Everyone wants to heave a sigh of relief once they file their tax return. But that’s the beginning of the tax evaluation process. A Notice of Assessment is the final destination of your journey. It’s the result you expect once you submit your estimated chargeable income (ECI).
The process consists of evaluating your income, tax, and pending payments. They help to arrive at this comprehensive statement. This document contains information about tax refund tax credits and paid income tax. So this guide includes relevant information about NOA. It also discusses why it’s important, who can access it, and how everyone can get a copy.
What Is a Notice of Assessment (NOA)?
A Notice of Assessment is the annual statement drafted and sent by the Inland Revenue Authority of Singapore (IRAS). It serves as a document to acknowledge your tax return. The document is an official receipt to confirm that an individual is clear of tax returns. After you share your chargeable income with the agency, it’s issued to you, and they review it.
It contains information related to your tax. So, you’ll be able to see your chargeable income and changes made by the IRAS. It’s a crucial document because it is an official reference to your tax revenue status. It also helps you keep track of all potential problems that might affect you or your business.
The Importance of NOA
This document remains one of the most important for a business or firm. It provides details about your tax revenue. It also alerts you about potential threats. Thereby preventing severe consequences that arise if you don’t attend to them.
Once you receive a notification, you’ll know exactly how much tax you owe and if you have any refund. The tax summary is a product of the tax details you provide. But you can always expect accurate results rather than an individual calculation that is often prone to errors.
Types Of Notice of Assessment (NOA)
Notices of Assessment generally serve one purpose; act as a receipt for your tax returns. But there are times when the issuer has to send them for different reasons. So, you can get different documents based on your chargeable income. It can also be due to changes in the taxing year and previous years.
It usually depends on when you file your Estimated Chargeable Income (ECI). Or what verification stage you are at. So, you’ll receive different documents for different reasons, as explained below:
NOA Type 1
This is the first type you can receive. It’s a document that details your tax summary after you’ve filed your ECI. It’s the best type you can receive because it means you follow the law and are ready to settle your tax. So, when you send an estimated chargeable income you or your business makes in a year, you’ll receive Type 1 as a response from the agency.
Type 1s are not sent to you by default from the agency.
Instead, you’ll have to send an assessable document containing your tax information. Then the agency processes your data and calculates the tax you owe. So, although receiving the other types does not result in any penalty, it’s better for you to always receive a Type 1.
NOA Type 2
Type 2 is the follow-up reminder you get when you defect the first type. It means you’ll receive this from the IRAS if you cannot file your company’s ECI within three months before the financial year runs out. You won’t receive any extra charges or penalties when you receive this. But it’s recommended to refrain from receiving this type of statement by filing your ECI earlier and receiving the Type 1 instead.
NOA Type 3
You receive this statement when your company files Form C and Form C-S. It’s like the first type, but the difference is in the kind of detail provided.
Form C and Form C-S are the corporate income tax return used by firms and companies. The help declares their actual income for a particular year. All companies can file a Form C with no restriction. But only Singapore-incorporated companies with annual income below or equal to $5 million can file Form C-S.
NOA Type 4
This is the final statement you receive when assessing your tax returns. You’ll receive this once IRAS considers your company’s chargeable income. Your accompanying payable tax amounts must also be evaluated. This form contains all the necessary information for an Assessment Notice and is considered the ultimate assessment notice you can receive.
|NOA Type||What It Contains||When Issued|
|Type 1||Estimated chargeable income, Tax Summary||After filling ECI|
|Type 2||Same as Type 1||Failure to file ECI after 3 months of notice|
|Type 3||Actual income for a taxable year||After filing Form C and C-S|
|Type 4||All the content of an NOA||Final Assessment|
What a Notice Of Assessment Contains
Although the content will always vary for companies and individuals, the format is usually the same. There is some essential part of the document you will always find in every assessment. While others are optional and only available for certain companies.
Kindly note that the information available on your issued statement is those found applicable to you. You can file a complaint if there is a missing section in your statement. Check out the content of a typical chargeable income verification below:
An account summary is the most noticeable content on the document. It’s a box positioned right at the top of the page. This box indicates tax amount, zero remainder, and tax refunds. But first, it provides a summary of your tax account. This means you’ll be able to see details of how much tax you owe, including the date you must make payment to avoid extra charges.
The zero remainders denote that you owe the agency nothing and will receive nothing. Lastly, the tax refund represents the figure you’ll receive as a refund on your current or previous payments. Each of these figures will be indicated within the box at the top of the document so it’s possible to see them.
Tax Assessment Summary
This section also contains important data. First, there is general information about your income amount. Most times, it’s a collation of data from anyone who receives Type 1. Otherwise, it displays the data used in your tax assessment. These are your income, credit, and deductions.
It carries information about extra charges you’ve incurred. It contains penalties and interest added to your refund. If you couldn’t make payments the previous year and have a due balance, you’d be able to see them in this section. It’s added to the document for more information that can save your company from penalties. It can help keep track of any pending payments in your account too.
Explanation of Changes And Other Important Information
Sometimes, your tax filing can be outdated or filled with errors. That’s why this section is also essential. It details all the necessary changes the agency makes to your tax returns.
For example, there might be adjustments to make to your income. So the section contains the correct income value compared to your submission.
You’ll find your credit limit under this section. However, that’s if you’re over 25 and below 65. This amount denotes the total refundable credit you can access in the future. Sometimes, it can include notifications about your eligibility for certain credits. Summarily, if you expect any miscellaneous information not available in other sections, this is the area you should check.
RRSP Deduction Limit Statement
RRSP is an acronym for Registered Retirement Savings Plan. So, the received statement bears information about the limit your RRSP can take. For instance, receiving the document under an RRSP will give you insights. So, you know the maximum contributions you can make to your RRSP the following year.
The calculated amount is the maximum tax amount in that year. It’s also 18% of income accrued the previous year. You can claim your contributions from the tax return and postpone the RRSP deduction for another year. So this information allows you to make deductions from some transfers into your RRSP account. As long as you are eligible, you’ll be able to make these transfers without affecting your deduction limits.
Home Buyers’ Plan Statement (Optionally)
This document section allows you to make extra withdrawals from your RRSPs. As the term implies, it’s designed for consumers who want to build their homes. So, you have access to tens of thousands of dollars annually to build yourself or a disabled relative a home. This statement, therefore, reflects the amount of money you are yet to pay. It also shows the minimum payment you need for the coming year.
Lifelong Learning Plan Statement (Optionally)
Like the Home Buyers’ Plan statement, it’s not compulsorily available on your issued statement. It will only be available when you are in the LLP program. When you have this on your tax gain report, it shows your eligibility for the program.
For example, you’ll be able to withdraw up to $20,000 from your account to pay for your or your spouse’s education or training. The statement sections, therefore, contain information about your pending LLP balance. This section will contain the minimum amount you must pay for the following year.
How to Obtain a Copy of the NOA
Depending on which medium you apply with, you’ll be able to access the document in both hardcopy and softcopy. You can sign up for it through your account online and receive a soft copy. To do this, visit the IRAS myTax portal and log in to your account. Then, request the document and submit the necessary data. The softcopy is usually instant but can take a couple of minutes to be generated.
Otherwise, you can print the form and mail it to get a hardcopy delivery to your address (preferred mainly by companies). Once you send your request, the response usually takes between 1 to 4 weeks, depending on your location. If you request a hard copy and have an active account, you can check the account or your mail to see the soft copy before you receive the hard copy.
A Notice of Assessment (NOA) is the ultimate document issued to taxpayers. It provides every necessary information about income and tax. It’s also a good way for businesses and individuals to assess their financial situations. Other than this, it can also be of great help to people building their homes or paying college fees.
So summarily, this important document lets you know how much income tax you should pay. It adds all the necessary tax information you need to make your financial decisions.