After you’ve successfully registered your company in Singapore, that’s not all. A thriving business has to stay compliant, since there are penalties for not filing essential documents on time. Just to be aware of the costs of missing out on these deadlines, we’ve compiled a list of penalties that you have to pay if you miss submitting any of the information or documents to ACRA or IRAS as a company in Singapore.
Missing Annual Returns
Every year, you are required to file an annual return (AR), an electronic form lodged with the Accounting and Corporate Regulatory Authority (ACRA).
What is an Annual Return?
Glad you asked. This document details your company's important information, including the name of your directors, secretary, members, as well as the date to which your company's financial statements are made up to. This document provides vital information crucial to your company's stakeholders and helps them make informed decisions.
What’s the Penalty for not Submitting the Annual Return?
Under the Companies Act (CA) Section 197, businesses are mandated to file their ARs. Those who file their AR late will be penalised with a $300 late filing penalty. With effect from 30 April 2021, the revised penalty framework will be introduced, as the following:
- $300 for late lodgment filed within 3 months after filing due date; or
- $600 for late lodgment filed more than 3 months after filing due date.
When to file?
It first depends on the Financial Year, with the following guidelines:
- For companies with the financial year ending before 31 August 2018, the annual return must be filed with the Registrar within 30 days after the AGM is held.
- For companies with the financial year ending on or after 31 August 2018, the AR must be filed with the Registrar within 7 months after the financial year end, provided that the Annual General Meeting (AGM) has been held, or after financial statements are sent out (if the company needs not to hold an AGM).
How to file?
Step 1: Head over to BizFile+
Step 2: Go to “File eServices”, and select “Local Company”
Step 3: Go to "Annual Filing", and select "Annual Return by Local Company (For FYE from 31 August 2018)"
Missing the Annual General Meeting (AGM)
An annual general meeting (AGM) is a platform for your business to present your financial statements to your shareholders. They can then ask you questions about your company's health. The AGM is an important meeting for your stakeholders to address their concerns. An AGM is compulsory for all companies in Singapore.
What’s the Penalty for Missing the AGM?
Directors who fail to abide by the AGM requirements can be prosecuted in the state courts. Resulting consequences can include debarment from being a director or disqualification. Additionally, ACRA might enforce composition fines on businesses that do not hold the AGMs.
|Requirements||Breach||Type of penalty||Penalty|
|Section 175||The AGM was held late||Composition||A minimum composition sum of $500|
|Section 197||The AR was lodged late||Composition||A minimum composition sum of $500|
If your company and/or directors do not pay up the penalty (also referred to as offering the composition offer), or when ACRA decides not to offer composition for these breaches, ACRA may prosecute your company and/or directors that breach statutory obligation in court.
When to Hold the AGM?
It first depends on the Financial Year, as the following:-
- For companies with financial year ending before 31 August 2018, you are mandated to hold your company’s first AGM within 18 months after your incorporation. The subsequent AGMs will have to be held every calendar year, with an interval of no more than 15 months from the last AGM. Your AGM cannot happen more than 15 months after the last AGM.
- For companies with financial year ending on or after 31 August 2018, it is compulsory for you to hold your company’s AGM within 6 months after the financial year-end.
If you need more time to hold your AGM, you will have to seek the Registrar’s approval.
How to Apply for Extension?
You can apply for an Extension of Time of up to 60 days, if you need to delay holding the AGM or filing the annual return. You must make the application before your AGM/annual return deadline.
Your company officer (e.g. company secretary or director), or a professional firm like us, can apply on your behalf. The application fee is $200.
Follow the steps below to apply:
Step 1: Go to BizFile+
Step 2: Under File eServices, select Local Company
Step 3: Under Annual Filing, select Extension of Time for AGM/Annual Return
Step 4: Tell them why you need to delay your AGM. Supporting documents would be great.
Step 5: Verify that the transaction is complete. A confirmation email will be sent to the person making the application.
How long will it take?
Processing might take up to 14 working day or a little longer, if ACRA needs to clarify more things with you. We advise you to make your application and payment more than 14 days in advance, for peace of mind.
Missing Corporate Tax Filing
A Full Guide to ECI for Newbies
The lowdown to figure out if you need to file ECI and how to calculate it.
Estimated Chargeable Income (ECI) filing
It is compulsory to file your ECI within 3 months after the FYE, unless your company meets the ECI exemptions.
You need to meet BOTH conditions to enjoy the ECI exemption, i.e.:
Revenue is S$5m or less, AND
ECI is NIL.
Should you fail to file the required ECI, IRAS may issue an estimated NOA if the tax liability is significant. The estimated tax may be based on your company’s past years’ income or information made available to IRAS.
File Corporate Tax Late or Failing to File
The filing deadline is 30 Nov for the preceding financial year.
IRAS might take following actions for late or non-filing of tax returns:
- Issue an estimated Notice of Assessment (NOA). The company must pay the estimated tax within one month
- Offer to compound the offence with a composition amount not exceeding $1,000
- Issue a Section 65B(3) notice to the director to submit the required information in the Form C-S/ Form C to IRAS
- Summon the company or person responsible for running the company (including the directors) to Court.
What are the Penalties for filing ECI and Corporate Tax Return late?
Having trouble paying back?
For this COVID-19 period, IRAS is supporting businesses with longer instalments plan to pay corporate tax.
For both ECI and tax return, once Notice of Assessment (NOA) is issued, you have 1 month from the date of NOA to pay tax. Otherwise, a late payment penalty of 5% will be imposed and an additional penalty of 1% per month up to 12 months.
In case, if there is a need to file an objection, you are still required to settle outstanding tax liability before the due date.
If payment is under the GIRO payment plan, your GIRO plan might be cancelled or terminated if there is insufficient funds in the appointed bank account. A late payment penalty will be imposed if overdue tax is not paid.
IRAS might also take further actions, such as appointing an agent like a bank or lawyer to pay the outstanding tax to IRAS. In the worst case scenario, IRAS might take legal action against a company.
Late to Submit Goods & Services Tax (GST) Returns
Goods and Services Tax or GST is a consumption tax levied on the import of goods (collected by Singapore Customs), and nearly all the supplies of goods and services in Singapore. In other countries, GST is known as the Value-Added Tax or VAT. As a business, you must register for GST when your taxable turnover exceeds $1million. Even if your business does not exceed $1 million in taxable turnover, you may still choose to voluntarily register for GST after careful consideration. In Singapore, GST-registered companies would declare how they have computed their GST through filing their GST returns regularly throughout the year.
What are the penalties for filing GST Returns late?
As of 1 April 2018, late submissions of GST return will be imposed a $200 penalty immediately. An additional $200 will be imposed for every full month that the GST F5/F8 return is pending, until the maximum penalty of $10,000.
Even after you pay the late submission penalty, you are still required to file the overdue return, otherwise you may face prosecution.
Estimated Notice of Assessment (NOA)
If you fail to file the required GST returns, IRAS may send you an estimated Notice of Assessment (NOA). When you receive it, you are required to:
- Immediately file your GST return, declare the actual GST liability and get your estimated NOA revised.
- Make payment for the estimated tax inclusive of 5% penalty, before the due date on the late payment penalty notice
Submitting Unaudited Financial Statements in the Wrong Format
Under the Companies Act, you or your directors are accountable to present financial statements at your AGM that:
- Are in line with the Accounting Standards Council’s Accounting Standards
- Represent the company’s financial position and performance in a true and fair manner
You or your directors also have the responsibility to uphold a system of internal accounting controls, maintain proper accounting and other records that will allow the preparation of true and fair financial statements under the Companies Act. Filing of financial statements is part of a larger process of filing annual returns with ACRA to update ACRA on important particulars of the company. Therefore, the timeline for filing financial statements is similar to the timeline for filing annual returns.
What are the penalties?
If the financial statements do not comply with the SFRS or do not present a true and fair view of the company, the directors of the company will be guilty of an offence and may be fined up to $50,000.
Therefore, it is recommended that the personnel preparing financial statements should be officers with relevant experience (such as qualified accountants or company secretaries). If your company does not have these, feel free to talk to us on our chat!
When to submit
Usually within 6 months after FYE, in preparation of AGM & AR submission
Stay Compliant and On Top of Things
Can’t keep track of filing deadlines? Don’t worry, simply leave that to us! We advise what tax exemptions and tax reliefs your company is entitled to, and we organise your reports exactly the way it is needed. Our experienced corporate secretaries will help you to figure out how to stay compliant with the Singapore authorities while you focus on growing your business.