1. IRAS requires all businesses in Singapore to file their Estimated Chargeable Income (ECI)for every Year of Assessment (YA). Estimated Chargeable Income (ECI) is an estimate of your company’s taxable profits after deducting tax-allowable expenses for a Year of Assessment (YA).
2. Your company has to file ECI within 3 months from the end of your financial year unless it meets the following conditions for exemption:
- Your company qualifies for the ECI filing waiver; or
- Your company is specifically not required to file ECI.
3. Your company does not need to file ECI in any Year of Assessment (YA) when the following conditions are met:
- Annual revenue is $5 million or below for the financial year; and
- ECI is nil for the YA. The ECI should be the amount before deducting the exempt amount
4. You can enjoy the maximum number of instalments when your company files early, i.e. by the 26th of each qualifying month. The earlier your company files, the greater the number of instalments it can enjoy. Your company must also be a Singapore-registered company and be on Giro.
5. As mentioned above, the ECI amount that your company files should be the company’s taxable profits after deducting tax-allowable expenses and before deducting the exempt amount. IRAS will compute and allow the tax exemption amount automatically, depending on whether your company qualify for new start-up companies exemption or partial tax exemption.
6. Once the ECI is filed, you can expect to receive your company’s Notice of Assessment after IRAS has processed the ECI filing. The Notice of Assessment will states the amount of tax that you need to pay, if any. However, IRAS will not issue a Notice of Assessment if your company files nil for ECI.
7. As you can see, there are a lot of work to be done when computing the ECI. It is recommended that you engage a tax expert like us so as not to submit the ECI amount and pay extra tax to IRAS. Furthermore, to enjoy the maximum number of instalments when your company files ECI early, you can engage tax experts that know the details required to compute the ECI as fast as possible.
8. Please contact us if you require help in filing your company’s ECI. At PL Biz Consulting Pte Ltd, we have the tax experts with many years of experience to advise and help you to compute and file the correct ECI amount. Filing the correct ECI amount will ensure that you pay the correct amount of tax to IRAS.
