Did you know that from 30 April 2021, a higher penalty would apply if you file your annual lodgement with the Accounting and Corporate Regulatory Authority (ACRA) past the due date? Moving forward, under the revised penalty framework for Annual Lodgements, a late lodgement penalty of $300 will be imposed in the event of late filing within the first three months. If your annual lodgement is filed more than three months from the due date, take note that you will face a fine of $600 for non-compliance.
The revised penalty framework applies to all Singapore incorporated companies, Variable Capital Companies (VCCs) and Limited Liability Partnerships (LLPs). Depending on the type of entities, the annual statutory obligations with ACRA include Annual Returns, Annual Filings of Financial statements or Annual Declaration.
The objective of this decision is to simplify compliance by using a 2-tier penalty framework and also stimulate companies, VCCs and LLPs to perform their statutory obligations diligently. This revised penalty framework only applies to late filing of annual lodgements and does not apply to other ad-hoc filings.
There are 3 serious implications to companies under the revised penalty framework:
1. A more severe penalty for late filing. The fine for late filing would be at least $300 (even if it’s only 1 day late) and may reach $600 if filing is done more than three months late.
2. The revision has taken effect from 30th April 2021, which means that you must act quickly to file the annual returns after the financial year end (FYE)
3. Company directors may face composition sum or prosecution actions for the breach of annual statutory obligations.
As a company, you want to always be in the know on all the latest happenings and developments that can affect your business. If you are relatively new to filing the annual lodgements for your company, here are some of the frequently asked questions to familiarise yourself in advance:
To avoid incurring the fine of up to $600 of the updated penalty framework, it is important for your company secretary to file for your company’s annual lodgements on time. Keep in mind that under Section 197 of the Companies Act, a listed company is required to file annual returns within 5 months after FYE, and for all other companies, within 7 months after FYE.
On the other hand, if you’re a company having share capital and keeping a branch register outside Singapore, your company secretary must file your annual returns within 6 months after FYE in the case of a listed company or within 8 months after FYE in the case of a company that is not listed.
To be on the right course and keep your annual filing in check, why not scale down on these functions by working with your trusted one-stop corporate service provider to prepare the necessary records for you? That way, you can boost your bottom line and spend more time focusing on other important areas of your business. To get started, you can explore our standard plan for corporate secretarial services that includes filing of annual returns to ACRA, preparation of Annual General Meeting (AGM) documents and more to meet your needs.
To stay on top of the mandatory annual compliance requirements, you will also need to file your Corporate Income Tax Return (Form C-S / Form C-S (Lite) / Form C) and estimate chargeable income (ECI) with the Inland Revenue Authority of Singapore (IRAS).
Note that starting from Year of Assessment (YA) 2021, you will have to file the Form C-S/ Form C-S (Lite / Form C electronically by 30 November, after which the following actions may ensue from the late or non-filing of tax returns:
To avoid the above enforcement actions at all costs, you can better mitigate any risk and continue running your business confidently with Chartsworth’s tax services.
More importantly – beyond timely preparation of your annual filing of requirements with both ACRA and IRAS -, complete information accuracy is a critical factor to ensure a smooth filing process from start to finish. It is hence important to have an experienced team in place who can help with all the statutory compliance. Want to keep things simple for yourself? Consider outsourcing these functions with Chartsworth – your information will be handled with care by experts.