Corporate income tax

Under the modified territorial basis of taxation, companies in Singapore are subject to tax on income accruing in or derived from Singapore and foreign income received or deemed received in Singapore from outside Singapore.

  • Rate
    Rate
    17%
  • ECI filing deadline
    ECI filing deadline
    Within 3 months after financial year end
  • Tax return/computation/ (un)audited accounts deadline
    Tax return/computation/ (un)audited accounts deadline
    30 November

Payment due date

Tax assessed has to be paid within 30 days from the date of the Notice of Assessment unless the Company has been allowed to pay the tax by instalment. The instalment payment plan is generally allowed only for the payment of tax assessed on an Estimated Chargeable income (ECI).

Corporate income tax rebate

YA2019 - 20% of tax payable, capped at $10,000

YA2020 - 25% of tax payable, capped at $15,000

YA2021 - NIL

YA2022 - NIL

Partial tax exemption from Year of Assessment (YA) 2020

Both resident and non-resident companies are subject to tax at the corporate tax rate after tax exemptions as follows:

First $10,000 of chargeable income is 75% exempt - $7,500

Next $190,000 of chargeable income is 50% exempt - $95,000

Up to - $102,500

 

The exemption scheme does not apply to:

  • income that is subject to tax at concessionary tax rates; and
  • income earned by a non-resident company that is subject to a final withholding tax.
Full tax exemption for new start-up companies

Qualifying start-up companies are granted tax exemptions for their normal chargeable income for their first three consecutive YAs. Where any of the first 3 YAs falls in or after YA2020:

First $100,000 of chargeable income is 75% exempt - $75,000

Next $100,000 of chargeable income is 50% exempt - $50,000

Up to - $125,000

 

The conditions to qualify for the start-up exemption are that the company must be Singapore incorporated and be a Singapore tax resident with no more than 20 shareholders where all shareholders are individuals or, at least one of the shareholders must be an individual who beneficially and directly owns at least 10% of the total number of issued ordinary shares.

Property developers and investment holding companies do not qualify for the start-up exemption.

Group relief

Under the group relief system, Singapore companies within the same group (the Group) are allowed to transfer current year tax losses, unabsorbed capital allowances and unabsorbed donations to another company in the same group. A group consists of a Singapore incorporated parent company and all its qualifying Singapore incorporated companies.

Singapore’s excellent strategic location and globalised economy make it an attractive business hub for organisations looking to build their presence in Southeast Asia and Asia-Pacific.

If you are planning on doing business in Singapore, knowledge of the investment environment and information on legal, accounting and taxation framework are essential to keep you on the right track.

This guide will provide you with insights into the key aspects of investing and undertaking business in Singapore. It makes reference to some of the most common issues companies might face when expanding into the city-state.

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