Overview: Singapore’s corporate income tax adopts a system with a single-level uniform tax rate. There is no double taxation for stakeholders under the single-tiered corporate income tax system. Also, there are no new taxes are imposed on dividends paid by the company to its shareholders. Singapore’s capital gains are not taxed (fixed asset sales proceeds, capital trading foreign exchange earnings are some examples of capital gains).
Company Tax Rate: Starting in the year of assessment 2010, Singapore companies, whether they are local companies or foreign companies, are taxed at a rate of 17%.
Tax Exemption Scheme for New Start-Up Companies: Although the corporate tax rate is flat at 17%, a tax exemption programme has been implemented to help eligible companies reduce the overall effective corporate tax rate. The tax exemption scheme for start-ups was introduced in Year of Assessment (YA) 2005 to promote entrepreneurship and to help grow local enterprises.
YA 2019 and before
- 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*.
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*.
- Incorporated in Singapore
- Residence tax in Singapore
- There are no more than 20 shareholders, at least one of which is an individual shareholder holding at least 10% of the common stock.
All new companies are eligible for the above tax exemption, with the exception of these two types of companies: a company mainly engaged in investment holding business; and a company engaged in real estate development, sales, investment or investment and sales.