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Corporate Compliance Requirement | Dormant Company Filing Requirement
This article is to share with you more information about Dormant Company Filing Requirement which 3E Accounting will take care for you if you engage our services. Feel free to contact us should you have any queries.
What is considered dormant company?
The definition of dormancy differs somewhat between IRAS (Inland Revenue Authority of Singapore) and ACRA (Accounting and Corporate Regulatory Authority). In some cases, a company that is defined as “dormant” by IRAS can be considered as “active” by ACRA.
Dormant company according to IRAS
A company that does not have any revenue or income during a given financial period is considered Dormant by IRAS even though it may have booked or incurred expenses.
Dormant company according to ACRA
ACRA defines a company as dormant during a period in which no accounting transaction occurs.
Transactions that will not affect the dormant status of the company:
- The appointment of a secretary of a company;
- The appointment of an auditor;
- The maintenance of a registered office;
- The keeping of registers and books;
- The payment of fees to the Registrar or an amount of any fine or default penalty paid to ACRA; and
- The taking of shares in the company by a subscriber to the constitution in pursuance of an undertaking in the constitution.
What filing requirement is needed for dormant company?
Obligation to File Income Tax Return (Form C-S/ C)
As per IRAS’s definition, a dormant company is one that does not carry on business and had no income for the whole of the basis period. For example, if a company did not carry on business and had no income for the whole of the basis period ending in year 2016, it will be regarded as a dormant company for Year of Assessment (YA) 2017.
A dormant company must submit its Income Tax Return unless the company has been granted waiver of Income Tax Return submission.
From $500 (W/GST $535), you may engage our services for submission of Income Tax Return (Form C-S/ C) for a dormant company.
Applying for a Waiver of Income Tax Return (Form C-S/ C) Submission
A dormant company can apply to IRAS to be released from its obligation to file its income tax return (Form C-S/ C) if the qualifying conditions are satisfied. This is commonly known as the “Waiver to Submit Income Tax Return”. The qualifying conditions for the company are:
- It must be dormant and has submitted either its Form C-S or Form C, accounts and tax computations up to the date of cessation of business;
- It must not own any investments (e.g. shares, real properties, fixed deposits). If the company owns investments, it must not derive any income from these investments;
- It must have been de-registered for Goods and Services Tax (GST) purposes prior to this application if it had previously been a GST-registered company; and
- It must not have the intention to recommence business within the next 2 years.
With $250 (W/GST $267.50) only, we can assist you in applying for a Waiver of Income Tax Return.
Once a dormant company re-commences business, or starts to receive any income, the company has to notify IRAS within one month from the date the income is earned or received by completing and submitting the form “Request for Income Tax Return (Form C-S/ C) and Notification of New Financial Year End”.
ACRA’s requirement on Annual Return Filing
With effect from 3 January 2016, a dormant company which fulfils the following criteria is exempted from preparing, auditing and filing of financial statements with ACRA:
(i) Which is not a listed company or a subsidiary company of a listed company; and
(ii) Whose total assets at any time during the financial year ≤ $500,000; and
(iii) Which, if it is a parent company (which is not itself a subsidiary company of another corporation), belongs to a group the consolidated total assets at any time during the financial year ≤ $500,000.
A dormant listed company or a subsidiary company of a listed company, a dormant company which itself is a subsidiary company of another corporation and belongs to a group which do not fulfill the substantial asset test must prepare financial statements but are exempted from audit if they fulfil the audit exemption requirement.
For a dormant company which is exempted to prepare financial statements, you may still choose to voluntarily prepare the financial statements and we can assist to prepare it at a fee from $500 (W/GST $535).
Kindly be reminded that all dormant companies which are required to prepare financial statements will still need to prepare it in accordance with the SFRS (Singapore accounting standards), convene its AGM (unless exempted subject to specified safeguards) and complete annual return filings with ACRA within the prescribed time limits. We can assist you to prepare the financial statements at a minimum fee of $500 (W/GST $535) if the company is dormant. Please refer to Dormant Company Package Fee for more information.
Dormant companies are still required to file their annual returns under the Companies Act, within one month of holding the AGM or within the timeline as stipulated. Kindly be reminded that annual return filing is part of our Secretarial Package services which cost only $700 (W/GST $749) per year. Please see Corporate Secretarial Services for detailed package information.