IRAS - Dormant Companies and Their Tax Filing Requirements in Singapore
What is a Dormant Company?
A dormant company is one that does not carry on business and has no income for the entire basis period. For instance, if a company did not carry on business and had no income for the financial year ending 30th June 2024, it would be considered dormant for the Year of Assessment (YA) 2025.
Key Points to Note About Dormant Companies in Singapore:
1. Filing of Corporate Income Tax Return
Even though the company is dormant, it is still required to file its Corporate Income Tax Return (Form C-S/Form C-S (Lite)/Form C) by 30th November each year, unless granted a waiver by IRAS.
2. Filing Simplified Tax Return Form
Dormant companies can file a simplified Income Tax Return. This is done by completing only the essential fields. Dormant companies are not required to submit financial statements to IRAS.
3. Waiver Application
If a dormant company meets certain criteria, it can apply for a waiver from filing its Corporate Income Tax Return. These criteria include:
- The company must have been dormant and have previously filed its tax returns and financial statements up until its cessation of business.
- The company must not own investments that generate income.
- The company must not intend to recommence business within the next 2 years.
4. Capital Allowances and Trade Losses
Dormant companies cannot claim capital allowances or deductions for any expenses incurred during the period they are dormant. However, unutilised trade losses brought forward from a previous year (when the company was active) can be carried forward and used to offset income when the company resumes business.
5. Donations by Dormant Companies
Dormant companies can still claim donations made to approved Institutions of Public Character (IPC) or the Singapore Government. However, they must file Form C-S/Form C-S (Lite)/Form C through the appropriate filing channel.
While dormant companies in Singapore are not actively conducting business, they still have filing obligations to meet, including submitting the necessary corporate income tax returns and ensuring compliance with IRAS regulations. It is important to understand the requirements for filing simplified returns, applying for waivers, and managing potential deductions for capital allowances and trade losses.
