Once you have your company set up, you may be wondering what are the next steps that your company has to comply with in order not to miss any statutory deadline. We have highlighted a few statutory requirements that every Singapore company should comply with. Note that failure to comply with these statutory requirements may result in fines or prosecution
Preparation of Financial Statements
Annual Financial Statements must be prepared in accordance with the Singapore Financial Reporting Standards (SFRS). Bookkeeping can be performed monthly, quarterly, once every half year or annually according to the volume and complexity of the transactions. If you have more voluminous amount of transactions, we suggest for bookkeeping to be kept in a monthly basis.
Registering for Goods and Services Tax (GST)
Your liability of GST Registration depends on the value of taxable turnover. You must register for GST if:
- Your taxable turnover at the end of the calendar quarter (i.e. 3 months ending Mar, Jun, Sep or Dec) prior to 1 Jan 2019 and the past three quarters is more than $1 million.You will have to monitor at the end of every calendar quarter and register for GST if your taxable turnover for the past 12 months exceeds $1 million
- Your taxable turnover at the end of any calendar year on or after 1 Jan 2019 is more than $1 million.
For periods on or after 1 Jan 2019, taxable turnover will be computed on a calendar year basis for the purpose of determining registration liability. You have to monitor at the end of every calendar year (i.e. 31 Dec) and register for GST if your annual taxable turnover exceeds $1 million.
If at any time you can reasonably expect your taxable turnover in the next 12 months to be more than $1 million.
You will have to register for GST when there is certainty that your taxable turnover will exceed $1 million in the next 12 months. You must have supporting documents to support your forecast value of $1million. For example:
- Signed contracts or agreements
- Quotations accepted by customers
- Confirmed purchase orders received from customers
- Invoices to customers with fixed monthly fee charged
- Income statements showing that past 12-month period was already close to $1 million and that annual turnover is on an increasing trend
On the other hand, you are not required to register for GST if there is no certainty that your taxable turnover will exceed $1 million in the next 12 months. For example, you made a forecast based on market assessment, business plans or sales targets.
Filing of Estimated Chargeable Income (ECI)
Singapore companies are required to declare the amount of revenue and Estimated Chargeable Income (ECI) by filing the ECI online with Inland Revenue Authority of Singapore (IRAS) within 3 months from the financial year end of your company.
Companies may receive a waiver to file ECI if:
- Its annual revenue is not more than $5 million for the financial year, and
- ECI is nil for the Years of Assessment (YA). The ECI amount should be the amount before deducting the exempt amount under partial tax exemption scheme or tax exemption scheme for new start-up companies.
Auditing of Financial Statements
Based on the revised audit requirements with effect from 1 July 2015, an audit is not required for a Private company if it meets 2 out of the 3 quantitative criterias for 2 consecutive financial years:
- Total annual revenue ≤ $10 million
- Total assets ≤ $10 million
- No of employees ≤ 50 (counted at the last day of financial year)
If the company is part of a group, the assessment needs to be assessed as a ‘group.’
Should you require any assistance to assess whether your company requires audit, do not hesitate to contact JSE Offices via the chat box or do drop us your enquiry here for more enquiries.