ECI Filing
What does ECI mean?
ECI means Estimated Chargeable Income. It is an estimate of a company’s chargeable income for a Year of Assessment (YA). Part of annual corporate compliance requirements in Singapore is the filing of Estimated Chargeable Income [ECI] with the Inland Revenue Authority of Singapore (IRAS), the taxing authorities of Singapore. IRAS requires every company to submit an ECI for the Year of Assessment within three months after the financial year ends. A company with a zero income will file a ‘NIL’ ECI.
Understanding the Estimated Chargeable Income (ECI)
According to our tax consultation experts, IRAS defines Estimated Chargeable Income as the appraisement of a company’s chargeable income for Year of Assessment [YA], which is unique to every company. Included in the ECI statement is the company’s revenues, excluding items such as gain on disposal of fixed assets. Thus, should a company be an investment holding company, its principal source of income is the investment income.
Companies have been disclosing revenue data in your Income Tax Return (Form C). From 1 Jan 2009, companies will also be required to declare the revenue amount in the ECI Form. Information on the revenue of businesses is one of the key economic data used for policy-making, as well as for regular assessment of performance and development of industries and businesses. There is also an increasing need for more frequent and timely collation of comprehensive economic data in view of the rapid economic changes in recent years. Instead of imposing additional survey reporting on businesses, it is more efficient and cost-effective to collect such economic data through existing channels such as the ECI Form.
Where the audited accounts are not available, you can refer to the company’s management accounts for the purpose of declaring the revenue amount. Should the revenue amount based on audited accounts be different from that declared in the ECI Form, and there is no change in your ECI, you are not required to revise the revenue figure.
Who needs to file?
A company has to furnish Estimated Chargeable Income (ECI) within three months after the end of its financial year end, even if the company estimates its chargeable income as zero, it still has to file a “Nil” ECI return.
| Financial year-end | Due date for filing ECI | Period covered in the accounts | Year of Assessment (YA) | Due date for filing ECI for that particular YA |
|---|---|---|---|---|
| 31 Dec | 31 Mar of the following year | 1 Jan 2017 to 31 Dec 2017 | 2018 | 31 Mar 2018 |
| 31 Mar | 30 Jun of the following year | 1 Apr 2017 to 31 Mar 2018 | 2018 | 30 Jun 2018 |
Advantage of Filing ECI
IRAS provides flexible payment options for companies that submit early their ECI statements. They can pay their tax in installments. The earlier the ECI statement is submitted, the higher the number of payment installments are bestowed. Companies, e-filing their ECI by 26th of the month immediately after the financial year-end, for example, can pay their taxes in 10 installments. If the ECI is filed on the 26th of the second month after the financial year-end, there are 8 payment installments awarded to that company, and 6 for companies filing their ECI on the 26th of the third month.
Failure to comply with the filing of ECI
After the three-month grace period has elapsed and the company failed to comply with such requirement, IRAS shall issue a Notice of Assessment (NOA) based on its estimation of that particular company’s income. The company then has one month from the date of IRAS’ NOA to submit its written objection should it not agree with IRAS’ estimated assessment. Otherwise, the NOA is recognized as final and the same holds true despite differences on the information of revenues declared on it is Form C and the accounts submitted subsequently. Engaging our tax consultation experts will help you avoid this.