Wbring the World to Singapore, and take Singapore to the World.

HOME Our Services Taxation

Taxation

Singapore has an attractive taxation policy – its corporate and personal tax rates, tax mitigation proceedings, zero tax on capital gains, single-tier tax system, and far-reaching dual tax contracts.

Advantages of Singapore Taxation for Foreign Entrepreneurs

  • Singapore government only taxes profits that are earned or received in Singapore. There is no other tax apart from the one that a company pays on its chargeable income.
  • All other profits or benefits such as capital gains (money from sale of fixed assets and receipts from foreign exchange capital transactions) and dividends received by shareholders are exempt from tax.
  • There is no withholding tax on distributed dividends.
  • New start-up companies in Singapore enjoy 75% exemption on initial $100,000 of their normal taxable income.
  • Besides the first exemption, the subsequent $100,000 of the normal taxable income gets an additional 50% exemption.
  • Singapore’s double tax treaties with various countries helps entrepreneurs in avoiding to pay double taxes on their incomes; when they pay taxes levied by Singapore, they are exempt from those levied by their country of origin on the same income.
  • Companies having Regional Head Quarters or International Head Quarters in Singapore can avail a concessionary tax rate of 15%. They can avail this rebate for 3+2 years on incremental qualifying revenue from overseas.
  • A Singapore resident, or a citizen, or a foreigner with a stay of 183 days or more enjoy a progressive tax rate starting from 0 up to 20% for income above S$320,000.

Corporate Tax Rate

  • Both, native and foreign companies doing business in Singapore must pay taxes on the income, the source of which is in Singapore, as well as on foreign-sourced earnings, payable or considered payable to Singapore.
  • Singapore’s corporate income tax rate is capped at 17%.
  • In addition to this, there is a rebate of 20% on the tax to be paid for the assessment year 2019, which is fixed at SGD 10, 000.

Partial tax exemption (normal income tax rate)

Years of assessment 2018 to 2019
Chargeable
income (SGD)
Exempt
from tax
Exempt
income (SGD)
First 10,000 75% 7,500
Next 290,000 50% 145,000
Total 152,000
Years of assessment 2020
Chargeable
income (SGD)
Exempt
from tax
Exempt
income (SGD)
First 10,000 75% 7,500
Next 190,000 50% 95,000
Total 102,500

Start-up tax exemption (normal income tax rate)

Years of assessment 2018 to 2019
Chargeable
income (SGD)
Exempt
from tax
Exempt
income (SGD)
First 100,000 100% 100,000
Next 200,000 50% 100,000
Total 200,000
Years of assessment 2020
Chargeable
income (SGD)
Exempt
from tax
Exempt
income (SGD)
First 100,000 75% 75,000
Next 100,000 50% 50,000
Total 125,000

Not every business is eligible to avail the start-up exemption. Businesses such as property development and investment holding companies cannot avail this benefit.

Singapore Tax Treaties

A tax treaty is an agreement signed between two nations to decide the taxation of the income earned by the authorities of two nations, in the case of a company running businesses in both nations. An income tax treaty is signed so that businesses do not have to pay double taxes on their income. Singapore has signed tax treaties with more 80 countries and number is consistently on the rise.

Every company that has earned from countries that do not have double tax agreement with Singapore, will be given a tax credit on their income from those countries.
For more information, refer to Singapore tax treaties and double tax agreements.

To learn more about how to maximize the tax benefits while doing business in Singapore, please contact us.

Thank you for your interest in Pearson.

TYPE
Incorporation Bank Account Tax Accounting Visa Others