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Compulsory e-filing starts this year for companies with revenue over S$10m: IRAS reminder

COMPULSORY e-filing of corporate income tax returns starts this year for companies with revenue of more than S$10 million in year of assessment (YA) 2017, the Inland Revenue Authority of Singapore (IRAS) reminded in a media statement on Wednesday.

The deadline for paper filing of corporate income tax returns is Nov 30, but companies doing so online have until Dec 15.

Implemented in phases, compulsory e-filing of tax returns will be extended next year to companies with more than S$1 million in revenue in YA 2018, and to all companies by 2020.

IRAS also reminded companies that they must set up their CorpPass account to e-file their tax returns at its myTax Portal. It said about 70 per cent of companies are CorpPass-ready. Those which are not are advised to set up their CorpPass accounts early in order to e-file their tax returns on time, said IRAS. The CorpPass account set-up guide is available on its website.

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To help companies file online, IRAS will be pre-filling certain information such as unutilised capital allowances, losses and donations.

IRAS also shared filing tips and common mistakes to avoid in its media statement.

For one thing, it highlighted that companies that qualified to file with Form C-S, a simplified version of the Form C tax return, do not need to submit their financial statements, tax computations and supporting schedules - but they should prepare these documents and submit them to IRAS upon request. 

It also noted that companies can claim benefits on qualifying research and development (R&D) expenditure. For YA 2018, these benefits include enhanced tax deductions of up to 400 per cent of the qualifying costs incurred, subject to a cap of S$400,000; or an option to convert up to S$100,000 of qualifying R&D costs into a Productivity and Innovation Credit (PIC) cash payout at prescribed rates.

In 2017, about 670 companies claimed enhanced R&D benefits, with small and medium enterprises (SMEs) accounting for 88 per cent of R&D claims. Based on the claims processed, 79 per cent of SME claims were granted full R&D benefits, with another 6 per cent of claims adjusted by IRAS on the approved expenditure.

On mistakes to avoid, IRAS highlighted wrongful claims of non-deductible expenses. It gave as example interest expenses attributable to non-income producing assets or investments that produce exempt dividends, such as Singapore one-tier dividends, which are not tax deductible. Provisions are also generally not tax-deductible, said IRAS.

IRAS also noted that companies must maintain proper records and keep the source documents - accounting records and bank statements that are connected to the business - for five years, even after the company has received its notice of assessment for the year. Failure to do so may result in expenses claimed being disallowed and/or penalties imposed, said IRAS.