Tax exemptions and inducements in Singapore
Singapore offers numerous investment incentives, such as:
• tax holidays and concessions;
• accelerated depreciation structures;
• advantageous loan conditions;
• equity participation;
• qualitative industrial estates.
These incentives are outlined in the Income Tax Act and the Economic Expansion Incentives (Relief from Income Tax) Act (EEIA) and are applied to a wide variety of activities. An accountant in Singapore can provide more details on what these activities consist of.
Below you can find the general tax exemptions or tax incentives in Singapore which are momentarily applied to resident businesses:
• 0% taxation on S$ 100,000 taxable income: the corporate income tax rate is 0% on the first S$ 100,000 taxable profit for the first three financial years for a recently registered business which meets certain criteria;
• 8.5% taxation on taxable profit up to S$ 300,000: all Singapore resident businesses can qualify for a partial tax exemption of 8.5% of the taxable profit up to S$ 300,000 yearly.
Double tax treaties signed by Singapore
Singapore has signed numerous double tax treaties which serve to avoid double income taxation gained in one country by the resident of the other signing state.
When receiving foreign profit in Singapore, it could be taxed. If the double tax agreement provides for a reduction of the tax rate, and not a tax exemption, the business in Singapore will also be taxed in the foreign country.
A double tax agreement offers an exemption for this double taxation, by enabling the business in Singapore to claim a credit of the foreign taxation placed on its tax payable in Singapore on the same profit.
If you need to know more about the tax incentives in Singapore for foreign investors, we invite you to contact our accounting firm in Singapore.