What you need to know for Corporate Tax filing season 2020


  • Corporate Tax Filing 2020: All companies, including those that did not carry on their business or have incurred a loss, must electronically file (e-File) their Year of Assessment (YA) 2020 Income Tax Returns (Form C-S/ C) by 15 December 2020.

  • To help SMEs with simpler tax affairs reduce their regulatory burden, IRAS and ACRA have partnered accounting software providers to co-create a new digital solution that allows qualifying companies to automate the preparation and filing of Form C-S and annual returns to IRAS and ACRA respectively via accounting software.

  • To help companies with their cash flow, a Corporate Income Tax Rebate of 25 per cent of tax payable, capped at $15,000, will be granted for YA 2020. Find out more about Corporate Tax Filing 2020 below.



  • Posted on 19 November 2020



    Corporate Tax filing 2020

    Corporate Tax Filing 2020: The filing deadline for Form C-S/ C is 15 Dec 2020. PHOTO from ED#94 2020 Nov/Dec Pg 42




    Corporate Tax filing season has begun and all companies, including those that did not carry on their business or have incurred a loss, must electronically file (e-File) their Year of Assessment (YA) 2020 Income Tax Returns (Form C-S/ C) by 15 December 2020. e-File your taxes early to avoid any last-minute rush.

    With compulsory e-Filing, paper submissions of Form C-S/ C will no longer be accepted. In this article, the Inland Revenue Authority of Singapore (IRAS) brings you the latest developments in Corporate Tax filing and some useful filing tips for companies.



    What You Need To Know About Corporate Tax filing 2020



    1. Filing made easy for small companies with a suite of new filing initiatives


    From YA 2020, small and medium enterprises can enjoy an easier tax filing experience with the following new initiatives:

    a) e-Filing of Form C-S (Lite)

    Companies who qualify to e-File Form C-S and have an annual revenue of $200,000 or below now have the option to e-File Form C-S (Lite), a simplified version of Form C-S.

    For companies with straight-forward tax matters, Form C-S (Lite) requires only six essential fields to be completed, which is a two-third reduction in the number of fields as compared to Form C-S.

    b) Using accounting software to prepare and e-File Form C-S seamlessly

    To help smaller companies with simpler tax affairs reduce their regulatory burden, IRAS and ACRA have partnered accounting software providers1 to co-create a new digital solution that allows qualifying companies to automate the preparation and filing of Form C-S and annual returns to IRAS and ACRA respectively via accounting software.

    The digital solution leverages Application Programming Interface (API) technology to simplify the tax filing process for companies and reduces their risk of making errors.

    Aside from simplifying the filing process, companies can also enjoy the following benefits when using the enhanced accounting software:

      • It serves as a primary record-keeping tool as all business transaction records, including invoices and receipts, will be digitised.

      • Tax returns and tax computations are auto-generated through the software (i.e. automatic conversion of financial and accounting data).

      • Users will be able to take less than 30 minutes to prepare and e-File their Form C-S as compared to nine hours of manual preparation and filing.

    Visit go.gov.sg/citseamlessfiling for more information on the qualifying conditions for using this digital solution.

    Did you know? Government grants are available for qualifying companies who wish to buy the software solutions. Find out more details when you visit the websites of the Infocomm Media Development Authority and Enterprise Singapore.



    2. Key tax changes for YA 2020


    To help companies with their cash flow:

      • A Corporate Income Tax Rebate of 25 per cent of tax payable, capped at $15,000, will be granted for YA 2020; and

      • The Loss Carry-Back Relief has been enhanced for YA 2020. Companies can choose to opt for the current carry-back relief system or enhanced carry-back relief system for YA 2020.

    Companies may also visit go.gov.sg/commontaxreliefs for more information on how to lower their tax burdens by claiming the various tax reliefs.

    3. Helpful tips when filing your Corporate Income Tax Return


    When submitting your YA 2020 Corporate Income Tax Return, it is important to ensure that the information is complete and accurate. A penalty of up to 200 per cent of the amount of tax undercharged may be imposed for the incorrect Tax Return filed.

    Refer to the table below for some tips to ensure that your submission is error-free.



    Common MistakesWhat to Do
    Donations
    • Not adding back donations in the tax computation

    • Making donations for the company through a related or third-party

    • Ensure that the necessary tax adjustments are made for a donation to an approved Institution of Public Character (IPC) when computing the adjusted profit

    • Ensure that the company’s identification number is provided to the IPC and a receipt is issued to the name of the company making the donation

    • To claim a tax deduction on donations not reflected in myTax Portal, check with the respective IPCs to rectify the issue

    Motor Vehicle ExpensesClaiming tax deductions on private car (i.e. S-plated cars) expenses such as petrol, insurance, road tax, parking and ERP chargesMake tax adjustments to exclude all private car expenses regardless of whether the car was used for business purposes
    ProvisionsClaiming deductions on provisions for expenses such as foreseeable losses and unutilised leaveAdd back all the provisions made and have supporting documents to substantiate the claim for the amount of provisions being utilised
    Renovation & Refurbishment (R&R) Expenditure (Section 14Q Deductions)
    • Claiming Section 14Q deductions on non-qualifying items such as designer fees, professional fees, as well as R&R works where approval of the Commissioner of Building Control is required

    • Claiming deductions that exceed the cap of $300,000 for every relevant three-year period.

    • Ensure that the R&R works are incurred on qualifying items before making the claim

    • Ensure that the claim does not exceed the cap of $300,000 for every relevant three-year period

    Other Nondeductible expensesClaiming nondeductible expenses such as personal travel or entertainment expenses that are not related to the running of the business.Segregate personal and non-deductible expenses and ensure that such amounts are disallowed in the tax returns


    To learn about other common filing mistakes and tax treatments for various business expenses, visit go.gov.sg/irascompliance and go.gov.sg/businessexpenses.

    Voluntary disclosures can also be made under IRAS’ Voluntary Disclosure Programme when mistakes are discovered. No penalties will be imposed if the voluntary disclosure is made within one year from the statutory filing date.

    A reduced penalty will apply for disclosures made after the grace period of one year.

    Did you know? A dormant company must e-File its Income Tax Return unless it has been granted a waiver of Income Tax Return Submission.


    4. Single filing deadline from YA 2021


    Lastly, all companies will be required to e-File their Corporate Tax Returns by 30 Nov from YA 2021 onwards. The extended deadline of 15 December will no longer apply.

    Still have Corporate Tax enquiries or need filing assistance? Check out go.gov.sg/CIT2020 for information on YA 2020 Corporate Income Tax filing.

    You can also get in touch with IRAS officers via myTaxMail or call the helpline at 1800 356 8622.


    Note: The information presented in the article aims to provide a better general understanding of taxpayers’ tax obligations and is not intended to comprehensively address all possible tax issues that may arise. This information is correct as at 30 October 2020.

    While every effort has been made to ensure that this information is consistent with existing law and practice, should there be any changes, IRAS reserves the right to vary its position accordingly.




    Resources:

    1 This solution is now available through Netiquette Software Pte Ltd and SMECEN Pte Ltd (Dashbod). Other accounting software providers that are currently working with IRAS to develop the solution include Autocount Pte. Ltd., Deskera (S) Pte. Ltd. and Realtimme IT Consultancy Pte. Ltd.

    This article was contributed by the Inland Revenue Authority of Singapore (IRAS), and originally appeared in the Entrepreneur's Digest print edition #94. It has been edited for clarity, brevity and for the relevance of this website.