Singapore Tax Authority (IRAS) helps to develop a stronger community, a better environment and a more vibrant economy. Singapore attracts more investments from all over the world by reducing its corporate income tax rate and introducing different types of tax incentives. Thus, Singapore corporate tax rate is one of the lowest in the world, with the current rate being 17%.
The first YA refers to the YA relating to the basis period during which the company was incorporated.
From the fourth YA onwards, your company will be given partial tax exemption instead of the exempt amount for new start-up companies.
In Singapore, the statutory Income for the Year of assessment is computed based on the income derived in the preceding calendar year (known as the basis year) from all sources.
Income tax filing due date for Singapore companies starting year 2009 is November 30.
The company has to file a complete set of returns including Form C, audited/unaudited accounts, and tax computation.
As the filing due date has been extended to 30 Nov of each year, companies have at least 11 months to file their tax returns. All companies are required to file their returns by the due date. Please submit the tax returns by the due date to avoid enforcement actions such as composition or summons issued to the company.
Singapore has introduced a single-tier corporate income tax system since January 1, 2003. Tax paid by a company on its chargeable income is the final tax and all dividends paid by a company to its shareholders are tax free.
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.
A company is regarded as resident in Singapore for tax purposes if its management and control are exercised in Singapore. In other words, the place where the directors of a company manage and control its business and hold their board meetings is the place where the company is deemed resident.
The question of whether or not a company is tax resident in Singapore is significant for a number of purposes, including:-
A double taxation occurs where an income is taxed twice, that is, first at the source where it is generated and for a second time where it is received. In order to avoid such double taxation of income, Double taxation Agreements (DTA) are concluded between countries. Under a DTA, the country of residence would usually agree to either give credit to its residents for income which is taxed at reduced rates, or exempt such income from tax.
The main benefit and objective of a income tax treaty is to help businesses avoid double taxation of their income.
Singapore has concluded tax treaties with many countries and the list continues to grow. The treaties reflect Singapore's continual efforts to help businesses in relieving double taxation and to encourage and facilitate the trade and investment opportunities across-borders.
A company is taxed at a flat rate on its chargeable income regardless of whether it is a local or foreign company.
The tax rates and tax exemption / rebate for each Year of Assessment (YA) are as follows:
|Year of Assessment(YA)||Tax Rate||Tax Exemption/Rebate|
Full tax exemption and Partial tax exemption scheme for new start-up companies for the first 3 years of assessment.
After the first 3 years, Companies will continue to enjoy the partial tax exemption scheme.
In addition, with effect from YA 2010, the tax exemption scheme for new start-up companies will be extended to include companies limited by guarantee, subject to the same conditions.
Under this scheme, a newly incorporated company that satisfies the qualifying conditions can claim for full tax exemption on the first $100,000 of normal chargeable income* (excluding Singapore franked dividends) for each of its first three consecutive YAs.
|Year of Assessment(YA)||Exempt amount for new start-up companies|
2005 to 2007
First $100,000 Profits @ 100% (Tax Free) = $100,000
First $100,000 Profits @ 100%(Tax Free)= $100,000
To qualify for the tax exemption for new start-up companies, your company must:
* A company is resident in Singapore if the control and management of its business is exercised in Singapore.
** With effect from YA 2010, the scheme will be extended to companies limited by guarantee, subject to the same conditions imposed on companies limited by shares.
All business decisions today have tax implications, and it is important for a company to manage their income tax requirement efficiently. Our tax professionals will keep you abreast of developments that may affect your business. We collaborate closely with you to identify and implement tax strategies that work best within your organization.
We can also assist you in structuring your executives; remuneration packages that will offer both your company and your staff the maximum tax benefits. For individuals and family held enterprises, we can help you in organizing your financial affairs in the most tax efficient manner.