Companies incorporated in Singapore need to comply with the applicable taxation regime. Many foreign investors choose the country because of its favorable business environment and competitive taxation regime.
Several tax exemptions and incentives are available, depending on whether or not the company is a start-up or if it is a branch of a foreign company.
The list below includes the most important issues to consider for investors who wish to be in line with the corporate tax compliance requirements in Singapore:
- The tax rate: Singapore has a low-tax regime and its tax on corporate profit is 17%, with a number of exemptions for different values of the normal chargeable income.
- The taxable period: the period for which the tax is calculated is usually yearly; for business profits, it is usually the case to use the accounting period.
- The tax returns: companies in Singapore are required to file an estimate of their income three months before the end of the accounting period; the tax returns are due by November 30; penalties apply for late filing or for no filing.
- The payment of tax: the actual tax is to be paid within one month after the assessment.
- The audit: not all companies are subject to mandatory audit, however, this becomes a condition when the annual turnover exceeds a certain amount.
Corporate tax compliance in Singapore can be simplified when company owners choose to work with a team of specialized local accountants. Entrepreneurs can request specialized accounting services in Singapore if they choose to open a company here.
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Corporate taxation in Singapore
The basis for corporate taxation in Singapore is residency. Companies are considered Singapore resident entities if they are managed and controlled from the country. All types of income derived from Singapore are subject to taxation and all foreign income remitted to Singapore is also taxed.
The standard corporate income tax rate in Singapore is 17%. A tax exemption exists for 75% of the first 10,000 SGD and 50% for the next 290,000 SGD. These exemptions are subject to a number of conditions. An accounting firm in Singapore can give you complete details on how this percentage applies to your company.
Reporting requirements for companies in Singapore
The tax year in Singapore is usually the same as the calendar year. Companies may adjust this period because the tax returns are filed according to the financial year observed by that corporation. An accountant can help company owners in Singapore file the tax returns in due time. An estimated chargeable income is to be submitted to the tax authorities within three months from the end of the financial year. Companies in Singapore may not file consolidated returns.
Singapore has concluded more than 70 double tax treaties which allow foreign companies to benefit from a single point of taxation for their income derived in Singapore and/in their country of origin.
For more detailed information about corporate taxation in Singapore, the tax compliance requirements, and annual submissions as well as adequate assistance please do not hesitate to request our accounting services in Singapore.