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Corporate/Company Tax

Corporate-Company-Tax

The Singapore corporate/company tax remains one of the many high points of the country’s vibrant economy which has attracted a large number of foreign investors and entrepreneurs. The nation’s corporate income tax rates have progressively been lowered in the past decade so as to nurture and aid the growth of businesses in Singapore.

Singapore is often considered one of the best destinations for businesses due its lower corporate tax rates and attractive tax incentives. Basically Singapore Corporate Income Tax system is a territorial based one-tier flat-rate system, which provides a congenial economic environment for regional and international companies. The structure of the Corporate Tax system in Singapore is documented below.

Introduction of One-Tier Corporate Income Tax System

The one-tier corporate tax system in Singapore was incorporated since January 1, 2003. Under this system, the tax paid by companies on its normal chargeable income is the final tax and the shareholders will not be taxed on the dividends paid by the company to them. Also, under the Singapore Income Tax System, there is no tax on capital gains like gains on foreign exchange on capital transactions, sale of fixed assets etc.

Singapore Corporate Income Tax Rates and Exemptions

Headline Tax Rate: The Headline Corporate Tax Rate in Singapore currently stands at a flat 17%.

Effective Tax Rate: The Effective Tax Rate in Singapore is lower than the headline tax rate due to the application of tax exemptions, tax incentives, etc. It Includes:

  1. Full Tax Exemption: The corporate income tax rate in Singapore is 0% on the first S$100,000 taxable income for each of the initial three years. After that, they will be taxed at 8.5% on taxable income upto S$300,000. This is applicable to a newly incorporated company in Singapore, which has a maximum of 20 shareholders, of which atleast one must hold 10% shares of the company.
  2. Partial Tax Exemption: All the Singapore resident companies are eligible for the partial tax exemption, which stands at 8.5% on taxable income of upto S$300,000.

Corporate Income Tax Rebate and SME Cash Grant for Year of Assessment (YA) 2011

In order assist companies reeling under the rising costs of doing business, the Ministry of Finance of Singapore in its 2011 budget has announced that companies will receive either a corporate income tax rebate or a SME cash grant, depending on whichever amount is higher.

Corporate Income Tax (CIT) Rebate: All the Singapore companies can claim a 20% CIT rebate on the taxable income for the YA 2011, subject to a cap of S$10,000.

SME Cash Grant: Citing the fact that many small sized companies are not taxable and subsequently do not reap the benefits of CIT rebate, the Ministry of Finance of Singapore introduced a one-off SME cash grant of 5% on the revenue of the company for YA 2011, subject to a cap of S$5,000.

We at Singaporeaccounts.com offer Singapore Tax services that encompass the corporate Singapore tax planning, calculation of corporate income tax rates and the preparation and submission of reports to IRAS (Inland Revenue Authority of Singapore) for the annual return filing, thereby enabling you to fully focus on your core business activities.

Please feel free to contact us on +65 6536 0036 or drop in an email at info@accountingservice.com.sg

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Singapore Taxation OverviewTax System & Tax RatesGST–Goods and Services TaxPersonal TaxCorporate/Company TaxProperty TaxDouble Tax TreatiesWithholding TaxTax for Non-ResidentsTaxation for InternsTax CalculatorECI (Estimated Chargeable Income)

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