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ECI (Estimated Chargeable Income)

Estimated-Chargeable-Income

It is compulsory for all companies to file Singapore estimated chargeable income (ECI) statements to the IRAS. Even if the company predicts a zero chargeable income, it still has to file a statement that says ‘nil’ ECI. Our team of experts will be more than happy to help you with all the information related to Singapore ECI.

ECI stands for Estimated Chargeable Income, is an estimation of an organization’s chargeable income for a given year of Assessment (YA). According to Singapore’s regulation, it is compulsory for all companies to file ECI statement with IRAS (Inland Revenue Authority of Singapore) for the preceding year of assessment within 3 months after the financial year ends. The companies with no chargeable income (zero income) should file ‘Zero’ or ‘Nil’ ECI with IRAS unless the company qualifies for the administrative concession (which came into effect from YA 2013).

The ECI statement must include the revenue (the main source of income) of company excluding item such gain on disposal of fixed asset. For instance, if you own an investment holding company, your revenue will be your investment income.

In the event of unavailability of audited accounts at the time of ECI filing, you can refer to the management accounts of your company in order to declare the revenue amount. When the audited account come into effect and if found any difference from that declared amount in the ECI form, there will be no change in your ECI, you are not required to revise the figure of revenue.

Who need to file Estimated Chargeable Income (ECI)?

All Singapore incorporated companies must file ECI with IRAS unless the company is exempted under administrative concession that came into effect from YA 2013. Even if the companies chargeable income is zero, it still has to file ‘NIL’ ECI.

As per new administrative concession, the companies with a financial year ending October 2012 or after are free from filing ECI if they meet following prerequisite conditions.

  • Company’s annual revenue is not more than $1 million for the financial year; and
  • ECI* is NIL.

*ECI is the amount before deducting the exempt amount under the tax exemption scheme for new start-up companies and the partial tax exemption scheme for other companies.

Advantage of Early ECI Filing

IRAS provides flexible payment options for the companies that file ECI early. They will be awarded with a number of installments options. The earlier you file, the more will be the number of installments. For instance, please refer to the below table:

ECI filed within e-filers (no. of Installments) Paper-filers (no. of Installments)
1 month from financial year-end 10 5
2 months from financial year-end 8 4
3 months from financial year-end 6 3
More than 3 months from financial year-end NA NA

Result of Non-compliance

If a company fails to submit its ECI to IRAS within 3 months of its financial year-end, the company will receive a Notice of Assessment (NOA) from IRAS based on their own estimate of the company’s revenue. In case the company disagrees with the estimation amount of IRAS, they have one month of time to lodge a written objection online via myTax portal or can send written application to the corporate division of IRAS. Otherwise, the amount stated in the NOA is declared as the final assessment.

Assistance of SingaporeTaxation.com.sg

Filing an error free and compliant ECI report can be an ardent task for you as long as you are not conversant with the process and compliance requirements. Thereby, it is advisable to take assistance of SingaporeTaxation.com.sg. The firm offers complete solutions pertaining to the ECI needs.

We provide below listed key functions under ECI services:

  • Guidance on Estimated Chargeable Income (ECI)
  • Preparation of ECI report and filing with IRAS
  • Help you to be compliant with the regulations of IRAS
  • Generate access code for filing ECI online

Please feel free to contact us on +65-6536 0036 or drop in an email at info@taxationservices.com.sg

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