Your Step-by-Step Guide to Annual Return Filing

Annual return filing is a legal obligation for Singapore-incorporated companies to keep their information current with the Accounting and Corporate Regulatory Authority (ACRA), thereby ensuring stakeholders are informed about the company’s composition, business activity and financial health. The process involves several stages, from the preparation and submission of accounting and financial statements to holding the company's annual general meeting. It’s not just about ticking boxes; it’s about demonstrating your company’s commitment to transparency and good governance.

Failure to file your annual returns by the required date can lead to enforcement actions against your executive officers. Therefore, it’s crucial to understand the annual filing requirements and adhere to them. But don’t fret; we’re here to guide you through this journey, one step at a time.

Now that we’ve understood the roles of ACRA and IRAS let’s delve into the key components of an annual return. At its core, an annual return is about providing accurate, up-to-date information about your company to the relevant authorities. It requires the local or foreign company to file accounting and financial statements such as the balance sheet, income statement, and cash flow statement by a stipulated date. These financial statements offer an overview of the company’s financial status, providing insights into its profitability, liquidity, and financial stability.

In addition to financial statements, an annual return also includes your company’s shares details.

Your company's shares details will include the number of shares held, issued share capital, and the paid-up share capital. Let us briefly look at each of these terms:

• Number of shares held – The number of shares held refers to the total number of shares that each shareholder owns in a company.

• Issued share capital – This is the total value of shares that a company has issued (sold) to shareholders. It is calculated by multiplying the number of shares issued by their nominal (or par) value.

• Paid-up share capital – This refers to the portion of the issued share capital that has been fully paid for by the shareholders. If a company issues shares at a certain price and the shareholders pay this amount in full, those shares are considered "fully paid." In actual terms, paid-up share capital represents the actual funds received by the company from members in exchange for shares.

These financial particulars about your company (whether it's a local or a foreign company) are crucial in providing a complete picture of its financial health.

Another crucial component is the Management Discussion and Analysis (MD&A) of a business. This is a section of your annual report or quarterly filing where the management submits a narrative explanation of the accounting and financial statements to the company's stakeholders. It offers the management's perspective on the company's financial performance, condition, and particulars of future prospects.

Company details verification

One of the key components of an annual return is the verification of the company's information. This involves a company details confirm process, ensuring the accuracy of your company’s information with ACRA, such as business activities, registered office address, and share capital. The importance of this process cannot be overstated.

Having accurate and up-to-date company details on ACRA’s register is a legal requirement and it also helps the company's stakeholders make informed decisions about your company.

File financial statements

Another critical aspect of an annual return is to file financial statements in each calendar year. Your company's financial statements provide a comprehensive overview of your company’s financial standing and include financial information such as:

• Equity
• Assets
• Liabilities
• Financial performance
• Changes in cash flow

However, it’s important to note that certain exemptions, depending on the company type and your business activities, apply when you file financial statements.

For instance, companies with no more than 20 shareholders and no corporate shareholders may not be required to file financial statements.

So, by when is a business required to file its annual returns in any given calendar year?

The date your business is required to file the Annual Return is anytime within 7 months after the fiscal year-end (FYE) or within a month after the shareholders sign the resolution approving the company financial statements. It’s essential to adhere to these deadlines, as late lodgment of Annual Returns can lead to penalties being imposed by ACRA on your company.

Now, let’s turn our attention to the ‘how.’ Return filing requirements can be quite complex, especially for businesses that are filing for the first time. But don’t worry, we’ve broken down the particulars for you.

Timelines

The filing deadlines for the Annual Return depend on your company’s Financial Year End (FYE). Typically, you’re required to lodge the return within 7 months after the FYE for most companies. However, there are some exceptions, depending on the company type; listed companies must file their Annual Returns within 5 months after their FYE, while unlisted companies have 7 months. Having a clear understanding of these timelines is crucial to ensure timely filing and avoid penalties.

Online declaration/filing via BizFile

The annual filing process has been simplified with the introduction of BizFile+, an online declaration and filing system operated by ACRA. You can lodge this online declaration of your Annual Return electronically through BizFile+, including details such as director names, members and the financial statement date.

This makes the process more efficient and less time-consuming, allowing you to focus on other important aspects of your business.

Beyond annual returns and AGMs, there’s another crucial part of the compliance puzzle - tax filing. A business operating in Singapore is mandated to submit a corporate income tax return if its income exceeds $22,000 or if they have income derived from Singapore as non-residents. Each business in Singapore is required to annually submit Estimated Chargeable Income (ECI) and a formal income tax return using either Form C-S, Form C-S (Lite), or Form C to IRAS.

Knowing your tax filing obligations is crucial to ensuring smooth sailing in your annual returns filing journey.

Filing ECI

Filing Estimated Chargeable Income (ECI) is a critical part of your tax filing obligations. The date to file ECI in Singapore is within three months after the end of their financial year. However, a waiver for ECI filing is available for companies with an annual revenue of $5 million or below, provided they have a nil ECI for the Year of Assessment.

But remember, even if you qualify for a waiver, you’re still required to file a formal income tax return.

Corporate income tax return forms

Depending on the company type, there are different types of corporate income tax return forms, including Form C-S, Form C-S (Lite), and Form C. The form to be used depends on your company’s category.

For the 2024 Year of Assessment, companies are granted a Corporate Income Tax Rebate of 50%, capped at a maximum of $40,000. The computation of the tax rebate is done automatically by the tax authority, based on the corporate income tax return forms that your company submits.

With so many complexities involved in the process, it’s understandable to feel overwhelmed. But don’t worry, there’s help at hand. Hiring professional assistance, such as a registered filing agent or company secretary, can help streamline compliance for businesses and ensure accuracy in the return filing process.

Professional assistance not only simplifies the process but also helps you avoid the risk of penalties due to missing a filing date or non-compliance. Let’s take a closer look at how hiring professionals can benefit your business.

Benefits of hiring a registered filing agent

A registered filing agent provides a host of benefits, including:

• Streamlining compliance with Singapore’s business regulations
• Making the process of meeting statutory requirements more manageable\
• Allowing business owners to focus on other aspects of their company
• Providing transparent service rates that can potentially reduce costs

Most importantly, they can help ensure that companies adhere to compliance requirements, reducing the risk of missing a file date and incurring penalties.