ECI
Estimated Chargeable Income (ECI) — the income of a company after deducting tax-allowable expenses. ECI is a necessary piece of data a company submits to IRAS within 3 months from the end of their financial year. It is then compared to the chargeable income stated in Form C-S/ C and either the excess tax is refunded, or you must pay the remaining tax within 1 month.
How to calculate ECI: Step 1 | Net profit before tax example
| Line | S$ |
|---|---|
| Sales | S$ 100,000 |
| Less: Cost of goods sold | S$(40,000) |
| Rental Income | S$ 2,000 |
| Gross Profit | S$ 60,000 |
| Advertisement | S$(10,000) |
| Depreciation | S$(500) |
| Directors’ fees | S$(12,000) |
| Printing and Stationery | S$(100) |
| Property Tax (rental property) | S$(400) |
| Salaries | S$(26,000) |
| Secretarial Fees | S$(300) |
| Water & Electricity | S$(1,000) |
| Net Profit before Tax | S$ 11,700 |
How to calculate ECI: Step 2 | ECI example
Let's assume your company bought S$500 worth of desks for the office and a S$1,500 laptop.
| Line | S$ |
|---|---|
| Net Profit before Tax | S$ 11,700 |
| Rental Income | S$(2,000) |
| Depreciation | S$ 500 |
| Property Tax (rental property) | S$ 400 |
| Adjusted profit before Capital Allowances | S$ 10,600 |
| 100% Write-Off for Low-Value Asset - desks | S$(500) |
| 100% Write-Off in One Year for Laptop | S$(1,500) |
| Adjusted profit after Capital Allowances | S$ 8,600 |
| Rental income (net of Property Tax for rental income) | S$ 1,600 |
| Estimated Chargeable Income (before exempt amount) | S$ 10,200 |
