How to file zero income tax return

Yes, filing for tax returns of any type is required as long as those tax forms are written on your BIR Certificate of Registration. Regardless of the company's activities, you have to file for it and correctly represent the calculation to the BIR. If a company doesn't have any sales or expenses because they are starting up or they are in their dormant years, they still need to file for a NIL return and tell BIR.

I’ve just registered my business and don’t have any sales yet. Do I have to file for a return right away?

• Yes, once the BIR issues your Certificate of Registration (COR – BIR Form 2303), you will be required to regularly file and pay all the necessary tax returns based on your type of tax and registration. Whether you are already earning, operating, or not, is out of context.

How do I fill up a nil return online?

• Filing a nil return is no different from filing a regular tax form.

1. Enter your income details and deductions. Once the income tax is calculated, it will show that you have no tax due. For those businesses that have zero activities, no sales, no purchases or expenses, you still need to file a blank return to the BIR.

2. Submit your return to the BIR to complete the e-filing process. Learn more about e-filing & payment in:

   • Plus

   • Fast File

What are Zero or Nil Returns?

• Nil returns are tax returns populated and submitted to the bureau to show that there is no tax payable or any activity during a certain tax period.

  You must file a sales tax return every filing period, even if no sales are made and no tax has been collected. Failure to file will result in the Department filing a return on your behalf and estimating the amount to be billed. These estimated returns will be due and payable until an actual return is filed. If you no longer need your sales tax account (license), close your sales tax account after you have filed your final return(s).

  How to File a Zero Return

  To file your zero sales tax return through Revenue Online, follow these steps: 

  1. Log in to your Revenue Online account. 
  2. Your homepage will have a list of accounts and account actions. 
  3. To file for the period currently due, click "File Return" on your sales tax account. 
     • Note: to file older returns or to amend a return, under the sales tax account click on "File/Amend and View Returns/Payments" and click on the period that you need to file or amend. 
  4. Once the “Retail Sales Return” is open, you can begin filing your zero return.
  5. Physical Locations:
     • Open the site by clicking the “Location ID,” once the site is open, mark the "Check this box to verify Gross Sales is $0.00" box, then click “OK” to exit the site.
     • All physical location sites must be clicked on and opened completely to file a zero return. 
     • Physical locations are identified by the red caution symbol (exclamation point in a circle) on the far left of the screen. 
  6. Non-Physical Locations:
     • Zero returns are filed for non-physical sites by clicking the "File remaining non-physical sites as $0 returns" button.
     • Non-physical locations do not need to be clicked on individually to file a zero return. 
     • Non-physical locations are identified with a blue edit icon (looks like a pencil).  
  7. Verify that the “Filed” box on the far right of the screen contains a check mark for all sites then click “Next”. 
  8. Click “Next” on the “Return Summary” and “Special District Sales DR0200” screens.
  9. On the “Confirm Return” screen, read the information on the screen, check the box for “I agree,” click “Submit” then enter your Revenue Online password. 

  How-To Video

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  How to File a Zero Return Using Revenue Online

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  Individuals resident in Singapore are taxed on a progressive resident tax rate as listed below. Filing of personal tax return for tax resident is mandatory if your annual income is S$20,000 or more. Tax residents do not need to pay tax if your annual income is less than S$20,000. However, you may still need to file a tax return if you have been informed by Singapore tax authority to submit your tax return. Note that additional earned income relief is also given to further reduce the tax payable depending on age. 

  Resident Tax Rates

   Chargeable IncomeRate (%)Gross Tax Payable ($)

  On the first 20,000

  On the next 10,000

  0

  2

  0

  200

  On the first 30,000

  On the next 10,000

  -

  3.50

  200

  350

  On the first 40,000

  On the next 40,000

  -

  7

  550

  2,800

  On the first 80,000

  On the next 40,000

  -

  11.5

  3,350

  4,600

  On the first 120,000

  On the next 40,000

  -

  15

  7,950

  6,000

  On the first 160,000

  On the next 40,000

  -

  18

  13,950

  7,200

  On the first 200,000

  On the next 40,000

  -

  19

  21,150

  7,600

  On the first 240,000

  On the next 40,000

  -

  19.5

  28,750

  7,800

  On the first 280,000

  On the next 40,000

  -

  20

  36,550

  8,000

  On the first 320,000

  In excess of 320,000

  -

  22

  44,550

  Non Resident Tax Rates 

  Type of IncomeNon-resident individual tax rate / withholding tax rate from YA 2017

  Director's remuneration

  22%

  Income derived from activity as a non-resident professional (consultant, trainer, coach, etc.)

  15% of gross income or 22% of net income

  Income derived from activity as a non-resident professional (consultant, trainer, coach, etc.)

  10% concessionary rate (No change)Other income e.g. rental income derived from a Singapore property22%

  SRS withdrawal by a non-citizen SRS member

  22%

  Interest, royalty etc.

  Reduced final withholding tax rate (subject to conditions) as follows:
  Interest: 15%
  Royalty: 10%
  
  OR
  
  22% if reduced final withholding tax rate is not applicable.

  Pension22%

   Source: IRAS

  Different income tax rules apply in Singapore depending on the tax residency status of the individual.

  Tax residents pay taxes on their chargeable income as per the resident tax rate table above. The chargeable income (i.e. income subject to taxation) for tax residents is determined as below:
  
  

  
  
  
  Whereas

  Total income means

  • gains or profits from carrying on any business, trade, profession or vocation either as a sole proprietor or partner in a partnership
  • gains or profits from any employment
  • dividends, interests, investment income
  • rents, royalties, premiums and other profits arising from properties
  • exclude qualified income earned overseas (more details provided later in the guide).

  Expenses means

  • qualified employment related expenses
  • qualified rental related expenses

  Donations means

  • donations to qualified charitable organisations

  Personal Reliefs means

  • special personal reliefs such as eligible course fees, earned income relief, parent relief, etc.

  Chargeable income is this adjusted income after deductions from the total income (as shown in the picture above).

  Filing your tax return is a yearly obligation for every eligible taxpayer. All completed forms must be submitted to Singapore tax authority by the 15th of April.
  
  You do not need to pay tax if your annual income (applicable for tax residents only) is less than S$22,000. However, you may still need to file returns if you have been informed by tax authority to submit your tax form. Even if you do not have any income in previous years, you still need to declare zero income in your tax form and submit by 15 April (paper) or 18 April (e-filing). It is compulsory for you to file tax returns if your annual income is S$22,000 or more.
  
  You can choose to file your returns online or by mail. IRAS will send you the appropriate paper tax form, upon request, the online form will be available from 1 March every year.

  • For tax resident individuals – Form B1
  • For self-employed – Form B
  • For non-resident individuals – Form M

  You will be subject to penalties for late filing or not filing. IRAS might also take legal actions against the individual for non-filing of tax return or non-payment of the tax.
  
  After you have filed your returns, you will receive your Notice of Assessment or tax bill in May to September. The tax bill will indicate the amount of tax you have to pay. If you disagree with your tax amount, you need to inform the Singapore tax authority within 30 days from the date of your tax bill and state your reasons for objection.
  
  You need to pay the full amount of tax within 30 days of receiving your Notice of Assessment. This is regardless of whether you have informed tax authority about your objection. If your tax remains outstanding after 30 days, penalties will be imposed.

  All gains and profits derived by you in respect of your employment are taxable, unless they are specifically exempt from income tax or are covered by an existing administrative concession. The gains or profits include all benefits, whether in money or otherwise, paid or granted to you in respect of employment. Examples of taxable benefits received from your employer:

  • Car provided by employer
  • Reimbursements of medical and dental treatments for dependants other than yourself, your spouse and children
  • Overtime payments
  • Per diem allowances (daily allowance given to employees on overseas trips, out of Singapore, for business purposes), provided the amount is in excess of acceptable rates
  • Fixed monthly allowance for transport or if mileage on private cars are reimbursed
  • Fixed monthly meal allowance

  Note however that some of the non-cash benefits (e.g. accommodations) are taxed using special formulas resulting into a lower taxation on these benefits-in-kind. Thus, a properly structured compensation package (i.e. salary plus benefits in kind) for the executives can help reduce their individual tax liability in Singapore. Further details on this are outside the scope of this guide.

  How do I file a zero tax return?

  Filing a nil ITR does not require a special request. The procedure is the same as filing a regular ITR. You can file a nil ITR online through e-filing. Before you begin, keep the following details ready - PAN, Aadhaar, Bank Account and Salary details, Form 16 and Investment details (if any).

  Can you file IT return for zero income?

  Filing a NIL income tax return is not mandatory if your total income is below the basic exemption limit as per the income tax act. But it is always recommended that you file an ITR if there is any source of income earned by you in a financial year.