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Guide to Singapore Taxes for companies

Effective Tax rate for the newly incorporated companies

(1-3 years after incorporation):

Taxable income? SGD

Tax rate

10.001 - 300.000

8.50%

0 - 10.000 

0%

300.001 and above

17%

Effective Tax rate for all companies

(older than 3 years):

Taxable income? SGD

Tax rate

10.001 - 300.000

8.50%

0 - 10.000 

4.25%

300.001 and above

17%

Singapore Tax System

Singapore imposes tax on Singapore sourced income and income remitted into Singapore. It is known as territorial basis of taxation. Some may call it a modified territorial basis because Singapore still imposes tax on remittance (i.e. income sourced overseas remitted into Singapore). A pure territorial basis like Hong Kong does not tax on overseas income remitted into the country.

With effect from 1 January 2014, income of an individual remitted into Singapore in his personal capacity is no longer taxable. However, it will be taxable if it is remitted into a partnership or a company in Singapore.

Single-tier income tax system

Since January 1, 2003, Singapore has adopted a single-tier corporate income tax system, which means there is no double-taxation for stakeholders. Tax paid by a company on its chargeable income is the final tax and all dividends paid by a company to its shareholders are exempted from further taxation.There is no tax on capital gains in Singapore. Examples of capitals gains include gains on sale of fixed assets, gains on foreign exchange on capital transactions, etc.

 

Corporate income tax rates and general tax exemptions
 
Headline Tax Rate

Singapore’s headline corporate tax rate is a flat 17%.

Headline income tax rate in Singapore as in many other jurisdictions does not necessarily provide an accurate indication of effective corporate tax rate. The effective rate is normally lower than the headline tax rate due to applicable tax exemptions and tax incentives, depreciation rules, etc.

General Tax Incentives

Listed below are general tax exemptions/incentives currently available to Singapore tax resident companies. Once these tax exemptions are applied to the taxable income, the effective income tax rate for small-to-midsize Singapore companies is reduced significantly.

All Singapore resident companies are eligible for partial tax exemption which effectively translates to about 8.5% tax rate on taxable income of up to S$300,000 per annum. The taxable income above S$300,000 will be charged at the normal headline corporate tax rate of 17%.

Currently there are 2 different tax regimes: for newly incorporated companies within first 3 years after incorporation and all other companies - please refer to the tables above.

 

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