Guide to Singapore Corporate Tax

There are 4 types of tax structure in Singapore which are:

  • Corporate Tax
  • Property Tax
  • Personal Tax, and
  • Goods and Service Tax (GST)
    Singapore is one of the best places where one should incorporate a company due to the numerous amount of benefits that a company can benefit from, such as excellent tax benefits. This article will share more details regarding Corporate Tax. 

Tax Rate and Taxable Income

A company in Singapore is taxed at a flat rate of 17% on its chargeable income regardless of whether it is a local or foreign company. 

Singapore follows a territorial tax system and in Singapore, taxable income includes:

  • Gains or profits from any trade or business
  • Income from an investment such as interest and rental property income
  • Royalties, premiums and any other profits of similar nature; and
  • Other gains of an income nature.

Tax Incentives

There are various tax incentives available for certain companies in Singapore to help lessen or discard its corporate tax.

1) Tax Exemption for New Start-Up Companies

YA 2020 Onwards

  • 75% exemption on the first $100,000 of normal chargeable income; and
  • A further 50% exemption on the next $100,000 of normal chargeable income. 

YA 2010 to 2019

  • Full exemption on the first $100,000 of normal chargeable income; and
  • A further 50% exemption on the next $200,000 of normal chargeable income.

Things to note:

There are certain criteria needed to be followed in order to be qualified for the tax exemption for new start-up companies. Criteria such as: 

  • The company must be incorporated in Singapore;
  • The company must be a tax resident in Singapore for that YA;
  • The company’s total share capital is beneficially held directly by no more than 20 shareholders throughout the basis period for that YA where:
    • all of the shareholders are individuals; or
    • at least one shareholder is an individual holding at least 10% of the issued ordinary shares of the company.

2) Partial Tax Exemption for all companies

All companies are qualified for this exemption unless they are qualified for the new start-up tax exemption schemes. 

YA 2020 Onwards

  • 75% tax exemption on the first $10,000 of normal chargeable income and
  • A 50% tax exemption on the next $190,000 of normal chargeable income

YA 2010 to YA 2019

  • 75% tax exemption on the first $10,000 of normal chargeable income and
  • A 50% tax exemption on the next $290,000 of normal chargeable income

3) Corporate Income Tax Rebate

All companies are qualified for this rebate as it is meant to help companies ease business costs and support restructuring by companies and is applicable for YA 2013 to YA 2020.

All companies will receive a corporate income tax rebate of the following: 

YAIncome Tax RebateCapped At

There are still more tax incentives available to help reduce the company’s taxable income so do contact us for more enquiries. 

Tax Return Filing

All companies need to submit two corporate income tax returns to Inland Revenue Authority of Singapore (IRAS) every year:

  • Estimated Chargeable Income (ECI): Due within three months from the company’s financial year end. 
  • Corporate Income Tax Returns (Form C-S or Form C): Due by 30 Nov for hard copy forms, and 15 Dec for e-filing.

Things to note: 

If a company fails to file the Form C-S/ C, accounts and tax computation by the due date, IRAS will; 

  • Issue an estimated Notice of Assessment (NOA). The company must pay the estimated tax within one month;
  • Offer to compound the offence with a composition amount not exceeding $1,000;
  • Issue a Section 65B(3) notice to the director to submit the required information in the Form C-S/ C to IRAS; and/or
  • Summon the company or person responsible for running the company (including the directors) to Court.

Auto-Inclusion Scheme (AIS) for Employment Income

The Auto Inclusion Scheme (AIS) is a tax scheme geared towards Singapore employers and administered by the Internal Revenue Authority of Singapore (IRAS). It allows employers to submit the income tax information of their employees electronically.

Requirement: AIS is compulsory for employers with 5 or more employees including

  • Full-time resident employees
  • Part-time resident employees
  • Non-resident employees including those who are based overseas and are required to render service in Singapore during the year (exclude details of employment income where clearance has been filed)
  • Company directors (including non-resident directors)
  • Board members receiving Board/Committee Member Fees
  • Pensioners; and
  • Employees who have left the organization but were in receipt of income in reporting year (e.g. stock option gains), or

Benefits: The submitted income information will be auto-included in employees tax returns for their verification and tax filing.  No longer require to provide hardcopy Form IR8A and appendices to IRAS every year.