It seems that you are not need to entirely shut down your company’s activities in Singapore if you choose to stop them for a long length of time. When it comes to tax and corporate perks, you may instead identify it as a dormant company and reap the benefits of this classification. For Filing for Dormant Company be sure of the followings:
To be quite clear, there’s no misunderstanding what I’m talking about. Not one of them is the benefit of not having to file taxes. Your firm has ceased operations, but you are still required to pay the taxes linked with it by the Singaporean government, yes, you read it properly.
However, do not get very agitated by it. A Singapore inactive corporation’s tax return filing process is straightforward and uncomplicated. We’ll get you up to speed as quickly as we can.
Prior to anything more, though, let’s make certain that we grasp the basics. What is a “dormant firm” under Singaporean law? The process of seeking dormancy status is complicated. When a company goes out of business, what are the advantages to the public?
Exactly what does it mean to have a dormant company?
It is a Singapore-registered firm that is currently not engaged in any commercial or revenue-generating operations.
Singapore’s dormant companies are not allowed to be involved in any business-related activities at any time. Other benefits include reduced statutory tasks, as well as time off from work.
There are two government bodies in Singapore, the Accounting and Corporate Regulatory Authority (ACRA) and the Singapore Inland Revenue Authority (IRAS), who are responsible for monitoring dormant firms. They seem to have differing definitions of dormant companies, which is a strange coincidence.
A defunct business, as defined by ACRA, ceases to exist
The Accounting and Corporate Regulatory Authority (ACRA) of Singapore defines dormant businesses as companies that have been registered but have not conducted any accounting activity for an extended period of time.
Understand that accounting transactions refer to those activities that have an impact on your company’s financial statement. Alternately, you may conceive of these activities in terms of commercial transactions that have the potential to bring in revenue or cost your company money.
While your company is inactive, ACRA does not expect it to be involved in the cash processing sector. Do not risk losing your status as a dormant company if you do not comply.
The Indian Revenue Authority’s definition of an inactive corporation
Companies that have been inactive for more than 12 months are considered dormant, according to the Singapore Inland Revenue Authority (IRAS).
For example, the Internal Income Service (IRAS) will assess the company’s revenue stream throughout the year 2020 when you ask to have your corporation declared inactive in Year of Assessment (YA) 2021.
You may process your business’s cost payments even if the ACRA prohibits inactive enterprises from incurring expenses, since the IRAS allows you to do so. Even if you’ve been paying your bills on time and your company hasn’t earned any revenue, you may be eligible for dormancy status.
Singapore’s Dormant Company Forming Process
There aren’t any specific forms that you’ll need to fill out in order to have your company declared dormant. IRAS and ACRA are only informed of your intentions via your company’s annual tax filings.
They will next analyze your company’s specs in compliance with their requirements for dissolved companies. Only those companies that meet both the ACRA and IRAS conditions are granted dormant status.