Annual Review for Singapore Companies
In Singapore, private limited companies only need to perform accounting, bookkeeping, and tax filing once a year, without the need for monthly accounting.
Newly registered companies must hold an Annual General Meeting (AGM) within 18 months of registration. The annual accounts and financial reports must be submitted to the Accounting and Corporate Regulatory Authority (ACRA), and taxes must be filed with the Inland Revenue Authority of Singapore (IRAS). This series of tasks is conducted once for each financial year and is collectively referred to as the annual review.
What is a Financial Year
In Singapore, there is no specific requirement for the financial year to start or end at a particular time, so companies have the freedom to choose their financial year. Typically, companies establish the timing of their financial year during the first annual review in consultation with their accounting firm. The first financial year can be up to 18 months long, and the financial year can also be changed after it has been declared.
Reports Required for Annual Review
1.Annual Financial Statements assist companies established in Singapore to organize annual accounts and prepare annual financial reports as required by government departments. The report includes bookkeeping, drafting of directors' reports, directors' declarations, income statements, balance sheets, cash flow statements, and notes to the accounts;
2.Annual General Meeting (AGM) reporting refers to the requirement for a company to hold an annual shareholders' meeting within 18 months of establishment, presided over by the company secretary, with resolutions voted on and signed by all directors;
3.Annual Tax Returns assist companies established in Singapore to organize annual accounts, annual tax estimates, and fill out tax forms as required by the government's tax department;
4.Corporate Tax Filing, as required by the Inland Revenue Authority of Singapore (IRAS), dictates that private limited companies in Singapore must file corporate taxes for each financial year;
5.Companies meeting any of the following conditions require an audit:
① Total sales and total assets of the Singapore company and its group exceed 10 million SGD;
② Total sales of the Singapore company and its group exceed 10 million SGD and the number of employees is more than 50;
③ Total assets of the Singapore company and its group exceed 10 million SGD and the number of employees is more than 50.
Corporate tax is paid based on the pre-tax profit of the company's financial year, not on turnover; tax filing is generally due within three months of the financial year-end for estimated taxes.
Penalties for Overdue Annual Review
According to the Singapore Companies Act, within 18 months of company registration, the first Annual General Meeting (AGM) must be held. Subsequently, an AGM must be held within each calendar year and not more than 15 months after the last AGM. Within one month of holding the AGM, the company must make an annual declaration to the Accounting and Corporate Regulatory Authority (ACRA), which is the annual review.
For companies that fail to hold an AGM and complete the annual review within the specified deadlines, their directors can be prosecuted by the court and subjected to fines.
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