Exempt Private Company (EPC)
An Exempt Private Company (EPC) is a private company that has not more than 20 shareholders and its shares are not held by another corporation under Section 4(1) of the Companies Act. It can also be a company that the Minister has gazetted as an EPC.
The following companies are exempted from audit:
- EPC with revenue not more than S$5 million for the financial year starting on or after 1 June 2004; or
- EPC with revenue not more than S$2.5 million for the financial year starting on or after 15 May 2003 but before 1 June 2004; or
- Any company, including an EPC, that is dormant for the financial year starting on or after 15 May 2003.
Companies exempted from audit requirements (i.e. need not have their accounts audited) will have to prepare unaudited accounts for purposes of Annual General Meetings (AGMs) and filing with ACRA. If the company opts for the accounts to be audited, it will submit the audited accounts together with the auditor’s report.
The following companies are exempted from audit:
- EPC with revenue not more than S$5 million for the financial year starting on or after 1 June 2004; or
- EPC with revenue not more than S$2.5 million for the financial year starting on or after 15 May 2003 but before 1 June 2004; or
- Any company, including an EPC, that is dormant for the financial year starting on or after 15 May 2003.
Companies exempted from audit requirements (i.e. need not have their accounts audited) will have to prepare unaudited accounts for purposes of Annual General Meetings (AGMs) and filing with ACRA. If the company opts for the accounts to be audited, it will submit the audited accounts together with the auditor’s report.
Saving on Tax Dollars/ Basic information on corporate tax
Full tax exemption scheme for newly incorporated companies
Under the full tax exemption scheme, a newly incorporated company that satisfies the qualifying conditions can claim full tax exemption on the first S$100,000 of its normal chargeable income (i.e. income taxed at the prevailing corporate tax rate, excluding Singapore franked dividends) for each of its first three consecutive YAs. With effect from Year of Assessment (YA) 2008, a further 50% exemption is given on the next S$200,000 of the normal chargeable income for each of the first three consecutive YAs.
To qualify for the full tax exemption scheme for new start-ups, the company must:
a) be incorporated in Singapore;
b) be a tax resident in Singapore for that YA; and
c) not have more than 20 shareholders throughout the basis period for that YA where:
i) all of the shareholders are individuals beneficially and directly holding the shares in their own names; or
ii) at least one shareholder is an individual beneficially and directly holding at least 10% of the issued ordinary shares of the company.
Claim for tax exemption under the scheme for new start-up companies must be made at the point when the Estimated Chargeable Income (ECI) and/ or the income Tax Return (Form C) are filed.
To qualify for the full tax exemption scheme for new start-ups, the company must:
a) be incorporated in Singapore;
b) be a tax resident in Singapore for that YA; and
c) not have more than 20 shareholders throughout the basis period for that YA where:
i) all of the shareholders are individuals beneficially and directly holding the shares in their own names; or
ii) at least one shareholder is an individual beneficially and directly holding at least 10% of the issued ordinary shares of the company.
Claim for tax exemption under the scheme for new start-up companies must be made at the point when the Estimated Chargeable Income (ECI) and/ or the income Tax Return (Form C) are filed.
Productivity and Innovation Credit Scheme
To encourage businesses to invest in productivity and innovation, the Productivity and Innovation Credit (PIC) Scheme was introduced in Budget 2010 and enhanced in Budget 2011 and 2012.
The tax benefits under PIC are available from Years of Assessment (YA) 2011 to 2015; businesses (excluding investment holding companies) can enjoy 400% tax deduction/capital allowances claim or 60% cash payout (for YA 2013 to 2015; was 30% for YA 2011 & 2012) on investments in any of the following six qualifying activities:-
1) Acquisition or Leasing of PIC Automation Equipment;
2) Training of employees;
3) Acquisition of Intellectual Property Rights (IPRs);
4) Registration of Intellectual Property Rights (IPRs);
5) Research & Development Activities (R&D); and
6) Design Projects Approved by DesignSingapore Council.
The expenditure cap is S$400,000 per activity (combined cap of S$1,200,000 for YA 2013 to 2015) for each YA. For the cash payout option, up to S$100,000 of expenditure for all 6 qualifying activities can be converted per YA (i.e. maximum cash payout per YA is S$60,000 -> S$100,000 x 60%).
Please note that expenditure incurred on any of the above six activities has to meet certain criteria/definitions in order to be eligible for tax benefits under the PIC Scheme.
New!
The PIC Bonus gives businesses a dollar-for-dollar matching cash bonus for YAs 2013 to 2015, subject to an overall cap of $15,000 for all 3 YAs combined.
For more information on the PIC Scheme, please visit the IRAS website at www.iras.gov.sg .
The tax benefits under PIC are available from Years of Assessment (YA) 2011 to 2015; businesses (excluding investment holding companies) can enjoy 400% tax deduction/capital allowances claim or 60% cash payout (for YA 2013 to 2015; was 30% for YA 2011 & 2012) on investments in any of the following six qualifying activities:-
1) Acquisition or Leasing of PIC Automation Equipment;
2) Training of employees;
3) Acquisition of Intellectual Property Rights (IPRs);
4) Registration of Intellectual Property Rights (IPRs);
5) Research & Development Activities (R&D); and
6) Design Projects Approved by DesignSingapore Council.
The expenditure cap is S$400,000 per activity (combined cap of S$1,200,000 for YA 2013 to 2015) for each YA. For the cash payout option, up to S$100,000 of expenditure for all 6 qualifying activities can be converted per YA (i.e. maximum cash payout per YA is S$60,000 -> S$100,000 x 60%).
Please note that expenditure incurred on any of the above six activities has to meet certain criteria/definitions in order to be eligible for tax benefits under the PIC Scheme.
New!
The PIC Bonus gives businesses a dollar-for-dollar matching cash bonus for YAs 2013 to 2015, subject to an overall cap of $15,000 for all 3 YAs combined.
For more information on the PIC Scheme, please visit the IRAS website at www.iras.gov.sg .
Disclaimer
Whilst every effort has been made to ensure that the information provided is correct, accurate and up-to-date, no warranty is given that it is free from error or omission. It should also be noted that the information given is of a general nature and may not be applicable in a specific situation. Accordingly, we disclaim liability for any act done or omission made on the information provided and any consequences for any such act or omission.
