Singapore is frequently quoted as the primary example of countries that continues to diminish corporate income tax rates and introduce several tax incentives in order to attract foreign investments.
The corporate income tax amount has been fixed at 17% since 2010 and it is planned on the basis of the business’s chargeable income i.e. taxable revenues, less permissible costs and other allowances.
Corporate tax rates in Singapore
As our accountants in Singapore say, the corporate income tax rate is 0% on the first S$100,000 chargeable income for each of the first three tax filing years for a brand new integrated business that meets the following circumstances;
• belongings and stock holding businesses are not eligible;
• must have no more than 20 individual stockholders;
• in case of company shareholders, one individual must hold at least 10% of the issued bonds.
All Singapore local corporations are allowed for partial tax exception which in fact translates to about 8.5% tax rate on chargeable income of up to S$300,000 per year. The taxable profits higher than S$300,000 will be charged at the standard corporate tax rate of 17%. Concerning the rate itself, while Singapore’s minimal rate is already the third lowest in the world, the effective tax allocated comes out to even lower if one takes benefit of all the government inducements, subventions and schemes.
The goods and services tax (GST) is another important tax in Singapore and our accountants can assist with GST registration.
Tax rates according to the accounting firms in Singapore
Singapore adopted a one-tier company tax system under which tax remunerated by a company on its chargeable income is the ultimate tax. All shares paid by a company are excused from tax in the hands of the stockholders. A corporation is taxed at a flat rate of 17% (2010) on its chargeable income unrelatedly of whether it is a local or foreign firm.
Capital increase such as gains on sale of fixed possessions or gains on foreign exchange on capital trades is not chargeable.
Some income such as foreign-sourced dividends, division profits and service income established by a resident corporation that satisfies the qualifying circumstances may be excused from tax under the provisions of the “Singapore Income Tax Act”, as our local accountants remind.
Corporate income tax refund in Singapore
In 2013 the government of Singapore announced that for year of taxation 2013, 2014, 2015 and 2016, all businesses will be decided a 30% corporate income tax rebate that is subject to an annual capital of S$30,000.
The list of beneficiaries of this new scheme contains also listed business trusts, non-tax local firms in Singapore and enterprises already getting income taxed at a concessionary tax rate.
But, as our accounting firm in Singapore mentions, it doesn’t apply to the quantity of earnings of a resident company, which is subject to ultimate withholding tax.
For accounting services and more details about the corporation tax, please contact our accountants in Singapore.