Estimated Chargeable Income (ECI)
What is ECI?
ECI means Estimated Chargeable Income. It is an estimate of a Singapore company’s chargeable income for the given Year of Assessment (YA). The amount of ECI declared is based on the amount before the deduction of any exempt amounts under the partial tax exemption or tax exemption schemes for new start-up Singapore companies.
Revenue Figure in ECI Form
Revenue refers to a Singapore company’s main source of income, and excludes earnings like gain on disposal of fixed assets. If your Singapore company is an investment holding company, your main source of income will be your investment income. Since the 1st Jan 2009 Singapore companies have been required to declare their revenue in the ECI form.
Where the audited accounts are not available or required, you can refer to the company’s management accounts for the purpose of declaring the amount of revenue. Should the revenue amount based on audited accounts be different from that declared in the ECI Form, and there is no change in your ECI, you are not required to revise the revenue figure.
Deadline to File ECI
Singapore companies are required to submit their ECI within three months of their financial year ending. For example if a Singapore company’s accounting year ended on 31st October 2013, it is required to submit an estimate of its chargeable income and it’s revenue for YA 2014 to the Controller by 31 January 2014.
If the company fails to do so, a Notice of Assessment based on the Controller’s estimation of the companies’ income may be issued and where relevant, penalties may be imposed if the Controller does not receive the companies’ ECI by the due date. If the company does not agree with the Controller’s estimated assessment, it must object in writing within 30 days from the date of the Notice of Assessment. Otherwise the estimated assessment will be treated as final, even if the actual income based on the companies Form C and accounts submitted subsequently is lower than the estimates. This means the Controller will not amend the estimated assessment based on your Form C and accounts since there is no valid objection to the estimated assessment within the stipulated time.
Investment Holding Companies
From Year of Assessment 2009, all non-trade income of investment holding companies and other companies must be assessed in an accounting year end basis and not the usual calendar year basis.
This means that all investment holding companies must file ECI within three months after the end of its financial year-end. For more details, you may refer to the Supplementary Circular “Simplification of Income Tax Rules and Procedures – Assessment of Non-Trade Income and Deduction of Approved Donations on an Accounting Year Basis “.
Ways to File ECI
You may file your company’s ECI:
- Electronically via myTax Portal, or
- By completing and submitting an ECI Form.
To encourage e-Filing, the number of instalments you get for e-Filing your company’s ECI is more than that for paper-filing.
Instalments granted by IRAS
In order to enjoy the convenience of paying in up to ten instalments, you should e-file the ECI by the 26th of the month immediately after your financial year end. If you e-file by the 26th of the second or third month after your financial year end, you can pay by 8 or 6 instalments respectively. If your Singapore company qualifies for instalments and has previously paid its tax by instalments, the instalment plan will be sent to your Singapore company together with your Notice of Assessment (NOA). However, if your company has not paid its tax by instalments previously, or your company is filing ECI for the first time, instalments will not be given automatically. In this case, if you wish to pay your tax by instalment, you will need to request for the instalment plan.
For example the company year-end is November.
Number of instalments
Number of instalments
|26th December||10||24th December||5|
|26th January||8||24th January||4|
|26th February||6||24th February||3|
|After 26th February||No instalments||After 24th February||No instalments|
Any Singapore company that prefers to pay its taxes by instalments must write in, email or call IRAS to inform it of the companies’ preference before filing the ECI. In this way, the instalment plan will be sent to the company together with its Notice of Assessment. For paper filers, you need to complete and submit the ECI Form (with request for payment by instalments) i.e. Form IRIN322. Please note that to enjoy the maximum number of instalments allowable for each qualifying month, this form must reach IRAS by the 24th of that month. If you wish to pay by GIRO, you must complete and submit a GIRO Application Form.
Please note that Singapore companies that are not registered in Singapore do not qualify for payments by instalments.
Although a company’s Estimated Chargeable Income may be zero, it still has to file a “NIL” ECI.
In the event the company qualifies for administrative concession, it does not need to file ECI for the years(s) of assessment unless the company starts having activities and makes profits.
Starting from Year of Assessment 2013, for companies with financial year ending October 2012 and after, companies need not file ECI for a particular financial year if:-
a) The annual revenue is not more than $1 million for the financial year; and
b) The company’s ECI is NIL.
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