Corporate Tax Compliance in Singapore
(Almost) everything you need to know!
Here is our guide on the tax system, rates and incentives behind Corporate Tax Compliance in Singapore. Please feel free to reach out if you have further queries.
Singapore has a single-tier corporate income tax system.
What does this mean?
The headline tax rate
Singapore has steadily reduced its headline tax rate by almost 10% over the past decade. From 2010 onwards, the corporate tax rate has settled at a flat 17%, marking the city-state out as an attractive investment destination.
That headline number isn’t always an accurate indication of the effective corporate tax rate, and after exemptions and incentives are applied, the effective rate can actually be much lower.
General tax exemptions & incentives currently available to tax resident companies in Singapore
From YA2020 onwards, the tax exemptions for newly incorporated companies in the first three consecutive YAs are as follows:
A 75% exemption on the first S$100,000 of normal chargeable income
Newly incorporated companies will be exempt from 75% of corporate income tax on the first S$100,000 of taxable income for each of the first three tax filing years if the company:
- is incorporated in Singapore
- is a tax resident in Singapore
- has no more than 20 shareholders, of which at least one is an individual shareholder holding at least 10% of shares
A further 50% exemption on the next S$100,000 of taxable income
Newly incorporated companies will also be eligible for a 50% exemption (an 8.5% tax rate) on the next S$100,000 of taxable income per year.
Once these exemptions are applied to the taxable income, the effective income tax rate for small and medium-sized companies is significantly reduce
Industry-specific and special purpose tax incentives
In addition to the general tax exemptions and incentives, the Singapore Income Tax Act offers a number of industry-specific and special purpose incentives, and concessionary tax rates.
Singapore Corporate Income Tax FAQs
Q. What is a tax resident company?
In general, a company is considered a tax resident if the management and control of the business is handled in Singapore. This includes consideration of matters such as where board meetings and strategic decisions on company policy are made. However, it’s also important to consider broader factors, such as where the economic substance of the business is.
Q. What is a tax treaty?
A tax treaty exists between two countries to specify how any income earned will be taxed by the authorities of the respective countries when a company does business in both. The benefit of a tax treaty is that helps businesses avoid double taxation.
Singapore has tax treaties with over 80 countries, and the list is growing. This is a reflection of Singapore’s ongoing effort to make the city-state as attractive as possible for cross-border trade and investment.
Important Dates & Deadlines
Income tax basis period
- Corporate income tax is assessed on a preceding year basis in Singapore. This means that, for example, you would file your 2019 corporate tax returns for your company’s financial year that had ended anytime between January 1, 2018 and December 31, 2018.
Income tax filing due date
- The due date for corporate tax filing for Singapore companies is 30 November (hard copies) and 15 December (online).
Get in step with your Corporate Taxes!
Corporate tax compliance in Singapore can appear complicated – but it doesn’t need to be.
We can help you make the most of doing business in this fast-paced city, making sure your business is structured correctly, your liabilities are minimised and that you never miss a deadline.
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