Filing Estimated Chargeable Income (ECI) in Singapore: Detailed Guide

What is Estimated Chargeable Income (ECI) and Why Do You Need to File ECI?

Filing the Estimated Chargeable Income (ECI) is a mandatory annual requirement for most companies in Singapore under the Income Tax Act. The ECI is an estimate of a company’s taxable income, computed based on its revenue, allowable expenses, tax exemptions, and reliefs. It ensures companies stay compliant with the IRAS regulations and facilitates timely tax payments.

How Do You Calculate ECI?

The ECI amount filed should exclude:

1. Tax exemption for new startup companies, and
2. Partial tax exemption, as IRAS will calculate and automatically apply these tax exemptions.

If your company qualifies for the Tax Exemption Scheme for New Start-Up Companies, this must be indicated in the File ECI digital service during the filing process.

Key Tax Updates for YA 2024

As announced in Budget 2024, a Corporate Income Tax (CIT) Rebate will apply for YA 2024, providing the following benefits:

• 50% rebate on corporate tax payable, capped at S$40,000 per company.
• CIT Rebate Cash Grant, which forms part of the maximum S$40,000 total benefit.

Important Note:

Assessments based on ECI will not include the CIT Rebate, as the rebate will be automatically computed in the tax assessment after submission of Form C-S, Form C-S (Lite), or Form C.

Who Must File ECI?

All companies are required to file ECI within 3 months after the end of their financial year, except for those meeting the following conditions:

1. Annual revenue does not exceed $5 million.
2. No taxable income is generated for the financial year.

If your company does not meet both criteria, ECI filing is mandatory, even if no tax is payable.

Step-by-Step Guide to Filing ECI in Singapore

1. Login to the IRAS myTax Portal
   • Visit the IRAS myTax Portal and select Corporate Tax > File ECI from the menu.
   • Ensure you have the necessary preparer or approver access.
2. Verify Company Details
   • Confirm and update your company’s functional currency and contact information.
   • Save changes to proceed to the main filing form.
3. Enter Revenue and ECI Amounts
   • Enter the company’s revenue and Estimated Chargeable Income (rounded to the nearest dollar).
   • Select the appropriate Year of Assessment (YA).
   • If the ECI is zero, input “0” beside the standard tax rate of 17%.
4. Review and Submit
   • Review the details in the Confirmation Page.
   • Save a copy of the form as PDF for your records.
   • Submit the filing directly to IRAS (if you are the approver) or route it to the approver for approval.
5. Acknowledgement and Records
   • Upon successful submission, an Acknowledgement Number will be generated.
   • Both the Confirmation Page and Acknowledgement Page can be retrieved via the IRAS myTax Portal.

ECI Filing Deadlines

Companies must file ECI within 3 months after the end of their financial year. For example:

• Financial Year End: 31 December 2024
• ECI Filing Deadline: 31 March 2025

Common ECI Filing Errors to Avoid

• Missing Deadlines: Late filing may result in penalties or enforcement actions.
• Inaccurate Reporting: Ensure revenue and expenses are accurately reported to avoid fines or disputes.
• Overlooking Deductions: Leverage all allowable deductions, exemptions, and reliefs to optimize tax savings.

What Happens After Filing ECI?

Once ECI is filed, IRAS will issue a Notice of Assessment (NOA) based on the submitted figures. Companies can benefit from tax installment plans offered by IRAS, which help manage cash flow effectively.

Why Work With Apexia?

At Apexia Corporate Advisory, we simplify the ECI filing process for businesses of all sizes. Our tax specialists ensure:

• Accurate computation of your Estimated Chargeable Income.
• Compliance with IRAS requirements.
• Timely filing to avoid penalties.

Additionally, we keep you informed of the latest tax changes, including those announced in the annual Singapore Budget.

Frequently Asked Questions (FAQs)

Q: Can I amend my ECI filing after submission?

Yes, you may amend your ECI before IRAS issues the Notice of Assessment. Contact us for assistance.

Q: What are the benefits of filing ECI early?

Filing early allows your company to take advantage of IRAS’ tax installment plans, improving cash flow management.

Contact Apexia Today

Need help with filing ECI in Singapore? Our team is here to provide expert advice and solutions tailored to your company’s needs.