According to Singapore’s Companies Act, the primary legislation regulating the conduct of companies in the country, companies must comply with the annual filing requirements of the Accounting and Corporate Regulatory Agency (ACRA), as well as the Inland Revenue of Singapore (IRAS).
Who is obligated to be audited?
The Companies Act states that private limited companies must have their financial statements audited by a qualified public accountant at least once a year, unless they qualify for an exemption.
Annual returns and XBRL filing
All companies in Singapore are required to file annual returns with ACRA. Listed companies must file their AR within five months after the end of their financial year, while non-listed companies have up to seven months. If the company holds an AGM, the AR must be submitted within one month following the meeting. In cases where an AGM is not required, the AR must be filed no later than seven months after the financial year-end.
In terms of financial statement submission, most companies are required to file their statements in XBRL (eXtensible Business Reporting Language) format. However, certain entities such as Exempt Private Companies (EPCs) and dormant companies may qualify for simplified filing requirements or declaration-based submissions instead of full XBRL reports.
Audit exemptions
A company qualifies for audit exemption under the small company concept if it is a private company and meets at least two of the following three criteria for the last two consecutive financial years:
- Total annual revenue ≤ S$10 million (US$7.77 million)
- Total assets ≤ S$10 million (US$7.77 million)
- No more than 50 full-time employees
A group of companies (holding and subsidiaries) may also qualify as a small group for audit exemption if the group meets at least two of the same three thresholds on a consolidated basis.
Additionally, dormant companies with no accounting transactions and total assets not exceeding S$500,000 (US$388,586) are also exempt from audit requirements.
Annual General Meeting
An annual general meeting (AGM) is obligatory for a Singapore company. The AGM can be held anywhere in the world, whereby the shareholders discuss the following items:
- Approval of the audit reports;
- Re-elect directors (if required);
- Re-appointing auditors;
- Declare dividends; and
- Transact other.
AGMs are to be held:
- Once every year;
- Within 15 months from the previous AGM; or
- Six months from the FYE date.
Exemption from AGM is allowed for private companies if:
- Financial statements are sent to all shareholders within five months of the FYE, and
- No shareholder requests an AGM at least 14 days before the six-month deadline
If a request is received, the company must hold the AGM within 14 days.
Appointing auditors
Within three months of company incorporation, company directors must appoint an auditor, unless they fall under the following criteria:
- Annual turnover is less than S$5 million (US$3.7 million);
- The total number of shareholders is less than 20; and
- All shareholders are individuals and not corporations.
The role of the auditor is to report if the company’s financial statements comply with the relevant financial reporting standards and to provide an objective analysis of the company’s financial performance. Additionally, only public accountants registered with ACRA can conduct company audits.
Accounting Standards
There are two main accounting standards, set out by the Accounting Standards Council (ASC) of Singapore, that companies are required to adhere to when preparing their financial statements:
- The Singapore Financial Reporting Standards (SFRS) - based on the International Financial Reporting Standards (IFRS)
- Singapore Financial Reporting Standard (SFRS) for Small Entities – based on IFRS for SMEs.
Further, there are approximately 41 different standards that provide specific guidelines for financial reporting, reporting inventory, industry related standards, among others.
Financial statements are prepared under the accrual basis of accounting, which is one of the main principles of the accounting standards in Singapore. Under this accounting method, revenues are recorded when a transaction occurs rather than when the payment is received.
Fiscal year
All companies in Singapore must determine a financial year-end (FYE) upon incorporation.
This date marks the end of the company’s accounting period and is used to schedule annual compliance obligations such as AGMs, tax filings, and the submission of annual returns. While companies are free to choose any date, many opt for December 31 or the last day of a calendar quarter — March 31, June 30, or September 30 — for administrative convenience or to align with group reporting cycles.
The choice of FYE can also impact a company’s eligibility for tax incentives. Under the Startup Tax Exemption (SUTE) scheme, newly incorporated qualifying companies may receive a 75 percent tax exemption on the first S$100,000 (US$77,712) of chargeable income and a 50 percent exemption on the next S$100,000 during the first three consecutive years of assessment. For some businesses, selecting December 31 as their FYE helps maximize the benefit period within the standard tax assessment timeline.
Annual reports
Singapore’s authorities require companies to submit their estimated chargeable income within three months from the financial year-end. This accounting should include the following:
- Statement of comprehensive income (profit and loss accounting);
- Balance sheet;
- Shareholder details;
- Dates of annual returns and AGM;
- Detail of company officers;
- Cash flow statement; and
- Statement of changes in equity.
Penalties for non-compliance
Failure to comply with Singapore’s corporate filing and audit obligations can lead to significant consequences. Companies that file their annual returns late may face penalties of up to S$600 (US$466).
More serious breaches of the Companies Act can result in fines of up to S$5,000 (US$3,885), and persistent non-compliance may trigger court summons or even arrest warrants issued by ACRA.
In terms of taxation, companies that fail to file tax returns for more than two years can be penalized with a fine of up to S$1,000 (US$777), in addition to a penalty equal to twice the amount of tax owed.
