5Ws of ECI (Estimated Chargeable Income) Filing in Singapore

Estimated Chargeable Income, commonly regarded as ECI, is an estimation of a company’s taxable income for a given Year of Assessment (YA). Precisely, it is the company’s annual turnover minus expenses for the YA. An ECI amount should include the company’s main source of revenue excluding any gains on disposal of fixed assets.

This blog will throw light on 5Ws viz., what, when, where, why and who factors associated with the ECI Singapore, enabling you to understand it more clearly.

•  Where and when to file the ECI: You must file the Estimated Chargeable Income or ECI with IRAS, the tax authority of Singapore, within three months from of the end of your company’s financial year-end.
For instance, if your company’s accounting year end is 31 December 2012, you must file your company’s ECI on and before 31 March 2013.

•  Who files the ECI: All Singapore companies irrespective of size and type must file their company’s ECI to IRAS unless your company is exempted  from filing under administrative concessions (that come into effect from YA2013).

Under administrative concessions, companies whose accounting year end on or after October 2012 are not required to file ECI if the following two conditions are fulfilled:

1. Annual turnover is not more than S$1 million and
2. ECI is NIL.

•  Why you should file the ECI: Filing ECI within the specified period is one of the corporate compliance needs in Singapore. Submission of ECI is important as the revenue data received from ECI filing is a key source of evolving government policies.

•  What if I do not file: If your company fails to submit ECI within the stipulated period of 3 months, IRAS will issue a Notice of Assessment (NOA) based on its own estimate of the revenue of your company. If you do not agree with the assessment amount, you have one month time to submit compliant through electronically via myTax Portal or written application. Otherwise, NOA will be recognized as the final assessment.

•  What are benefits of early filing: The companies filing ECI early are awarded installment options from IRAS. The sooner you file ECI, the higher the number of payment installments bestowed to your company.

For instances:  The companies whose FYE is 31 December and e-file their ECI by 26th January would get 10 installments for paying taxes. Those who e-file by 26th February may have eight installments and e-filing by 26th March would be awarded 6 installments. The companies who e-file after 26th March would not get any installment options.

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