IRAS Updates Tax Computation Guidance - What SME Owners Need to Know
On 7 September 2026, IRAS updated its guidance on preparing a tax computation for corporate income tax filing. It's not the flashiest update, but it touches something every company in Singapore has to do annually.
What a tax computation actually is
A tax computation is a statement showing the tax adjustments made to your accounting profit to arrive at income chargeable to tax. The adjustments include non-deductible expenses, non-taxable receipts, further deductions, and capital allowances.
Here's the part many SME owners miss. Even if you file Form C-S or Form C-S (Lite) - where you don't submit financial statements with the return - you still must prepare the tax computation and supporting schedules, and have them ready to produce the moment IRAS requests them. Form C filers must submit everything together with the form.
"Ready upon request" is not a formality. IRAS makes these requests, and businesses that can't produce the documents face compliance consequences.
The scenario that trips businesses up: changing your financial year end
If your company changes its financial year end, your basis periods change with it. And depending on how the change falls, you may need to apportion your adjusted profit across two different Years of Assessment.
When is apportionment not required? IRAS gives this example: your FY end changes from 30 Jun 2025 to 31 Dec 2025. The financial statements cover 18 months, but because the change falls within the same YA, you prepare one tax computation for YA 2026 covering 1 Jul 2024 to 31 Dec 2025. No apportionment needed.
When is apportionment required? Your FY end changes from 31 Dec 2025 to 31 Mar 2026. Now the change crosses two YAs. You need two tax computations: one for YA 2026 (basis period 1 Jan 2025 to 31 Dec 2025) and one for YA 2027 (basis period 1 Jan 2026 to 31 Mar 2026).
There's also a procedural wrinkle. Your company needs to write to IRAS via myTax Mail to request a waiver of the YA 2026 Corporate Income Tax Return before the filing due date of 30 Nov 2026. Then both YAs get filed together in the YA 2027 return, due by 30 Nov 2027. For Form C filers, the tax computations, financial statements, and supporting documents for both YAs must all be filed together.
The mechanics: IRAS uses either the direct identification method - matching income and expenses to the corresponding basis period for each YA - or time apportionment where direct identification isn't possible.
Also note: you inform ACRA of the FY end change via BizFile+, not IRAS. IRAS updates its records weekly based on ACRA filings. You don't need to tell them separately.
Two other clarifications in the update
One. SMEs using the new Singapore Financial Reporting Standard for Small Entities (SFRS for SE) can expect minimal tax impact, with exceptions: financial instruments, property, plant and equipment, research and development costs, and borrowing costs. Tax adjustments are still required for those categories.
Two. Companies reporting in a non-SGD functional currency prepare their tax computations in that same currency, but every amount declared on the Corporate Income Tax Return must be in Singapore dollars.
What this means for your business
A change in financial year end sounds administrative. In practice, it rewrites your filing calendar. Two computations. Two basis periods. A waiver request with a deadline. Documents for two years filed together in one submission.
The businesses that handle this cleanly are the ones whose accounting systems track basis periods and adjustment schedules as structured data, so a FY end change flows through the numbers automatically.
OCi System keeps your bookkeeping, tax adjustments, and computation schedules in one platform. When your financial year end changes, your numbers follow. Not the other way around.
Source: IRAS, 7 Sep 2026
https://www.iras.gov.sg/taxes/corporate-income-tax/form-c-s-form-c-s-(lite)-form-c-filing/preparing-a-tax-computation