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Taxation of Branches in Singapore

Taxation of Branches in Singapore

Branches in Singapore are considered non-residents for tax purposes and they are not treated as a separate legal entity from the parent company abroad.

We invite you to watch the following video on branch taxation in Singapore:

The taxation of branches in Singapore is performed according to the local corporate income tax laws. One of our accountants in Singapore can give you complete information about the taxation principles for this type of business form.

Branch taxation in Singapore

The profits derived by a branch in Singapore are taxed at the same rate as those derived by a subsidiary. The corporate tax rate for branches is 17% and a partial exemption applies in the first 300,000 SGD of chargeable income.

Branches generally benefit from lighter accounting and reporting requirements. Nevertheless, they must file financial statements, which are audited on an annual basis, and income statements for their operations conducted in Singapore. The branch does not have to keep statutory registers.

In case you need more details about the taxes that must be paid for a branch office or if you need other accounting services, such as payroll in Singapore or GST registration services, you can rely on our team of Singapore accountants.

You should consider features, price, ease of use, and the reputation of the organization you choose to work with when talking about payroll in Singapore, but more importantly when talking about the services associated to this aspect of accounting. Contact us if you have questions about our services.

The status of a branch in Singapore

The branch of a foreign company in Singapore is not a separate legal entity from the foreign company (head office) abroad. This means that the foreign legal entity is fully liable for the debts and obligations of its Singapore branch.

Apart from the taxes on corporate income, when opening a branch in Singapore, investors need to pay a registration fee and handle all other costs related to company incorporation.

Our accounting firm in Singapore can help you with complete information on the tax treatment of a branch. These types of establishments may be treated as a Singapore tax resident if they submit a special application for a Certificate of Residence to the Internal Revenue Authority of Singapore. This is done in order to prove that the applicant (company) is a tax resident.

It is of utmost importance for businesses to manage payroll in Singapore accurately, with good maintenance, thorough personnel records, and reliable payout in accordance with local laws. It is not advisable to complete payroll in a hurried manner because doing so may have serious negative effects on employees and result in fines for the firm.

Several audit services are also available from our Singapore audit firm. It can be completed for various departments, and this type of service evaluates internal controls of operational systems and analyses risks. One goal of audits is to determine whether operations are successful, efficient, and in line with management’s plans.

Foreign corporations that are interested in setting up their operations in Singapore can explore more options for company incorporation. The subsidiary has different characteristics compared to the branch and may benefit from different tax incentives.

Contact us for complete accounting services in Singapore or if you have any questions on the taxation of branches.