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Singapore Updates Tax Rules For Company Liquidations

by Mary Swire, Tax-News.com, Hong Kong

03 March 2021


The Inland Revenue Authority of Singapore has updated its guidance on the tax requirements for companies being liquidated and those under receivership.

Companies that have commenced voluntary or compulsory liquidation will have a liquidator appointed by the company or the Court. The liquidator is required to fulfil certain duties prescribed in the Income Tax Act.

The rules include that a company in liquidation with receipts has to file its Declaration of Receipts and Payments with IRAS on an annual basis. A company in liquidation without receipts has to file its Declaration every four years.

With effect from May 1, 2021, a company in liquidation will no longer be required to split the receipts and payments based on calendar year when filing its Declaration with IRAS, following the entry into effect of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA) on July 30, 2020.

Under the IRDA, liquidators are required to prepare an account of the liquidator's receipts and payments for a period of 12 months after the date of the liquidator's appointment and every subsequent period of 12 months. Following the change, when filing a declaration with IRAS, liquidators can adopt the same 12-month period without the need to split based on calendar year.

The guidance provides examples of how these rules should apply. IRAS has said a revised Declaration of Receipts and Payments form will be available from May 1, 2021, and IRAS has newly released worked examples of the filing requirements.

In addition, with regards the completion of liquidation, with effect from May 1, 2021, IRAS will no longer issue tax clearance letter for all companies under liquidation. Instead, before the liquidator proceeds with the completion of the liquidation process, they can log in to myTax Portal and rely on the following documents to establish if the company indeed has no outstanding tax matter or tax liability:

  • Tax matter - Latest Notice(s) of Assessment issued by IRAS; and
  • Tax liability - Latest Statement of Accounts issued by IRAS.

TAGS: compliance | tax | business | tax compliance | revenue guidance | Singapore | tax authority

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