Do I Need to File My Singapore Corporate Income Tax Return if My Company Was Dormant for the Financial Year?

Understanding Dormant Companies

A dormant company in Singapore is defined differently by the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS). ACRA considers a company dormant if it has no accounting transactions during a financial year, except for specific administrative activities like paying filing fees or maintaining a registered office. The company must not be a listed company, have assets not exceeding S$500,000, and not be a subsidiary of a listed company.

IRAS, on the other hand, defines a dormant company as one that has not conducted any business activities or earned income for over 12 months. This means that even if the company has processed some expense payments, it can still be considered dormant as long as it has not generated any revenue.

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Tax Obligations for Dormant Companies

Despite being inactive, dormant companies have the same tax obligations as active companies. They must file their Estimated Chargeable Income (ECI) within three months after the financial year end and their Corporate Income Tax Return using Form C, Form C-S, or Form C-S (Lite) by November 30th every year of assessment.

Here are the steps to follow:

1. Determine Your Company’s Status: Check if your company meets IRAS’s definition of a dormant company. If it did not carry on business and had no income for the whole financial year 2024, it is considered dormant for YA 2025.
2. File Your ECI: Even if your company is dormant, you must file your ECI within three months after the financial year end. This is a declaration of your company’s estimated taxable income.
3. File Your Corporate Income Tax Return: Use the File Form C-S/C for Dormant Company digital service at mytax.iras.gov.sg to submit your tax return by November 30th. Even if your company has no income, you must still file a nil tax return to remain compliant.

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Waivers and Exemptions

Dormant companies meeting certain conditions can seek relief from submitting a corporate income tax return through waivers. If a waiver is not granted, they must file income tax returns, even without income, to remain compliant with IRAS regulations and avoid penalties.

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Conclusion

In summary, even if your company was dormant for the financial year 2024, you must still file your Corporate Income Tax Return for YA 2025. Follow these steps to ensure compliance:

• Check Your Company’s Status: Ensure your company meets IRAS’s definition of a dormant company.
• File Your ECI: Submit your ECI within three months after the financial year end.
• File Your Corporate Income Tax Return: Use the appropriate form and submit it by November 30th.

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If you need help with any of these steps, or determining if your company is dormant under ACRA or IRAS, do reach out to us at Harvest Accounting.