Estimated Chargeable Income (ECI) is a term used in the context of Singapore’s corporate income tax system. It refers to an estimate of the taxable income that a company expects to generate for a particular financial year. Companies in Singapore are required to file their ECI with the Inland Revenue Authority of Singapore (IRAS) within three months from the end of their financial year.
The ECI serves several purposes:
Provisional Tax Assessment: The ECI allows the IRAS to make a provisional tax assessment based on the estimated taxable income provided by the company. This helps the IRAS calculate the company’s tax liability in advance, facilitating better tax planning and budgeting.
Timely Collection of Taxes: By requiring companies to submit their ECI within a specified timeframe, the IRAS can collect taxes promptly, thereby ensuring the smooth functioning of the tax system.
Compliance and Enforcement: The ECI requirement helps to ensure compliance with tax laws and regulations. It provides the IRAS with relevant information about a company’s expected income, allowing them to monitor tax compliance and take appropriate enforcement actions if necessary.