Tax Filing Requirements for Dormant Companies in Singapore
Singapore’s vibrant business landscape hosts a wide variety of companies, including dormant companies — businesses that have temporarily ceased operations but are maintained in readiness for future activities. Though inactive for now, these companies hold untapped potential and remain poised for growth.
However, understanding the tax filing requirements for dormant companies can be confusing, especially for first-timers. In this blog, we explain the essentials about tax filings for dormant companies — and how our team can assist you!
What is Considered a Dormant Company?
Both the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS) define dormant companies, but their criteria differ slightly. Let’s take a closer look at each definition.
ACRA’s Definition of a Dormant Company
According to ACRA, a company is considered dormant if it has no accounting transactions throughout the financial year. However, under the Singapore Companies Act, certain activities are allowed without affecting dormant status, such as:
- Appointing a company secretary
- Appointing auditors
- Maintaining a registered office
- Keeping statutory registers and records
- Paying government fees or charges
- Paying composition sums
- Making or receiving small payments (not exceeding S$5,000)
IRAS’s Definition of a Dormant Company
From IRAS’s perspective, a company is dormant if it does not conduct business and does not generate any income during the entire basis period. For example, if a company is inactive and earns no income throughout the financial year ending in 2024, it would be considered dormant for the Year of Assessment (YA) 2025.
What Must Dormant Companies File?
Unless specifically exempted by IRAS, a dormant company must still file its corporate income tax return (Form C-S, Form C-S (Lite), or Form C) by 30 November each year.
Capital Allowances, Trade Losses, and Donations for Dormant Companies
Dormant companies are not allowed to claim capital allowances or deductions for business expenses incurred during the period of dormancy, as they are not actively trading.
However, unused trade losses and donations from previous Years of Assessment — when the company was active — can be carried forward and deducted against future income, provided the company meets the shareholding test requirements.
Let Us Help You With Your Dormant Company’s Tax Filing in Singapore
Managing tax compliance for a dormant company may seem straightforward, but mistakes can lead to penalties. Keeping proper records and filing correctly and on time is crucial. At WLP, our professional advisors can help you streamline the process and ensure you meet all regulatory obligations smoothly.
Contact WLP today to learn more about how we can support your company’s compliance needs!