Companies under Liquidation/ Judicial Management/ Receivership

Companies that have commenced liquidation and companies under judicial management/ receivership are still required to fulfill 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 fulfill 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.

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) (347KB) with IRAS on a yearly basis. This should be filed with IRAS within one month of the end of the period for which the declaration is made.

For example, Company A commenced liquidation on 2 April 2018 and continued to receive income. It should submit the Declaration for the period 2 April 2018 to 1 April 2019 by 1 May 2019. Company A should continue to submit its Declaration for the relevant 12-month period, within one month of the end of the period, on an annual basis.

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 2019 to call for a Final Meeting within the next six months i.e. by 21 Aug 2019. Company A must file the last Declaration, for the period 2 April 2018 to 21 Feb 2019, by 28 Feb 2019 (i.e. seven days from 21 Feb 2019).

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 2019. After the Final Meeting has taken place, Company A will need to submit to IRAS its final financial statements covering the period 2 April 2018 to 21 Aug 2019.

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) (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 2017 and does not receive receipts. On 15 Feb 2019, Company B decides to call for a Final Meeting within the next six months i.e. by 15 Aug 2019. Company B must file the last Declaration, for the period 1 Jun 2017 to 15 Feb 2019, by 22 Feb 2019 (i.e. seven days from 15 Feb 2019).

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 2019. After the Final Meeting has taken place, Company B will need to submit to IRAS its final financial statements covering the period 1 Jun 2017 to 15 Aug 2019.

Guidelines and Worked Examples of Filing Requirements

 

  1. Example 1: Filing of Declaration of Receipts and Payments for Companies with Receipts (402KB)
  2. Example 2: Filing of Declaration of Receipts and Payments for Companies with No Receipts (388KB)
  3. Example 3: Filing of Declaration of Receipts and Payments for Companies which Transit from Having Receipts to Having No Receipts (411KB)
  4. Example 4: Filing of Declaration of Receipts and Payments for Companies which Transit from Having No Receipts to Having Receipts (407KB)
  5. Summary of Examples 1 to 4: Filing Requirements for Declaration of Receipts and Payments (369KB)

Please click here (343KB) for a summary of the liquidation process and filing requirements.

Request for Tax Clearance Letter

Before the liquidator proceeds with the completion of the liquidation process, which may involve calling the Final Meeting, he can rely on the following documents to determine that there is no outstanding tax matter or tax liability:

  • Tax matter - Latest Notice(s) of Assessment issued by IRAS/ confirmation from the company's authorised personnel (e.g. director, tax agent, accountant); and
  • Tax liability - Latest Statement of Accounts issued by IRAS.

With these documents, it is not necessary to request for a "tax clearance" letter from IRAS confirming that the company has no outstanding tax matter or tax liability.

Nonetheless, if the company is under compulsory/ creditors' voluntary liquidation, the liquidator may request for a tax clearance letter from IRAS. 

If the company is under members' voluntary liquidation, IRAS will not issue a tax clearance letter. This is because such a company is solvent and will generally have the ability to repay all its debts within 12 months from the date of commencing winding-up procedures.

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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