The Upcoming ECI Filing Deadline: Does It Apply To Me?
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If you're one of our Finance clients and your financial year ended on 31 December 2021, you’ll notice we just sent you a reminder about the deadline for filing your ECI. Yes, another deadline; another accounting acronym!
If we’re already doing your bookkeeping and have access to your bank account records, you don’t need to do a thing. We will file the ECI on your behalf and you can go ahead and delete that email we sent you about it.
But if you need to provide us with more information and if you want to know what we mean when we say your ECI is due, read on!
What is ECI?
ECI stands for Estimated Chargeable Income. In other countries, this might be referred to as your estimated chargeable profits, or your profits after tax.
Before we go on, a quick reminder that in Singapore, you are always paying your tax for the previous year. So your ECI for 2022 refers to what you think your chargeable income amounted to in 2021.
You only need to file your ECI by the end of this month if you follow a December 31 financial year and you meet the following two criteria:
1. Your revenue was above 5 million.
2. You made any chargeable income (profit) at all.
If your company fits these criteria, it’s your choice to file your ECI. There are no penalties for not filing it, but it can be beneficial to file it.
Why should I file my ECI?
The benefit of filing your ECI before 31 March is that it allows you to pay your estimated taxes via GIRO (so in instalments), rather than as one lump sum at the end of the financial year (which is December here in Singapore). December is typically an expensive-enough time of year as it is, without paying your entire annual tax bill. So if you’re eligible to file an ECI, we recommend you do so before the deadline of 31 March in order to spread the payments out.
The earlier you file your ECI, the more you can spread out the payments. So, if you had filed in January, you could spread the payments over 10 months, if you filed in February you could spread the payments over eight months and if you file in March you can spread the payments over six months (see the table below from the IRAS website).
If you miss the March 31 deadline, you’ll just have to wait until the end of the year to pay the full amount.
Ok I want to file my ECI - what do I need to do?
If you haven’t yet let the Accela Finance team know if you intend to file, and would like to do so, get in touch and we’ll let you know if there’s any additional information we need from you.
As of 2021, every company is required to file online (a measure that was phased in over the past three years). With this relatively recent change, we’ll need corporate pass access to your accounts, or to receive the information from your accountants digitally.
If we’re already your corporate secretary with corporate pass access, you don’t need to do anything! We’ll be in touch about your next deadlines, which are completing and filing your AGM by 30 June and filing your annual return with ACRA by 31 July.
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The Accela Finance team is always around and willing to help explain the ins and outs of the Singapore tax and compliance landscape so please don’t hesitate to reach out if you have any questions: [email protected]