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IRAS simplifies corporate tax filing process for SMEs

IRAS simplifies corporate tax filing process for SMEs

Source: Business Times
Article Date: 17 Nov 2020
Author: Leila Lai

Companies with straightforward tax matters can fill out as few as six essential fields in the simplified form.

Filing corporate taxes for 2020 will become easier for small and medium-sized enterprises (SMEs), with a new simplified Corporate Income Tax (CIT) Return form and more digital solutions being implemented this year.

The Inland Revenue Authority of Singapore (Iras) launched the simplified version of the standard CIT Return Form C-S, called Form C-S (Lite), in July. The Form C-S (Lite) makes it possible for companies with straightforward tax matters to file taxes by filling out as few as six essential fields, including revenue and net profit or loss.

Companies that fulfil the current criteria to e-file Form C-S and have an annual revenue of S$200,000 or less will be eligible to use Form C-S (Lite). About 60,000 SMEs are expected to benefit from this simplified form for the Year of Assessment (YA) 2020.

As with the Form C-S, companies filing Form C-S (Lite) are not required to submit their financial statements and tax computations, but should have the documents ready in case Iras requests for them.

Iras is also digitalising more of its processes this year to enhance the taxpaying experience for companies.

Companies can now choose to pay their corporate taxes via PayNow QR, which will provide instant settlement and real-time updates of their outstanding tax balance.

PayNow Corporate will be available from mid-2021 as an option to receive CIT refunds within seven days from the credit arising.

Companies will need to link their Unique Entity Number to their corporate bank account via Internet banking to use this refund method.

Companies can also automate the preparation and filing of their statutory returns using dedicated accounting software linked to systems of Iras and the Accounting and Corporate Regulatory Authority (Acra).

Iras and Acra announced in August that they have partnered with five software developers to incorporate statutory filing requirements into accounting software, so companies can automate their tax computations and file CIT Returns directly to Iras, and Annual Returns for Financial Statements directly to Acra without logging into the BizFile+ and myTax Portals separately.

This solution is expected to benefit 200,000 SMEs with annual revenue of S$5 million and below; they stand to make time savings more than 90 per cent and minimise reporting errors.

The software that currently offer it are Netiquette O2O Business Suite and SME Cloud Exchange Network. The solution will be made available progressively in AutoCount Accounting, Deskera ERP and Realtimme Cloud Solutions.

Companies can tap support schemes such as the Productivity Solutions Grant administered by Enterprise Singapore, and the Start Digital Pack and Digital Resilience Bonus, both administered by the Infocomm Media Development Authority, to fund their adoption of the enhanced accounting software.

Iras will digitise most of its notices from May 2021 and phase out paper notices. Companies will need to update their e-mail address to receive e-notifications from Iras.

They can do so via the e-service "Update Notice Preferences" in myTax Portal from January; they can also use the same e-service to indicate their preference for paper notices.

From this year, however, e-filing is compulsory. Paper filing will no longer be accepted. All companies are reminded to file their CIT returns for YA 2020 by Dec 15, 2020. This includes companies with no business activities or those in a loss position.

The extended tax filing due date of Dec 15 will not be available from YA 2021.

Instead, companies will be required to e-file their YA 2021 CIT Returns by Nov 30, 2021.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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