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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. On top of that, there is no further taxation imposed to tax paid by a company [on its chargeable income] and all 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

0% tax on S$100K taxable income: Any newly incorporated company that meets the conditions (as stated below) will have the privilege to enjoy the corporate income tax rate at 0% on the first S$100,000 taxable income for each of the first three tax filing. The conditions are as the following:

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

 

Tax Exemption Scheme for New Start-up Companies

Chargeable income % exempted from Tax Amount exempted from Tax
First $100,000 @100% =$100,000
Next $200,000 @50% =$100,000
Total $300,000   =$200,000

8.5% tax on taxable income of up-to S$300K: All Singapore resident companies will have the privileges to enjoy partial tax exemption, which effectively translates to about 8.5% tax rate on taxable income of up to S$300,000 per annum (Please note that the taxable income above S$300,000 will be charged at the normal headline corporate tax rate of 17%).

 

Partial Tax Exemption for Companies

Chargeable income % exempted from Tax Amount exempted from Tax
First $10,000 @75% =$7,500
Next $290,000 @50% =$145,000
Total $300,000   =$152,500

 

One-off Corporate Income Tax (CIT) Rebate for YA 2016 & YA 2017

Every Singapore company will be eligible for a corporate income tax rebate according to the Singapore Budget 2016. Singapore companies can claim a one-time 50% corporate income tax rebate on corporate income tax payable for YA 2016 & YA 2017, subject to a cap of S$25,000. On top of that, the CIT rebate will be extended to YA 2018 at a reduced rate of 20% of the corporate tax payable, subject to a cap of $10,000.

 

Year of Assessment (YA) Corporate Income Tax Rebate Capped at
2018 20% $10,000
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 to help you!