The Inland Revenue Authority of Singapore (IRAS) issues the Notice of Assessment (NOA) as a document to inform taxpayers of their tax assessment for a specific year. The total amount of tax due from the taxpayer will be listed in the NOA.
Which Four Different Types of Notices of Assessment are Filed with Company Income Tax Returns By the IRAS?
Type 1: To obtain a Type 1 Notice of Assessment (NOA), the company or a tax agent submits an ECI (Notice of Assessment).
Type 2: Within three months of the fiscal year’s ending, your company must submit its Estimated Chargeable Income (ECI). If you miss the IRAS deadline for Form C and Form C-S submissions, you must declare a low Estimated Chargeable Income. If you don’t take the aforementioned action, you’ll receive this NOA Type 2. IRAS also issues this kind of communication regarding impending tax assessments.
Type 3: IRAS generates this NOA once your company has successfully filed its Form C and Form C-S.
Type 4: The last IRAS tax evaluation. You must object to the final NOA within two months of receiving the issued tax bill.
These Notices of Assessment also include payment guidelines in addition to the amount of tax payable. As a result, you will also become aware of the deadlines for settling your account and the various tax payment options.
Additionally, GIRO, internet banking, cashier’s orders, checks (including NETS), and cash (including GIRO) are the preferred payment methods for IRAS when it comes to paying taxes. This must be done within a month, per the NOA deadlines. A penalty of up to 5% of the amount owed may be imposed if your taxes are not paid on time.
When Must You File an Objection to a Notice of Assessment (NOA)?
You can object to any Notice of Assessment (NOA) within two months from the date of its issue. For instance, the NOA was issued on July 1, 2022, and your company has until September 1, 2022, to submit a Notice of Objection to IRAS should it have any disagreement.
Objections to the Notice of Assessment (NOA)
If someone disagrees with the assessment made, they must submit a written objection within 30 days of the date the notice of assessment was issued. If they do not, the assessment will be considered final.
How Important Is the Notice of Assessment (NOA)?
In Singapore, the income tax NOA serves as a kind of invoice. Following an analysis by IRAS of your reported income, a corresponding tax bill will be generated that includes all the information necessary for filing taxes, including the amount owed and the filing deadlines.
But as it turns out, the sum isn’t always predetermined. Instead, the NOA gives you 30 days to contest the payable amount. You can continue by submitting a formal objection outlining all the problems you’ve found.
What Is the Statutory Deadline for Additional Assessments By IRAS?
The law requires IRAS to provide additional evaluations within a specific time frame.
The statutory time limit for IRAS to levy an assessment or an additional assessment is four years. The statutory deadlines do not, however, apply in cases of fraud.
All organizations are required to keep appropriate accounting records for five years, through December 31, 2024, per the Year of Assessment 2020 (the time frame from January 1 to December 31).
Guidelines for Reading NOA for Singapore Companies
The income tax Notice of Assessment for your business may contain the following details:
Amount of Assessable Income: The term “assessable income” refers to the total amount of income that you report on Form C, Form C-S, or your Estimated Chargeable Income form. In other words, it is the total income before deductions for corporation taxes.
Amount of Chargeable Income: The Chargeable Income Amount, or the amount of income that must be taxed, is the basis for IRAS taxes. Subtract the total of all deductible expenses from the assessable income amount to get this number.
Payable Taxes: You must pay taxes on this sum, according to IRAS. This is calculated by multiplying the amount of taxable income by the current tax rates.
Refundable or Dischargeable Amount: If IRAS analyses and concludes that the final tax due is less than the tax paid on the initial NOA, there will be a refund given, which is also displayed in the final tax bill.
Guidelines for Reading NOA for Singaporean Individuals
The Notice of Assessment for Singaporean individual taxpayers contains the following details:
The Assessable Income: This represents your total income from things such as salaries, interest and renting out of your property.
Personal Reliefs: The tax system in Singapore provides personal reliefs to taxpayers that are different from the deductibles offered to businesses.
Income Chargeable: You must pay personal taxes on the amount of chargeable income you receive under the NOA for individuals. As with businesses, the amount is determined by deducting reliefs from your assessable income.
Payable Taxes: By comparing your Chargeable Income to the appropriate personal income tax rates, you can calculate the total amount of tax you must pay.
How is Income Tax Determined?
The formula for computing a person’s taxable income, which the Inland Revenue Authority of Singapore provides, is as follows:
- Total Income Less Expense = Statutory Income
- Statutory Income Less Donations = Assessable Income
- Assessable Income Less Personal Reliefs = Taxable Income
How Do We Get a Copy of the Notice of Assessment (NOA)?
(i) Tax Bills Can Be Found on MyTax Portal
By logging in to myTax Portal, you can download your tax bills for the current tax year and the previous three.
Logging in requires SingPass or a SingPass Foreign Account. Next, select each NOA and download a copy of the notices by clicking Notices/Letters > Corporate Tax > View Notices.
(ii) MyTax Portal Does Not Contain Any Tax Bills
If myTax Portal doesn’t have the tax bill, you can get a copy from the Taxpayer & Business Service Centre at IRAS, Revenue House. The user is required to pay search fees (SGD20 per search) and document fees (SGD10). Certified copies are available at SGD3 per page, and uncertified copies at SGD0.30 per page). For payment for these services, you can transfer funds using internet banking to the IRAS bank account.
The following documents are required to be brought to the meeting by representatives and tax advisors:
- Letter of authorization from the director of the business (with your full name, NRIC number, signature, and a detailed explanation of the papers required)
- Original NRIC must be provided. If not, you must present a digital copy of your passport.
- If you send a representative, make sure he or she always carries his or her original NRIC.
Since 2020, Singapore tax returns have had to be submitted electronically. By May 31 of the year following the filing of your tax return, IRAS will send you an assessment notice. The business will then have a month to make the payment.
IRAS may ask for an explanation if the taxable income reported in Form C-S/C differs significantly from the taxable income reported in ECI.
Please be advised that in Singapore, directors may be fined for failure to file their tax returns punctually.
Submitting Individual Tax Returns
Who Is Required to File Individual Tax Returns?
- If you possess a Resident, Employment, PEP, or Entrepass card
- If you earn more than $22,000 in Singapore each year
- Regardless of the amount of your annual income from the previous year, you must file personal income tax if you have received a letter from the Inland Revenue Authority of Singapore inviting you to do so.
Employer Obligation to Pay Personal Taxes
Form IR8A, which details compensation and benefits-in-kind for the previous calendar year, must be completed and distributed by employers to employees by 1 March of each year.
The Year of Assessment (YA)
The income of Singaporean corporations is assessed and taxed the year after the financial year in which it was earned; this year is known as the Year of Assessment.
A company’s fiscal year can be determined by selecting any closing period, with December 31 being the most common choice.
To make sure that IRAS is promptly informed about a company’s tax returns for the financial year in question, the ACRA system is directly linked to the IRAS website.
It should be noted that if a company’s fiscal year close spans more than 12 months, it must be declared and taxed as two years at the time of income tax filing.
As an illustration, let’s say the business was founded on August 1, 2020, with a fiscal year-end date of December 31, 2021.
You must declare your company’s income based on the two tax years listed below when filing your Singapore tax return for the fiscal year from 1 August 2020 to 31 December 2021:
- The fiscal year from 1 August 2020 to 31 December 2020 is included in the 2021 tax year.
- The fiscal year from January 1, 2021, through December 31, 2021, is included in the 2022 tax year.
The Notice of Assessment is a very significant document that you must adhere to when it comes to paying your income taxes in Singapore. It turns out that for processing taxes, IRAS sends income NOAs to both individuals and corporations.
This article has now described what the income tax Notice of Assessment entails and then gone on to walk you through the application process and the details of the resulting document to help you understand what is subsequently expected of you. It is now your responsibility to make sure you file your tax returns on time to avoid penalties.