Accounting and corporate tax.What a small company pays, and to whom.

Bookkeeping and the year-end accounts

Every transaction recorded and the bank reconciled, monthly or quarterly depending on volume, then a set of unaudited financial statements at year end. A company with a few dozen transactions a month pays S$900 to 3,000 a year for bookkeeping, the accounts and the tax filings together. Self-serve platforms charge from about S$100 a month while the company is simple. Records must be kept for five years, and Xero is the ledger most providers work in.

• Financial statements follow Singapore Financial Reporting Standards; small companies use the simplified version
• A solvent exempt private company does not file its accounts with ACRA, only a declaration
• The financial statements feed the AGM, the annual return and the tax return

Corporate tax at 17%, and what a new company pays

The rate is 17% on chargeable income. For its first three years of assessment a new company with at least one individual shareholder holding 10% or more pays tax on 25% of its first S$100,000 of chargeable income and 50% of the next S$100,000. After that the partial exemption applies: 75% of the first S$10,000 and 50% of the next S$190,000 are exempt. There is no capital gains tax and dividends are paid without further tax in the shareholder's hands.

• S$100,000 of profit in year one is taxed at S$4,250, an effective 4.25%
• S$300,000 of profit in year one is taxed at S$38,250, about 12.75%
• Losses carry forward without a time limit if the shareholding stays broadly the same

The two filings

Estimated chargeable income is filed within three months of the financial year end, and is waived if revenue is S$5 million or under and the estimate is nil. The tax return, Form C-S for companies with revenue of S$5 million or under, is filed by 30 November of the year of assessment. The year of assessment is the calendar year after the financial year in which the profit was earned, so a December 2026 year end is filed by 30 November 2027 and the tax is paid after the assessment, usually in one sum or twelve instalments by GIRO.

Tax residence

A company is tax resident in Singapore if control and management are exercised here, which in practice means board decisions taken in Singapore. Residence matters for the start-up exemption, for treaty benefits with your home country, and for the certificate of residence banks and customers sometimes ask for. A company run entirely from abroad through a nominee director may be resident somewhere else, and that is a question for a tax adviser in that country before you incorporate.

The audit exemption

A company is exempt from audit if it meets two of three tests for the last two financial years: revenue of S$10 million or under, total assets of S$10 million or under, and 50 or fewer employees. A new company is assessed on its first year. Almost every company on this site is exempt. An audit costs S$3,000 to 8,000 for a small company, so a quote that includes one for a S$500,000 business deserves a question.

Choosing the financial year end

You pick it at incorporation and it decides when everything else is due. The start-up exemption runs for three years of assessment, so a first financial year of two months uses up a third of it on almost no profit. Set the first year end so the first period is close to twelve months, and pick a month when the business is quiet. December is common because it matches the parent; it also puts your accountant's busiest month at your year end.