6 ways to handle your company’s tax matters effectively

This article was contributed by the Inland Revenue Authority of Singapore (IRAS).

It is the time of the year again – Corporate Income Tax (CIT) filing season for the Year of Assessment (YA) 2021 has begun. Before you jump right into it, check out these six initiatives by the Inland Revenue Authority of Singapore (IRAS) that can make Corporate Income Tax filing easy, seamless and convenient for you!

1. Simplified Corporate Income Tax Return: Form C-S (Lite)

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Are you running a company with an annual revenue of $200,000 and below? Is your company qualified to file Form C-S? If your answer is ‘Yes’ to both questions, you can file the simplified CIT Return called the Form C-S (Lite). Introduced last year to make tax filing easier and faster for small companies, those with straightforward tax matters only need to fill up six essential fields such as their revenue and adjusted profit or loss.

8 out of 10 companies filed Form C-S (Lite) in YA 2020. Hear what some of them have to say about the simplified form:

  • “The Form C-S (Lite) is very simple and direct, and has reduced the time I need to file my company’s tax return by 50%.” – Ms Devi, Secretary at E.T. Investments Pte. Ltd
  • “The experience of filing Form C-S (Lite) is quite positive. We welcome these initiatives to make tax filing simpler for companies.” – Ms Guok Hwe Chin, Finance Manager of Megawill Holdings Pte. Ltd

Find out more about the Form C-S (Lite) at www.go.gov.sg/formcs-lite.

2. Seamless Filing with Enhanced Accounting Software

Not qualified to file Form C-S (Lite) because your company’s annual revenue exceeds $200,000? Fret not, you can still enjoy a seamless filing experience with an enhanced accounting software if your company has an annual revenue of $5 million and below. Leveraging on Application Programming Interface (API), the digital solution automates the preparation of tax computations and allows small and medium enterprises (SMEs) to file Form C-S directly from their accounting software to IRAS.

If you are eligible, you should consider using this digital solution as it can significantly reduce the time you spend on preparing and filing the tax returns. Tax filing preparation is simplified as it can be done without the need for tax knowledge (i.e. through an automatic tax conversion tool that retrieves relevant accounting data and converts them into tax data). Besides improving the accuracy of the statutory returns, the initiative allows SMEs to transmit the tax data directly to IRAS instead of keying them manually into the IRAS digital service. What previously took a SME approximately nine hours to prepare and file can now take as little as 35 minutes. This translates to time savings of more than 90%!

The following government support schemes are available to kick-start your seamless filing journey:

  • Start Digital Pack by the Infocomm Media Development Authority
  • Productivity Solutions Grant by the Enterprise Singapore

For more details on the qualifying conditions to use the enhanced accounting software, head to www.go.gov.sg/citseamlessfiling.

3. Qualifying Dormant Companies Can Apply for Waiver to Submit Tax Return

If your company did not carry on a business and had no income for the whole of the basis period ending in year 2020, it will be regarded as a dormant company for YA 2021. However, your company is still required to file a tax return at myTax Portal by 30 Nov 2021 unless your waiver application to submit a tax return has been approved by IRAS.

From 1 October 2021, dormant companies need to apply for the waiver via the “Apply for Waiver/ File last Form C-S/ C (Dormant/ Striking Off)” digital service. This digital service provides companies with the convenience of filing their CIT Returns for advance YA (up to the date of business cessation) where the Form C-S/ C digital service for that YA is not available yet. Paper applications will no longer be accepted.

Visit www.go.gov.sg/irasdormantcompanies to find out more about the qualifying conditions for a waiver.

4. Key Tax Changes in YA 2021

To continue providing support for companies amidst the ongoing pandemic, IRAS has introduced three key tax changes in YA 2021. Your company will have the choice to:

  • Claim the Renovation & Refurbishment (R&R) deduction in one YA instead of over three YAs for qualifying R&R expenditure incurred during the basis period for YA 2021.
  • Accelerate the write-off of plant and machinery (P&M) over two years, instead of three years or over the prescribed working life of the asset, on the cost incurred in acquiring such P&M during the basis period for YA 2021.
  • Elect for either the current carry-back relief system or enhanced carry-back relief system for YA 2021. The enhanced carry-back relief system allows your company to carry back unutilised capital allowances and trade losses from YA 2021 up to three YAs immediately preceding YA 2021 (i.e. YA 2018, YA 2019 and YA 2020)

Visit www.go.gov.sg/cit2021 for more information on these tax changes.

5. Enhanced “Revise/ Object to Assessment” Digital Service

If you have made an error in your tax return, or do not agree with the tax assessment raised by IRAS, you can use the “Revise/ Object to Assessment” digital service on myTax portal to lodge an objection. IRAS has made enhancements to the digital service, including:

  • Pre-loading of the latest CIT Return [Form C/ C-S/ C-S (Lite)] assessment figures for ease of amendments
  • Ability to select from a list of key reasons when disclosing errors
  • Displaying of information on the type of documents that you are required to submit based on your scenario(s)

Along with the enhancements, you can also expect to receive the revised Notice of Assessment earlier.

For more information on this digital service, head to  www.go.gov.sg/iras-objectasst.

6. Receive Tax Refunds Electronically

With effect from 3 January 2022, businesses will receive CIT and GST refunds only via electronic means (i.e. GIRO or PayNow). Cheques for such refunds will no longer be issued. To ensure that your company can receive CIT and GST refunds (if applicable) in the future, do sign up for GIRO or PayNow Corporate with your business’ bank account..

Your company can benefit from e-refunds through the following ways:

  • Receive your tax refunds earlier and automatically in your bank account;
  • Eliminate administrative costs of recording the receipt of cheques and the banking in of cheques;
  • No more lost cheques and the need to contact IRAS to request for cheque reissuance.

 Read more about e-refund methods at www.go.gov.sg/iras-taxrefunds.

Now that you are well aware of these available resources, remember to file your CIT Return by 30 November 2021. All directors are reminded to ensure that their companies’ tax returns are filed on time. If your company needs further assistance on the YA 2021 tax filing, you can visit the IRAS website, contact IRAS via myTax Mail, call the helpline at 1800 356 8622, or find the answers on the IRAS website.