Taxable Period:
In Singapore, the tax basis period is typically the calendar year (January 1 to December 31). However, if a company uses a different accounting period (like a financial year that doesn’t match the calendar year), the tax authorities will usually accept that accounting period instead.
In simple terms: Taxes are based on the calendar year by default, but they’ll follow your company’s accounting year if it’s different.
Tax Returns:
Tax is computed for each tax year based on the income earned in the preceding year (the tax basis period). The corporation files an estimate of its income within three months of the end of the accounting period followed by a return of income by 30 November of the tax year, and the tax is assessed by the Comptroller of Income Tax.
All companies are required to file their tax returns electronically.
There is no fixed date for the issue of assessments.
Payment of Tax:
In Singapore, once you get a tax assessment notice, you must pay the assessed tax within one month—even if you disagree and file an objection with the tax authorities.
Application may be made to the Comptroller to pay estimated tax liabilities on a monthly basis. However, the Comptroller is under no obligation to grant such an application.
Late payment of tax will attract penalties, up to a maximum of 17% of the outstanding tax.
Tax Audit Process:
The IRAS adopts a risk-based approach to identifying compliance risk, with a focus on improving the behaviour of taxpayers who pose a higher risk of non-compliance.
It also prioritises and tailors specific compliance programmes that aim to identify taxpayers who have made mistakes in their tax returns, create an audit presence in the community to deter non-compliance by other taxpayers, educate taxpayers on their tax obligations and how to comply with these, and identify areas of tax law, policies, and processes where the tax system can be simplified.
Statute of Limitations:
The statute of limitations is four years from the year of assessment, but does not apply where there has been fraud or wilful default by the taxpayer.
Topics of focus for tax authorities
The IRAS is focusing its compliance efforts on the following:
WHT.
The timely filing of corporate tax returns.
Claiming of private or non-deductible expenses.
The classification of income and expenses for income taxable at concessionary and prevailing corporate tax rates.
The recognition of income from construction contracts and provisions claimed by construction companies.
Companies that are dormant and exempted from filing corporate income tax returns.
Taxability of income/gains from sale of properties.
Digital economy.
Deductibility of interest expenses and borrowing costs.