CAP for Corporate Income Tax (CIT) Rebates Raised
Singapore’s Minister of Finance, Heng Swee Keat announced in Budget 2018 that the cap for the Corporate income Tax (CIT) Rebate for YA 2018 will be raised to 40% of the corporate tax payable subject to a cap of $15,000. This is an increase from the previously announced rebate of 20% of the corporate tax payable, subject to a cap of $10,000. In addition, the CIT Rebate will be extended to YA 2019 at 20% of the corporate tax payable, subject to a cap of $10,000. The Inland Revenue Authority Of Singapore (IRAS) has started to revise the tax assessments of companies that filed their YAs 2018 and 2019 ECI previously and received Notices of Assessment (NOAs) that did not take into account the CIT Rebate changes.
The affected companies can expect to receive the revised NOAs and refunds for the excess tax paid by April 2018. Also, please note that as announced in Budget 2016, in line with Government’s direction for more cost effective delivery of public services and the Smart Nation vision to harness technology to enhance productivity, e-Filing of Corporate Income Tax returns (including ECI, Form C and Form C-S) will be made compulsory in a phased approach from YAs 2018 to 2020. The phased implementation will provide more time for smaller companies to modify their processes and ease into e-Filing.
Ways To Submit ECI
There are two ways to submit your ECI, either e-File via mytax.iras.gov.sg or by paper file. The completed ECI Form can be submitted to IRAS by post.
Companies that e-File their ECI enjoy instant acknowledgement upon successful e-Filing and a greater number of installments to pay your company’s estimated tax. When calculating the ECVI, companies need not factor in the Tax Exemption Scheme for New Start-Up Companies/ Partial Tax exemption and the YAs 2018 and 2019 Corporate Income Tax (CIT) rebate when filing their ECI. IRAS will compute these and allow the New Start-Up Companies/ Partial Tax exemption and CIT rebate automatically. After IRAS has processed the ECI form, your company will receive a Notice of Assessment (NOA), which is an official Notice that states the amount of tax to be paid. The tax must be paid within one month from the date of the NOA, unless you are paying via installment (GIRO).