6 Reasons Companies Should Use Corporate Tax Services

  • Post category:Blog
  • Post comments:0 Comments
  • Reading time:9 min(s) read
  • Post author:
  • Post last modified:December 21, 2020

Singapore has a very attractive corporate tax rate at a flat rate of only 17%. It is one of the factors which makes the city-state one of the best places to operate a business. This tax rate can be further reduced with various government grants and incentives.

Even so, local authorities still encounter incidents of tax evasion or late payment. Sometimes the delay of tax submissions is caused by the corporate tax filing exercise which can often be a time-consuming and complicated process.

Part of tax compliance involves proper documentation and timely submission in order for businesses to enjoy the benefits of tax incentives that are applicable to them. The bigger a company is, and the better the business is, the more tax-related documentation needs to be done.

Documentation can be a time-consuming task or a monumental challenge for companies that are resource-strapped or time-strapped. That is why it makes sense to outsource this task to a corporate tax service provider.

Reason #1: Tax penalties and cross-border implications

Professionals at a corporate service provider can lighten the load of businesses by helping them avoid tax penalties. Multinational corporations, in particular, also have to take into account Country-by-Country Reporting (CbCR) which can have huge outcomes in terms of tax costs or savings.

Late Payment Penalty

A company has one month from the date of the Notice of Assessment (NOA) to pay the assessed tax. The payment must reach the Inland Revenue Authority of Singapore (IRAS) before the due date even if the company has filed an objection and is awaiting the outcome.

If IRAS does not receive the payment before the due date, a 5% late payment penalty will be imposed. Any tax that remains unpaid for 60 days after this will be imposed an additional penalty of 1% per month up to a maximum of 12% of the unpaid tax.

However, if the assessment is subsequently revised after an appeal, any excess payment will be refunded to the company.

Further Enforcement for Non-Payment

If the tax continues to remain unpaid, further actions for IRAS to recover the taxes may include:  

  • Appointing agents like the company’s bank, tenant or lawyer to pay the money to IRAS; and/or
  • Taking legal action.

The additional 1% penalty on the overdue tax for each completed month remains in force concurrently with these enforcement actions. At this point, affected firms will experience a great inconvenience to their business. In some cases, they may not be able to access their bank accounts until the full payment for tax has been received.

Implications for MNCs

The Country-by-Country Reporting (CbCR), a part of the BEPS (base erosion and profit shifting) Project, requires multinational companies to prepare a report setting out key data for all countries in which they operate, such as revenue, pretax profits, taxes paid and employee numbers.

This report will then be distributed to tax authorities in all the countries in which the MNC operates. The CbCR has major implications for Singapore firms that have ventured abroad. They would need to do more tax planning.

Questions such as this will need to be addressed: did the company earn more revenue in China and did they hire more employees there, yet paid most of its taxes in another country?

MNCs can benefit from some assistance to avoid defaulting on tax by not paying enough or to avoid being doubly taxed on the same pot of income.

Reason #2: Expedites data collection

During the financial year end, in-house accounting and finance staff have a limited amount of time to collate all the documentation and prepare reports for annual returns and tax submissions. On top of that, they must compile all financial data for the year and plan budgets for the next year.

As IRAS deadlines do not budge for anyone, they may not have enough time to collect all the data that is necessary to cover all bases and enable maximum Singapore tax savings. Their first priority is to compile the essentials before closing the books. 

As such, outsourcing tax preparation to an external party can free up in-house finance departments to find the data necessary for paperwork submissions. The external party can do the hard work of data compilation, organisation and sorting throughout the financial year.

In addition to that, it can offer advisory services on how the firm can achieve tax savings by highlighting any necessary schemes that are available.

Reason #3: Ensures tax compliance

Singapore’s tax laws are constantly updated to meet industry trends and national objectives. Within a single year up to eight tax adjustments can occur.

Keeping up with and staying abreast of these tax legislation can be challenging for in-house accounting and finance staff, who have to stay on top of other financial duties and obligations.

Given their specific specialisation in tax services, corporate service providers can be relied on for updated knowledge about corporate tax adjustments. These firms have clients in similar and other industries. Thus, they would also have expertise on how new tax directives impact clients from different industries and advise accordingly.

Reason #4: Protect tax data

Data security has become even more pertinent with an increasing amount of data and work being switched to digital formats. To cite an example, 1.5 million patients’ personal information were leaked in the SingHealth hack in July 2018.

Since corporate tax returns must be filed correctly, financial data security is essential. Breaches may occur if a business entity does not have good protection systems in place.

This is predominantly so for smaller entities which may not have the financial capacity to invest a lot in security. In-house accountants who have access to data on the move to meet tight deadlines might unintentionally expose sensitive data when using unsecured networks (such as public WiFi connections). 

A corporate service provider that deals with large amounts of tax and financial data usually invests in enterprise-level data security and protection systems to ensure that client data is secure. It is obligated to update its clients on the latest data privacy and security issues.

Reason #5: Data accuracy

Accuracy and attention to detail are critical in corporate tax filing. Such thoroughness may not be achievable for smaller firms that have a very small accounting team or that have only one accountant to juggle bookkeeping with other financial tasks.

However, accuracy is a requirement among corporate service providers. It is their bread and butter. They would also possess in-depth knowledge of tax laws thus help to avoid tax omissions, and legal consequences and penalties.

Reason #6: Focus on core business

With the work and worries of all things tax related delegated to a trustworthy corporate service provider, a company can focus on its core activities. Singapore is an especially competitive market, where industry players strive to not only excel locally but also expand regionally. Outsourcing corporate tax filing can provide more time to be used on providing higher-value activities.

Who should use corporate tax services

Companies of any size can benefit from outsourcing their tax work, especially if they do not have a large enough accounts department to juggle the day-to-day commitments concurrently with the year-end rush towards tax submissions.

Both multinational or local corporations with business activities and branches in other countries will also gain time savings, and even cost savings, as the tax professionals at corporate service providers are dedicated to helping clients gain the most tax savings possible.

Tax incentives

Here are the six main grants and incentives given by the Singapore government that companies can avail of:

1. Productivity Solutions Grant (PSG)

The PSG came into effect on 1 April 2018, established to encourage the adoption of digital productivity solutions among Singapore firms. It funds up to 70% of the costs for qualifying activities under the following sectors:

  • Retail
  • Food
  • Logistics 
  • Wholesale
  • Landscaping
  • Construction
  • Precision Engineering

The grant supports the use of solutions in the areas of customer management, data analytics, financial management, inventory tracking, equipment and solutions.

The PSG supports smaller Singapore businesses and SMEs by making funding and supports more readily available to them. In the process, it helps them scale up beyond Singapore’s borders.

2. Enterprise Development Grant (EDG)

It aims to support Singapore businesses in three key areas:

  • Innovation and productivity
  • Core functions and capability
  • Market and business development

It focuses on helping larger businesses that are looking to expand within and beyond Singapore’s shores. Qualified Singapore-based SMEs enjoy up to 70% of funding support while non-SME Singapore businesses get up to 50% of funding support.


The new PACT scheme takes the level of collaboration further by supporting collaborations between Singapore businesses of all sizes. This encourages small and medium-size companies to partner up to foster business innovation and growth.

4. Double Tax Deduction for Internationalisation (DTDi)

The DTDi initiative was established to spur Singapore businesses on to international expansion and internationalisation. Singapore businesses carrying out select overseas business activities are entitled to a 200% tax deduction up to S$150,000 on expenses for these activities.

These activities include, but are not limited, to the following:

  • Overseas trade fairs
  • Market surveys and feasibility studies
  • Overseas business development trips
  • Investment feasibility and due diligence studies
  • Overseas advertising or promotional campaigns
  • Expenses of Singaporean staff posted to overseas entities

Such internationalisation activities can be very costly for small businesses which are often lean in operations.

5. Resilience Budget 2020 – Stabilisation and Support Package

Released on the 26th of March in 2020, the Package was to address the impact of Covid-19 on the Singapore economy and population. It was created to help employers address cash flow issues while retaining their employees, and allow the employees to defer income tax payments. 

Summarized below are the main measures relevant to businesses:

  • Deferment of Income Tax Payments for Companies and Self-Employed Persons
  • Enhanced Property Tax Rebate for Non-Residential Properties
  • Providing Sector-Specific Support
  • Enhanced Financing Support
  • Enhanced Wage Credit Scheme
  • Enhanced Jobs Support Scheme

Wrap up

Corporate tax services offered by external parties can alleviate a large burden from small businesses to multinational corporations. The service sometimes includes GST computation and submission of monthly GST to IRAS – both of which can be very time-consuming activities.

As all things related to tax is a core business activity for corporate service providers, they are able to focus on this area of work and provide any updates on tax law changes as well as notify their clients of any relevant or matching tax incentives.

Disclaimer: The information contained in this blog is for general information purposes only and is not intended as legal advice. While we endeavour to provide information that is as up-to-date as possible, Intime Accounting makes no warranties or representations of any kind, express or implied about the completeness, accuracy, reliability, suitability or availability with respect to the content on the blog for any purpose. Readers are encouraged to obtain formal, independent advice before making any decisions.

Leave a Reply

Corporate Tax Services in Singapore

Corporate Tax Services in Singapore

Corporate Tax Services Offered By InTime

Our Singapore Taxation Services Include:-

Corporate Tax Services
Preparation of tax computation and filing of corporate and individual income tax returns with IRAS
Preparation of draft tax computation based on management accounts for purpose of filing the Estimated Chargeable Income
Advisory on Withholding tax matters and e-filing of Withholding tax form
Filing objection to IRAS tax assessment
Assisting with IRAS queries on tax issues
Corporate tax advisory and planning
Applying for GST registration/deregistration
Preparation of GST computation and submission of monthly/quarterly GST to IRAS
Negotiation with tax authorities on tax incentives
Resolving taxation disputes

Outsourced Corporate Tax Services In Singapore

Given the potential government incentives and ever-increasing complexity of tax regulations, finding the right corporate tax services consultant in Singapore to guide you through is essential.

The current GST rate in Singapore is 7%. Singapore has adopted a one-tier corporate tax system. Under this system, tax paid by the company is not imputed to the shareholders and dividends are not taxable in the hands of the shareholders. This means that tax on corporate profits is only paid at the company level. Additionally, there is no inheritance tax and capital gains tax in Singapore.

At Intime, we understand our client’s business in order to make effective tax planning and advise our client on the tax implications of a proposed transaction without compromising integrity and compliance.

At Intime Accounting, our taxation specialists are experts at taxation planning strategies that are carefully tailored to meet your organization’s needs. They work hand in glove with your company to reduce the existing tax liabilities while following the legal and statutory requirements.

FAQ on Corporate tax

Companies operating in Singapore fall under the purview of IRAS, ACRA, and the Companies Act. These authorities levy penalties for late filing and non-filing of corporate tax.

If your business is convicted, it can face a fine of up to SGD1,000. In addition, every company director failing to comply with Section 65B(3) is liable to pay up to SGD10,000 or serve an imprisonment term of up to a year or both.

Even after serving the term or clearing the penalty, the company has to file the requisite documents. If it fails, the authorities can also prosecute the company’s directors and take other steps necessary.

Singapore charges income tax based on the ECI (estimated chargeable income) of the company. So a corporate assessee has to calculate their ECI and file it with IRAS within three months of the end of the financial year to which it belongs. You can then pay corporate tax.

Earlier, companies could submit their ECI offline, but starting from YA 2020, they will have to e-File it mandatorily. At Intime Accounting, we handle all of it on our client’s behalf.

ECI or estimated chargeable income is the gross taxable income of a company for a given YA (year of assessment). If filed within the due date, it allows the companies to pay their tax dues in installments instead of on a lump sum basis. The tax authorities allow a higher number of installments if you file your ECI earlier.

Singapore charges a flat 17% income tax rate on the corporate assessee. However, if your company’s annual profit does not exceed SGD200,000, it is eligible for exemption that would effectively bring the rates down to below 7%, subject to certain conditions.

In Singapore, there are two corporate income tax return forms – Form C-S and Form C. These are the ways through which the companies declare their annual income to the requisite authorities. So it is their duty to ensure that the form they submit must correctly showcase their income/loss for the year.

As per the Companies Act, companies that make a loss in a financial year must also file Form C-S/ Form C depending on the applicability.

As per the Singapore Companies Act, companies that meet the following criteria are mandated to have their accounts audited:
  • It has corporate shareholders
  • Its annual revenue exceeds SGD 10 million
  • Its total number of shareholders exceeds 20
If the private limited company does not meet these criteria, it is not required to file audited accounts. The company can instead file unaudited financial statements.

Even though GST is entirely voluntary for every company, it is compulsory for any organization meeting any of the following criteria:

  • If its annual turnover exceeds SGD1 million at the end of the financial year
  • If it expects its annual turnover for the given year to exceed SGD1 million
  • If it is liable to register under the reverse charge mechanism
  • If it meets the criteria under the overseas vendor registration regime
The corporate assessee has to file their annual corporate income tax return within 30th November of the next financial year.

Unlike most other countries, Singapore exempts tax on capital gains made by the corporate assessee.

At Intime Accounting, we offer a plethora of corporate tax services to our clients. It includes applying for GST, preparing GST computation and periodic submission, preparing tax computation, and resolving tax disputes.
Contact Us Now!