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An Overview of Singapore Corporate Tax

Last modified: July 2, 2018
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Singapore corporate tax is undoubtedly an attribute that makes the nation as an ideal place for trade and commerce for most of the international business communities. The headline corporate income tax rate of the country is 17%, which is one of the lowest in the world. The low tax rates and a series of tax incentives of the Singapore taxation are the two things that continue to endear Singapore to foreign investors.

Corporate Income Tax Singapore at a glance:

  • The headline corporate income tax rates are capped at flat 17%.
  • Absence of capital gain tax
  • Single tier tax system with no dividend withholding tax
  • No tax on foreign sourced income
  • Full tax exemption schemes for newly startup companies
  • Partial tax exemption for corporate
  • No restriction on foreign currency
  • Wide network of double tax agreements
  • Availability of various tax incentives for tax residents

Key Facts of Singapore Corporate Tax System:

  • Single tier Tax System: Single tier corporate tax system was introduced in 2003 in Singapore. As per the system, there is no double taxation for shareholders. Tax paid by a company on its taxable income is final and dividends earned by the shareholders are exempt from further taxation.
  • Absence of Capital gain Tax: There is no tax rule for capital gain or inheritance asset in Singapore.
  • Full Tax Exemption Scheme: The Singapore company tax is 0% for newly start-up companies on the first S$100,000 taxable income for three consecutive years. To avail this incentive, the company must meet conditions such as the company was incorporate in Singapore and is a tax resident of the nation and it has no more than 20 shareholders of which one is an individual shareholder holding at least 10% of the share.
  • Partial Tax Exemption Scheme: The partial tax exemption scheme applies to all Singapore resident companies except the companies eligible for full tax exemption. The companies can pay 8.5% tax rate on taxable annual income of up to S$300,000. For income above S$300,000, the tax rate is 17%.

Due Date for filing Company Tax Singapore:

Corporate income tax filing due date for Singapore companies starting year 2009 is 30 November of every YA. In Singapore, corporate tax is assessed on a preceding year basis. For filing corporate income tax Singapore, the company has to file a complete set of Form C or Form C-C (whichever is applicable), audited/unaudited accounts and tax computation.

Like many other jurisdictions, company tax Singapore is a complex issue. The country is often cited as an example for consistently reducing headline corporate tax rates (25.5% in 2001, 22% in 2003, 20% in 2005 and so on) to attract global investments.  Apart from the changes in headline tax rates and laws, the country has been constantly tying up with double taxation treaties of many countries which may affect the tax money that you may owe to pay. Therefore, it is highly recommended to appoint a professional tax consultant to help you out in this concern.

If you are interested in learning more about Singapore corporate tax, kindly send us an email at info@sbsgroup.com.sg or simply give us a call on +65 6536 0036.

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