Companies under Liquidation/ Judicial Management/ Receivership

Companies that have commenced liquidation and companies under judicial management/ receivership are still required to fulfil certain tax obligations, including submitting their tax returns.

Companies under Liquidation

Companies that have commenced voluntary or compulsory liquidation will have a liquidator appointed by the company or the Court. The liquidator is required to fulfil certain duties prescribed in the Income Tax Act.

Duties of Liquidators

Section 59(2) of the Singapore Income Tax Act provides that the liquidator shall not distribute any of the assets of the company in liquidation to its shareholders unless he has made provisions for the full payment of any tax payable by the company.

The liquidator of a company that has commenced voluntary/ compulsory liquidation is required by law to:

  1. Inform IRAS and submit the notices concerning the appointment of liquidators (Notice of Appointment and Situation of Office of Liquidator);
  2. Submit all outstanding Income Tax Returns (Form C-S/ C) and audited/ unaudited financial statements and tax computation(s) of the company in liquidation up to the date of liquidation;
  3. File the subsequent Receipts and Payments for the liquidation period;
  4. Ensure that the company's outstanding tax matters are resolved before completion of the liquidation process.

Companies filing Form C-S are not required to submit the audited/ unaudited financial statements and tax computation(s) to IRAS. However, these documents are to be prepared and retained for submission upon IRAS' request.

The liquidator must ensure that the books and papers of the company are retained for a period of at least five years from the date of dissolution of the company.

Filing Requirements

A company in liquidation with receipts has to file its Declaration of Receipts and Payments (“Declaration”) with IRAS on an annual basis, while a company in liquidation without receipts has to file its Declaration once every four years.

 New! With effect from 1 May 2021, a company in liquidation is no longer required to split the receipts and payments based on calendar year when filing its Declaration with IRAS. This is in alignment with the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA”) which took effect from 30 Jul 2020. Under the IRDA, liquidators are required to prepare an account of the liquidator's receipts and payments for a period of 12 months after the date of the liquidator's appointment and every subsequent period of 12 months. When filing its Declaration with IRAS, liquidators can adopt the same 12 months period without the need to split based on calendar year. 

Example

Company A commenced liquidation on 25 Aug 2020. The liquidator is required to prepare an account of the liquidator’s receipts and payments for the period from 25 Aug 2020 to 24 Aug 2021. The same period from 25 Aug 2020 to 24 Aug 2021 should be used when filing the Declaration with IRAS. There is no need to split into 2 periods based on calendar year i.e. 25 Aug 2020 to 31 Dec 2020 and 1 Jan 2021 to 24 Aug 2021.

A revised Declaration of Receipts and Payments form will be available from 1 May 2021.

Company in Liquidation with Receipts 

For a company in liquidation that has receipts, the liquidator will have to file a Declaration of Receipts and Payments (With Receipts) (PDF, 347KB) with IRAS on a yearly basis. This should be filed with IRAS within one month from the end of the period for which the declaration is made.

Company A commenced liquidation on 25 Aug 2020 and continued to receive income. It should submit the Declaration for the period 25 Aug 2020 to 24 Aug 2021 by 24 Sep 2021. IRAS will raise an assessment for Year of Assessment (“YA”) 2022 for this Declaration. Company A should continue to submit its Declaration for the subsequent 12-month period, 25 Aug 2021 to 24 Aug 2022 (YA 2023) within one month from the end of the period, i.e. 24 Sep 2022, following which IRAS will raise an assessment for YA 2023.

The last Declaration must be filed within seven days of the decision taken to call for the Final Meeting, which must take place within six months of the decision to call for it. For companies in compulsory liquidation, the Final Meeting is the date of the court order for dissolution.

For example, Company A decides on 21 Feb 2020 to call for a Final Meeting within the next six months i.e. by 21 Aug 2020. Company A must file the last Declaration, for the period 2 April 2019 to 21 Feb 2020, by 28 Feb 2020 (i.e. seven days from 21 Feb 2020).

When the Final Meeting has taken place, the company must submit its final financial statements to IRAS for the period starting from the date of commencement of liquidation to the date of the Final Meeting.

For example, Company A decides to have its Final Meeting on 21 Aug 2020. After the Final Meeting has taken place, Company A will need to submit to IRAS its final financial statements covering the period 2 April 2019 to 21 Aug 2020.

Company in Liquidation without Receipts

For a company in liquidation that has no receipts, the liquidator will have to file a Declaration of Receipts and Payments (With No Receipts) (PDF, 934KB) with IRAS only once every four years.

If the Final Meeting is called less than four years from the date of commencement of liquidation, the company has to file the Declaration with IRAS within seven days of deciding to call the Final Meeting. Do note that the Final Meeting has to take place within six months of the decision to call for it. For companies in compulsory liquidation, the Final Meeting is the date of the court order for dissolution.

For example, Company B commences liquidation on 1 Jun 2018 and does not receive receipts. On 15 Feb 2020, Company B decides to call for a Final Meeting within the next six months i.e. by 15 Aug 2020. Company B must file the last Declaration, for the period 1 Jun 2018 to 15 Feb 2020, by 22 Feb 2020 (i.e. seven days from 15 Feb 2020).

When the Final Meeting has taken place, the company must submit its final financial statements to IRAS for the period starting from the date of commencement of liquidation to the date of the Final Meeting.

For example, Company B decides to have its Final Meeting on 15 Aug 2020. After the Final Meeting has taken place, Company B will need to submit to IRAS its final financial statements covering the period 1 Jun 2018 to 15 Aug 2020.

Please click here (PDF, 535KB) for worked examples of filing requirements.Updated! 

Please click here (PDF, 480KB) for a summary of the liquidation process and filing requirements. 

Completion of Liquidation

New! With effect from 1 May 2021, IRAS will no longer issue tax clearance letter for all companies under liquidation. Before the liquidator proceeds with the completion of the liquidation process, which may involve calling the Final Meeting, he can login to myTax Portal and rely on the following documents to establish if the company indeed has no outstanding tax matter or tax liability:

  • Tax matter - Latest Notice(s) of Assessment issued by IRAS; and
  • Tax liability - Latest Statement of Accounts issued by IRAS.

Companies under Judicial Management/ Receivership

A company under judicial management/ receivership is still required to submit the Income Tax Return (Form C-S/ C), audited/ unaudited financial statements and tax computation to IRAS yearly.

Companies filing Form C-S are not required to submit audited/ unaudited financial statements and tax computations to IRAS. However, these documents should be prepared and submitted to IRAS upon request.

 

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