General Rule for All Companies
A company is taxed on the income earned in the preceding financial year. This means that income earned in the financial year 2016 will be taxed in 2017.
Basis Period and Year of Assessment
In tax terms, using the same example as above, 2017 is the Year of Assessment (YA). In other words, the YA is the year in which your income is assessed to tax.
To assess the amount of tax, IRAS looks at the income, expenses, etc. during the financial year. This financial year is known as the "basis period".
The basis period is generally a 12-month period preceding the YA.
Examples Based on Different Financial Year Ends
| Financial Year End | Basis Period | YA |
|---|
| 31 Mar of each year | 1 Apr 2015 - 31 Mar 2016 | 2017 |
| 30 Jun of each year | 1 Jul 2015 to 30 Jun 2016 | 2017 |
| 31 Dec of each year | 1 Jan 2016 - 31 Dec 2016 | 2017 |
The same rule applies to new companies.
Corporate Tax Rate
Tax Schemes to Lower Tax Payable
(1) Tax Exemption Scheme for New Start-Up Companies
Under the scheme, qualifying new companies are given:
- Full exemption on the first $100,000 of normal chargeable income; and
- A further 50% exemption on the next $200,000 of normal chargeable income for the first three consecutive YAs.
For more details on the tax exemption scheme for new start-up companies and the qualifying conditions, please refer to
Common Tax Reliefs That Help Reduce The Tax Bills.
(2) Partial Tax Exemption for all companies
All companies including companies limited by guarantee can enjoy the following:
- 75% tax exemption on the first $10,000 of normal chargeable income; and
- A further 50% tax exemption on the next $290,000 of normal chargeable income.
For more details on the partial tax exemption scheme, please refer to
Common Tax Reliefs That Help Reduce The Tax Bills.
(3) Corporate Income Tax Rebate
Corporate income tax rebate is given to all companies to help them with rising business costs and is applicable for YA 2013 to YA 2018.
All companies will receive a corporate income tax rebate of the following:
- 30% corporate income tax rebate, capped at $30,000 per YA for YA 2013 to YA 2015;
- 50% corporate income tax rebate, capped at $20,000 for YA 2016;
- 50% corporate income tax rebate, capped at $25,000 for YA 2017 Revised!; and
- 20% corporate income tax rebate, capped at $10,000 for YA 2018. New!
Corporate income tax rebate is computed on the tax payable after deducting tax set-offs (e.g. foreign tax credit).
For more details on corporate income tax rebate and how the corporate income tax rebate is computed, please refer to
Corporate Tax Rates, Corporate Income Tax Rebates, Tax Exemption Schemes and SME Cash Grant.
Attribution of Profits/ Losses for New Companies
For details on how to attribute the profits/ losses of new companies where the first set of accounts cover more than 12 months, please refer to the Basic Guide for New Companies.
Tax Forms That Companies Must Submit Yearly
All companies need to submit two corporate income tax forms to IRAS every year:
- Estimated Chargeable Income (ECI) form within three months from the company's financial year end except for (a) companies that fulfil the conditions under the Administrative Concession; and (b) certain entities that are not required to file ECI; and
- Corporate Income Tax Returns commonly known as Form C-S or Form C by 30 Nov of each year except dormant companies for which IRAS has waived the requirement to file.
Key Milestones in a Corporate Income Tax Filing Season for a Company
This flowchart (75KB) summarises the key milestones and important dates to note in a corporate income tax filing season for a company.