This guide serves as a comprehensive introduction to the tax obligations of a Singapore registered Dormant Companies. It is written to be easy to understand, as well as containing relevant and accurate information. For feedback, please write to us at [email protected].
First things first, when the topic is about Singapore Taxes – you must first understand what is Year of Assessment.
Tax Obligations of a Singapore Dormant Company
A common misunderstanding from the directors and owners of a dormant company is that a dormant company does not need to file its taxes.
In actuality, dormant companies have the exact same tax obligations as live active companies. The following are the 2 tax obligations:
|Tax Obligations||Due Date|
|1. Estimated Chargeable Income (ECI)||3 Months After Financial Year End|
|2. Form C / Form C-S / Form C-S (Lite)||30th November every Year of Assessment|
Waiver to file IRAS Income Tax
Dormant companies may relieve their tax obligations, and choose to not file their taxes – only if they have both applied for, and gotten approval for the waiver of income tax return submission.
Qualifying conditions in order to apply for the waiver are:
- It must not have received any revenue or income for the whole duration of its financial year end and tax computations up to the date of cessation of business / start of its financial year end for which its applying the waiver for.
- It must not own any investments (e.g. shares, real properties, fixed deposits). If the company owns investments, these investments must not have provided or contributed any income or revenue to the company.
- If company is a GST registered entity, then it must first de-registered for Goods and Services Tax (GST) purposes prior to this application.
- It must not have the intention to recommence business within the next 2 years.
How to Apply for Waiver of Income Tax Return Submission
The application can be done online, or through hardcopy. For online submissions, do note that the authorised permission and role as an “Approver” must be granted in CorpPass for the eService “Corporate Tax (Filing and Applications)”.
Processing time for the outcome of the waiver application
Online Applications may take up to 2 months.
Hardcopy Applications may take up to 3 months.
Recommencing Business, or Converting to a Live Company
Once a dormant company recommences business, or starts to receive any income, the company has to notify IRAS within one month from the date of commencement of business or earning/ receiving the income by writing to [email protected] to request for an Income Tax Return with all the following details (indicate “N/A” if not applicable):
- Subject header: “Recommencement of business and request for Income Tax Return”
- Name and Unique Entity Number (UEN) of the company;
- Date of recommencement of business in dd/mm/yyyy format;
- Date of receipt of other source(s) of income (e.g. interest, dividend, rent, etc.) in dd/mm/yyyy format; and
- New principal activity and the effective date of change in dd/mm/yyyy format together with a copy of BizFile extracted from ACRA showing the principal activity of the company.