Business taxation in Singapore

Single-tier income tax system
Tax paid by a company on its chargeable income is the final tax and all dividends paid to shareholders are exempt from further taxation in Singapore. This prevents double taxation.

There is no tax on capital gains in Singapore, which includes gains realised on the disposal of fixed assets, foreign exchange, capital transactions, etc.

Headline Tax Rate
Singapore’s headline corporate tax rate is a flat 17%. The effective rate is generally lower after the application of tax exemptions and incentives, depreciation rules, etc.

General Tax Incentives
There are general tax exemptions and incentives currently available to Singapore resident to small-to-midsize companies which significantly reduces the effective tax rate.

Zero tax on S$100K taxable income
There will be no income tax on the first S$100,000 (approx. USD70,000) of taxable income for the first three tax filing years, for a newly incorporated company, subject to meeting all the following conditions:

  • incorporated in Singapore;
  • tax resident in Singapore; and
  • no more than 20 shareholders of which at least one is an individual shareholder holding at least 10% of shares.
Furthermore, all Singapore resident companies are eligible for partial tax exemption, which effectively translates to significantly lower effective income tax rate on taxable income  up to S$300,000 (approx. USD210,000) per annum. The taxable income in excess of S$300,000 will be charged at the normal headline corporate tax rate of 17%.

Corporate Income Tax (CIT) Rebate for YA 2016 & YA 2017

Every Singapore Company is eligible for a one-off corporate income tax rebate of 30% on corporate income tax payable for YA 2016 & YA 2017which is subjected to a cap of S$20,000 (approx. USD14,000).
Corporate Income tax filing due date
Corporate income tax filing due date for Singapore companies from 2009 is November 30.
Companies must file a complete set of returns including Form C, audited/unaudited accounts, and tax computation.

Corporate income tax assessment period

Corporate income tax is assessed on a preceding year basis. Thus the basis period for any Year of Assessment (YA) refers to the financial year ending (FYE) in the year preceding the YA. For example, in 2016 a company will file a corporate tax return for the financial year ending between 1 January 2015 to 31 December 2015. 

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