This post is also available in: zh-hans简体中文 (Chinese (Simplified))

Singapore Corporate Income Tax Rate

Singapore is blessed with its booming economy as well as its strategic position as the top-notch financial hub. When talked about the vibrant business environment in Singapore, its corporate tax rates often make the list. The effective tax rates including various tax incentives as well as reduced corporate income tax rates in Singapore has contributed to the reason that attract foreign investments into the country.

 

Singapore Corporate Income Tax Rate at a Glance

In Singapore, its corporate income tax has a single-tier territorial based flat-rate corporate income tax system. There is no double-taxation for stakeholders under the single-tier corporate income tax system – no further Singapore taxation imposed on dividends paid by a company to its shareholders. In addition, there is no tax on capital gains in Singapore (gains on sale of fixed assets, gains on foreign exchange on capital transactions and so on are some of the examples of capital gains). Now, let us dive in to know more about the attractive tax rates.

 

Corporate Income Tax Rates and General Tax Exemptions

Corporate Tax Rates:

With effect from Year of Assessment 2010, a company in Singapore is taxed at a flat rate of 17% on its chargeable income regardless of whether it is a local or foreign company.

 

Year of Assessment (YA) Tax Rate
From 2010 17%
2008 to 2009 18%
2005 to 2007 20%

 

General Tax Incentives

Although the corporate tax rate is flat at 17%, there are tax exemption schemes available for companies which help to lower the overall effective corporate tax rate.

 

Tax Exemption Scheme for New Start-up Companies

Any newly incorporated company that meets the conditions (as stated below) will have the privilege to enjoy the tax exemption for new start-up companies for each of the first three years of tax assessment. The qualifying conditions are as follow:

  • be incorporated in Singapore
  • be tax resident in Singapore
  • possesses not more than 20 shareholders with at least one of the shareholders being an individual shareholder holding at least 10% of ordinary shares.

The tax exemption is open to all new companies except these two types of companies:

  • A company whose principal activity is that of investment holding; and
  • A company which undertakes property development for sale, for investment, or for both investment and sale.

 

BEFORE YA 2020

Chargeable income Effective Tax Rate
First $100,000 0%
Next $200,000 8.5%
Thereafter  17%

 

YA 2020 ONWARDS

Chargeable income Effective Tax Rate
First $100,000 4.25 %
Next $100,000 8.5%
Thereafter 17%

 

Partial Tax Exemption for Companies

Companies in their 4th tax assessment year onwards and all other companies will have the privilege to enjoy partial tax exemption indefinitely.

 

BEFORE YA 2020

Chargeable income Effective Tax Rate
First $10,000 4.25%
Next $290,000 8.5%
Thereafter 17%

 

YA 2020 ONWARDS

Chargeable income Effective Tax Rate
First $10,000 4.25%
Next $190,000 8.5%
Thereafter 17%

 

One-off Corporate Income Tax (CIT) Rebate

Every Singapore company will be eligible for CIT rebates according to the Singapore Budget announcements.

Below are the applicable CIT rebates for the various tax assessment years:

Year of Assessment (YA) Corporate Income Tax Rebate Capped at
2019 20% $10,000
2018 40% $15,000
2017 50% $25,000
2016 50% $20,000
2013 to 2015 30% $30,000

 
If you have any questions about  corporate income tax services or if you are unsure of how the corporate income tax is computed, feel free to contact us and let our professional team help you!