Before we start to discuss corporate tax filing, let us take a look at corporate income taxes. To those of you who do not know, each and every company is taxed on the income that they have earned in the previous year.
For example, the income that a business earned in the year 2021 will be taxed in the following year which is 2022. A company gets taxed by the government at a rate of 17% of its yearly income, regardless of whether it is a foreign or local company. All companies are required to submit two of their corporate income tax returns to the Inland Revenue Authority of Singapore (IRAS) every year.
So, there are different types of forms to fill for different types of companies. There are its conditions that determine what type of form a company will fill up and submit. You may wonder, what types of incomes are taxable? Well, as long as it is gains or profits from business, income from investments, profits from properties, or anything that is revenue. People tend to make mistakes when it comes to taxation. You have to be careful of wrongful claims, understatement of income and failure to keep the proper records and accounts of your business or such.
Some important things to take into account before doing your yearly corporate tax filings are to understand the overview of the process, properly gathering and maintaining data about your business, and preparing annual financial statements.
It is important to properly understand the overview and yearly changes of Singapore’s corporate tax filing. This is to minimise the risk of making any mistakes in your tax submission. The process will include things like, annual filing requirements, the usage of the different forms, Form C-S and Form C, tax incomes, foreign sources of income and more.
Gathering and maintaining your business data is an important step. Maintaining and regularly updating your data minimises the chances of you leaving out any information that might affect your filing process. Companies are required by law to keep the proper records and accounts of all necessary business transactions that happened in the past year. Companies must retain all types of documents, accounting records and schedules, bank statements, typically any type of transactions that are related to your business.
When companies prepare annual financial statements, they have to make sure that it is done according to the Singapore Financial Reporting Standards. It is highly recommended that you do monthly bookkeeping of your records to keep everything in proper order. You can also choose to do it every few months instead, but it is crucial that the records are done according to the reporting standards set out.
Before doing your yearly corporate tax filing, make sure to consult with your accountant. An accountant will be able to help you keep track of records, help with statutory accounts and tax returns, provide financial advice and more. All in all, it is crucial that you keep updating and maintaining your records so it will be easier when you file your corporate income tax every year.
By doing this, you will not have to rush through tons of paperwork and financial records and you will also be able to minimise the risk of making a mistake.
Interested to find out more about the different types of tax services we offer? Our tax services include:
- Tax Planning & Advisory
- Corporate Income Tax
- GST Compliances
- GST Advisory and ASK Reviews/Audits
- Individual Income Tax
Find out more about our Tax Services here https://www.entrust.sg/services/taxation/.