an audit/investigation by IRAS) may be considered as a Voluntary Disclosure.

For details, please refer to IRAS Voluntary Disclosure Program.

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