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singapore compliance
- Incorporation of Company under ACRA
- Finalize Office space- A Singapore Company must have a registered office address to which all communications and notices may be directed. This must be a physical location within Singapore and shall be open and accessible to the public for not less than three hours during ordinary business hours on each business day.
Companies which do not own or rent a physical property in Singapore may choose to use a service provider such as Acclime , which offers a registered office address and mail-forwarding services.
- Appoint company secretary
A company in Singapore must have at least one company secretary, who must be an individual ordinarily resident in Singapore. The role of the company secretary is to ensure that the company complies with reporting and regulatory requirements in Singapore. The company secretary role cannot be left vacant for more than six months at any given time.
A director can also serve as the company secretary as long as he/she is not the sole director of the company.
- Resident director: A Singapore company must have at least one director who is ordinarily resident in Singapore, meaning the person must be a citizen or permanent resident. In limited circumstances, a foreigner with a valid Employment Pass (EP) can act as the resident director as long as that EP is for employment with the company for which he/she is a director.
The director must also:
- Be at least 18 years of age
- Not be an undischarged bankrupt
- Not be presently disqualified from acting as a director by the Singapore authorities.
- Data protection and data protection officer
Under the Singapore Personal Data Protection Act (PDPA), each company is required to have a data protection policy and to appoint at least one data protection officer (DPO). The DPO does not need to be a resident in Singapore, and the function may be outsourced to a third party.
Organisations are required to ensure that at least one DPO’s business contact information is made available to the public (phone number or email address). The DPO whose business contact information is provided has to be reachable whenever a member of the people in Singapore attempts to contact him, to be compliant with the PDPA requirements.
- Annual Compliance: A Singapore company must file an annual return with ACRA via the Biz File+ portal, unless exempted. The annual return must be filed within seven months of the financial year-end of the company for a private company and within five months for a public company.
Exempt private companies (EPC) that do not have their annual financial statements audited can complete a simplified annual return which does not require the submission of financial statements. An EPC is a private company that has no more than 20 shareholders, none of which are a corporation.
For all other companies, the annual return must include the company’s financial statements, which need to be lodged in XBRL (extensible Business Reporting Language) format. XBRL is a standardised communication language in electronic form for financial statements. Generally, the company’s financial accountants or auditors will convert the financial statements to XBRL.
- Accounting requirements: When filing for incorporation with ACRA, a company must nominate a date for its financial year-end. The standard year-end in Singapore is 31 December, so many companies choose that date. However, other dates may be selected, for example, to align with the parent company’s balance date.
A company may choose to have the first financial year for the company greater than 12 months – up to a maximum period of 18 months. For example, a company incorporated in October could elect to have its first financial year-end on 31 December the following year, making the first accounting period 15 months. This saves the time and expense of preparing a set of financial statements for only three months (if the first-period end was to be 31 December in the year of incorporation).
- Appointment of auditor: The directors of a company must, within three months after the incorporation of the company, appoint an auditor of the company, unless exempt as a small company. The auditor is reappointed at every AGM of the company.
A small company is a private company that satisfies two of the three criteria below in the two immediately preceding financial years:
- The revenue of the company does not exceed S$10 million per fiscal year
- The company’s total assets do not exceed S$10 million in value at the end of each financial year
- The company does not have more than 50 employees at the end of each fiscal year
If the Singapore company is part of a corporate group (whether onshore or offshore), then the tests above are measured by reference to the group, rather than the company in Singapore. This can mean that a company with limited operations in Singapore may still need to be audited, by virtue of the operations in the rest of the group.
- Taxation
Corporate income tax return
All companies and branches of foreign companies must submit an annual income tax return. The deadlines for filing are:
- Eleven months after the end of the company’s financial year (if filing a paper return)
- The 15th day of the 12th month after the end of the company’s financial year (for online filing)
GST registration and quarterly returns
The Goods and Services Tax (GST) is a consumption tax levied on most goods and services supplied in Singapore.
A company is required to register for GST with the Inland Revenue Authority of Singapore (IRAS) if its annual taxable turnover exceeds SGD one million. Under certain circumstances, companies not reaching the turnover threshold may still register.
Once registered, the company is required to charge its customers GST. The company is expected to lodge a quarterly GST return, accounting to the government for the GST it has collected from its customers, less GST paid on inputs.
- Employment law: The Employment Act in Singapore sets out the rights and obligations of both employers and employees in Singapore and must be complied with in relation to all aspects of the company’s employees.
From an income tax perspective, although the company is not required to make any tax deductions from salaries paid to employees, it is obliged to provide to the IRAS a statement of earnings at the end of a calendar year in respect of each employee.
Where the company has Singapore citizens or Singapore permanent residents as employees, the employer is obliged to make contributions to the Central Provident Fund at the designated contribution rate for those employees.
UAE compliance
- Tax Compliance and Administration – UAE Corporate Tax Law: The UAE Corporate Tax Law (CT Law) introduces a federal corporate income tax regime for the first time in the UAE. The law applies to all businesses operating in the UAE, with a few exceptions. This blog post will provide an overview of the key tax compliance and administration requirements under the CT Law.
Key Tax Compliances Under the UAE Corporate Tax Law
The UAE CT Law outlines a range of tax compliance obligations for taxable entities, including:- Tax Registration: All taxable entities must register for CT with the Federal Tax Authority (FTA) within 30 days of becoming liable for Corporate Tax.
- Tax Return Filing: Taxable entities must file CT returns electronically with the FTA within the prescribed deadlines.
- Tax Payment: Taxable entities must pay their CT liability within the prescribed deadlines.
- Record Keeping: Taxable entities must maintain accurate and complete records for at least five years to support their CT returns.
Tax Administration under the UAE CT Law
The FTA is responsible for administering the UAE CT Law, including:- Issuing Tax Regulations and Rulings: The FTA has the authority to issue regulations and rulings to provide further guidance on the interpretation and application of the CT Law.
- Tax Audits: The FTA may conduct tax audits to verify the accuracy of CT returns and assess compliance with the CT Law.
- Tax Assessments: The FTA may issue tax assessments if it determines that a taxable entity has understated its CT liability.
- Tax Disputes: Taxable entities may appeal against tax assessments or penalties imposed by the FTA through the established dispute resolution process.
How to Prepare for Corporate Tax
To ensure your business adheres to the UAE Corporate Tax (CT) Law, it’s crucial to stay informed about the latest developments and comply with the established guidelines. Here’s a step-by-step guide to help you navigate the CT regime effectively- Review the Corporate Tax Law published by the Ministry of Finance to determine if your business meets the criteria to be subject to tax.
- Check the Ministry of Finance and Federal Tax Authority websites for guidance on the implementation date that taxes will apply to your particular industry or business activities.
- Understand the basic tax compliance requirements, like the accounting/tax period, deadlines for filing tax returns, and financial records that must be maintained. Both government websites provide this type of information.
- Maintain regular awareness of any updates or additional guidance from the tax authorities by periodically checking their websites. As corporate tax in UAE is newly implemented, details may continue to evolve over time.
- Keep thorough financial records according to best accounting practices, as these will be necessary both for basic business operations as well as future tax compliance needs.
Financial Statements
Financial statements are a key element of the CT Law, as a taxable person’s accounting income (profit or loss) as stated in the financial statements is used as the starting point for calculating taxable income. Taxable persons who earn revenue that does not exceed AED 3,000,000 in the tax period may use the cash basis of accounting. However, once a taxable person’s revenue exceeds AED 3,000,000 in the tax period, they must prepare financial statements using the accrual basis of accounting.Applications and Elections
Taxable persons will need to make elections or applications to benefit from certain provisions in the CT Law. Elections can be made unilaterally by taxable persons and do not require approval from the FTA. Some examples of elections include small business relief, exemption of foreign permanent establishment income, and the option to be subject to corporate tax at the general rate if they are a Qualifying Free Zone Person. Applications, on the other hand, require approval from the FTA. Some examples of provisions that require an application include the exemption from corporate tax for certain types of persons, the treatment of a group of companies as a single taxable person, and the formation of a tax group.Tax Returns and Payments
Taxable persons must file their corporate tax return and pay corporate tax within nine months from the end of the relevant tax period. Late filing or payment will result in penalties.Clarifications and Assessments
The CT Law provides mechanisms for taxable persons to obtain certainty on their tax position upfront through clarification requests and for the FTA to undertake assessments of a person’s corporate tax affairs under certain circumstances.General Anti-Abuse Rule
The CT Law includes a general anti-abuse rule to prevent the use of abusive transactions or arrangements to obtain a corporate tax advantage that is not consistent with the intention of the law.
