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 (195KB) 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 the Year of Assessment (YA) 2018 has been selected for review, you can expect to receive an enquiry letter by 30 Sep 2019.

    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 request 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 affairs are subject to more in-depth reviews of their yearly Income Tax Returns. Pending the reviews 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 affairs, whose Income Tax Return is subject to an in-depth review, can expect to receive a Notice of Estimated Assessment (NOA Type 3) relating to YA 2018, if any, by 28 Feb 2019.

    Enquiries and tax adjustments may be made when IRAS reviews the Income Tax Returns subsequently. Notices of Assessment (NOA Type 4) will be issued to the companies 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 Notice of Assessment (NOA Type 4) for YA 2018 by 30 Nov 2020. Prior to receiving the NOA , the company should submit the Income Tax Return for the current YA (i.e. YA 2019) based on the YA 2018 tax position filed with IRAS*. The YA 2019 Income Tax Return should be submitted by the filing due date, i.e., 15 Dec 2019 (for e-Filing)/ 30 Nov 2019 (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 2019, for setoff against the taxable income of YA 2019, should be based on the YA 2018 tax computation prepared by the company.

    From YA 2018, to improve companies' e-Filing experience, the following amounts will be pre-filled:
    - Unutilised Capital Allowances brought forward
    - Unutilised Losses brought forward
    - Unutilised Donations brought forward
    - Current year Approved Donations
    - Unutilised Investment Allowances brought forward (applicable to Form C only)

    The pre-filling is based on the carried forward amounts in the last assessment raised by IRAS for the immediate preceding YA. This will apply even if the assessment for the immediate preceding YA is under objection or query.

    If the return for the immediate preceding YA is under review, the pre-filling will be based on the carried forward amounts declared in the Form C-S/ C of the immediate preceding YA.
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 the company qualifies for the 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 "Revise/ Object to Assessment". Alternatively, you can complete and submit the objection form downloadable from www.iras.gov.sg (Quick links > Forms).

Yes, if you do not agree with the tax assessment

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 "Revise/ Object to Assessment". Alternatively, you can complete and submit the objection form downloadable from www.iras.gov.sg (Quick links > Forms).

Yes, if you do not agree with the tax assessment

Filing Revisions and Disclosing Errors

Companies that need to submit revised income tax computations subsequent to the filing of their Income Tax Returns are strongly encouraged to file the revisions via the Revise/ Object to Assessment e-Service in mytax.iras.gov.sg. (Please do not submit the revised tax computation(s) under the Submit Document e-Service.)

Alternatively, you may complete the Form for Filing Revised Income Tax Computation(s) (103KB) and submit it together with your revised income tax computation(s). In addition, for revisions to Form C-S, please submit your financial statements.

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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