Singapore Chargeable Income (Estimated)
MEANING OF ECI
Estimated Chargeable Income (ECI) is the estimated chargeable income of a Company for a Year of Assessment (YA). The IRAS requires that a Singapore Company must file the ECI within three months from the end of its financial year end. Effective YA 2013, a revamped concession is offered to companies that have a financial year (FY) ending on or after October 2012.
Your annual ECI should mention the revenue generated by your Company. Revenue refers to a Company’s main source of income, and excludes items like gain on disposal of fixed assets. For example, if you have an investment holding Company, the primary source of income comes from the investments.
In Singapore, the information about the revenue generated by businesses is an essential data involved in government policy-making. It is also used for continual evaluation of performance and growth of different industry sectors.
Where the audited accounts are not available, you can refer to the Company’s management accounts for the purpose of declaring the revenue amount. Should the revenue amount based on audited accounts be different from that declared in the ECI Form, and there is no change in your ECI, you are not required to revise the revenue figure.
Ideal Candidates for Filing the ECI
A Singapore Company will have to submit the ECI within three months after the financial year comes to a close. Even if your Company has an estimated income of Zero, the ECI must be filed as “Nil.”
Effective YA 2013, a new concession is offered to Companies that have their financial year end in October 2012 or later. According to this new regulation, if your Company’s annual turnover is less than SGD 1 million and your ECI comes to Zero, you are not required to file ECI for that year.
|FY-End||Accounting Period||YA||Last Date to File ECI for the YA|
|31 December||1st January 2013 to 31st December 2013||2014||31st March 2014|
|31 March||1st April 2013 to 31st March 2014||2015||30th June 2014|
BENEFITS OF FILING ECI IN ADVANCE
IRAS offers flexibility in terms of payment options if you want to file your ECI in advance. An early ECI filing means you can break down the tax and enjoy a greater number of instalments to pay your Company’s estimated tax. For example, if you e-file your Company’s ECI statements by the 26th of the month after the FY ends, you will be permitted to pay the taxes by 10 instalments.
Example: December year-end company
|e-file by||Number of instalments||Paper-file by||Number of instalments|
|26th January||10||24th January||5|
|26th February||8||24th February||4|
|26th March||6||24th March||3|
|After 26th March||No instalments||After 24th March||No instalments|
FAILURE TO FILE ECI
If a Company does not file the ECI statements within the 3-month period and comply with the requirement, the IRAS is going to send out a Notice of Assessment (NOA) based on an estimate of the Company’s revenue. This gives the Company a one-month period to submit an objection if it does not agree to the estimated income mentioned by the IRAS. If there is no respond from the Company, the NOA is considered to be final and true even if there are differences in the income declared in the Form C and the submitted accounts.