Tax Rates and Exemptions for Companies
A company qualifies for taxation in Singapore if
its business entity is incorporated or registered under the Companies Act or any law in force in Singapore.
a foreign company registered in Singapore such as a branch
a foreign company incorporated or registered outside Singapore
Singapore adopts a one-tier corporate tax system under which tax paid by a company on its chargeable income is the final tax. All dividends paid by a company are exempt from tax in the hands of the shareholders.
A company is taxed at a flat rate of 17% (2010) on its chargeable
income accruing in or derived from Singapore
income received in Singapore from outside Singapore
gains or profits from any trade or business
income from investment such as dividends, interest and rental
royalties, premiums and any other profits from property
other gains of an income nature
Capital gain such as gains on sale of fixed assets or gains on foreign exchange on capital transactions is not taxable.
Some Income such as foreign-sourced dividends, branch profits & service income received by a resident company that satisfies the qualifying conditions may be exempted from tax under the provisions of the Singapore Income Tax Act.
For further information see IRAS.
Productivity and Innovation Credit
Industrial building allowance
Land intensification allowance
Unutilised losses, capital allowances and donations
Loss carry-back relief
Tax Exemption Schemes
Effective from YA 2008, a partial tax exemption is given to companies on normal chargeable income (excluding Singapore franked dividends) of up to $300,000 as follows:
First $ 10,000 @ 75% = $ 7,500
Next $290,000 @ 50% = $145,000
Total $300,000 $152,500
Tax exemption scheme for new start-up companies
A qualifying company can claim
for full tax exemption on the first $100,000 of normal chargeable income (excluding Singapore franked dividends) for its first three consecutive YA.
a further 50% exemption is given on the next $200,000 on a qualifying company's normal chargeable income (excluding Singapore franked dividends).
First $100,000 @ 100% = $100,000
Next $200,000 @ 50% = $100,000
Total $300,000 $200,000
How to qualify for the start-up exemption
be incorporated in Singapore
be a tax resident in Singapore for that YA
have no more than 20 shareholders throughout the basis period for that YA where
all of the shareholders are individuals beneficially and directly holding the shares in their own names; OR
at least one shareholder is an individual beneficially and directly holding at least 10% of the issued ordinary shares of the company.
For companies with December financial year end the basis period for each YA is the preceding calendar year ended 31 December.
Companies with non-December financial year end the basis period for each YA is the preceding accounting year ended 30 June.
Each company has to furnish an estimate of its chargeable income known as Estimated Chargeable Income (ECI) within three months from the end of its accounting period.
Furthermore, each company is required to declare its income by completing an Income Tax Form for companies, known as Form C, each year. The due date for filing of Form C for each YA is 30 Nov of each year.
Download IRAS "Essential Information for Newly Incorporated Companies" for further info.
Proper records of its financial transactions and retain the source documents, accounting records and schedules, bank statements and any other records of transactions connected with your business must be maintained and a company must retain the records for a period of five years from the relevant YA.