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. It is your Singapore accounting and bookkeeping services provider who is in charge of ECI.

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

Why do I need to file ECI?

ECI filing is mandatory. The process helps the IRAS conduct an early evaluation of corporate performance. Moreover, this information is of use to the Singaporean government as they can keep an eye on business health and make sure the company is being taxed fairly.

How to file my ECI

Our advice is to start the process of e-filing as early as possible.

First, you go to my Tax Portal

Next, you need:

  • Your company’s authorisation and approval
  • Your company’s Tax Reference Number
  • Your CorpPass ID and password

Tip

It is possible to file for your ECI offline in a form of a hardcopy. However, IRAS tries to encourage e-filing and allows more installments to early e-filers, not to mention the fact that it’s a faster procedure.

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