When it comes to corporate tax, Singapore’s laws are very progressive. There is a deliberate effort to ensure that the tax rates that are in place are favorable to investors and that they place Singapore at an advantageous position compared to her competitors. In fact, the low tax rates and a convenient business environment are two things that continue to endear Singapore to investors.
The headline tax rates in Singapore today is 17% on corporate earnings. In many cases, the effective tax rate is much lower than this. This is because the tax brackets in Singapore are not as straightforward as they may seem at first glance. There are many exemptions and tax deductions that are dependent on many other things including the duration for which the company has been in existence, the company’s taxes residence, and the number of shareholders. For example a company that has been in existence for less than three years, has Singapore as her tax residence, and has not more that 20 shareholders, will not be taxed on its first S$100,000. There also exists a partial tax exemption for all companies that are resident taxpayers in Singapore for all the income between S$100,000 to S$300,000, which is taxed at the rate of 8.5%. For income that exceeds S$300,000, the tax rate is 17%. This figure has come from a high of 26% in 1997.
Year of Assessment and Deadline for Tax Returns
Since the year 2009, the deadline for submitting tax returns is on the 30th of November. For example, on the 30th of November this year, all persons will be required to submit their returns for the year and ending on the 31st of December 2012. The year of assessment will vary depending on the financial year of the corporation in question. For example, a corporation whose financial year ends in June will be required to submit its returns based on the July 2011 – June 2012 financial year. This flexibility ensures that businesses have ample time in preparing their financial statements for tax return purposes. In addition to these it removes the burden reconciling income statements for tax purposes and those meant for reporting purposes.
No company, regardless of its size, is exempted from filing tax returns. However, private companies that have less than $5 million in annual income, or those which have not had any accounting transactions during the year are exempted from submitting audited accounts, although they’ll be require to submit unaudited accounts for the year. Like in any other country, corporate and business related taxes are a complex issue in Singapore. Apart from the constant changes that are being made to the tax laws, Singapore continuously enters herself into treaties that may affect the amount of money you may have to pay in form of taxes. For this reason, if you would like to get the best results you will need to employ a professional tax consultant to help you out on this.
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For further information to set up Singapore business , you can refer to the following useful links: 1) Type of Singapore Business Incorporation 2) Singapore Company Tax 3) Singapore Business Guide for licenses, yearly Singapore company compliance and relevant business information Further, you also need to consider of moving your assets to Singapore to demonstrate your commitment however it can be complicated as its involve cross border tax issue. You might be unaware of your tax residence status, how to avoid double taxation and yearly tax reporting requirements. Let our experienced tax consultant assists you in your international tax planning to lower down your overall tax position.
Contact Paul and Hype Page Co. for a FREE consultation on Singapore tax planning. We provide the following services:
- Instant online company registration in Singapore
- International tax planning and advice
- Professional company secretary service at affordable price
Paul Hype Page & Co. is an ACRA-certified business adviser. Our team of seasoned professional can help you set up a company in Singapore very quickly and easily following all legal entities, and offer you sound advice on how to make it successful too. In addition to business registration, we’ll also guide you how to:
- Write a business plan – Learn how to write a compelling business plan by accessing our sample business plans, or other helpful market research information
- Perform market research – Understand your business market, learn how it can enhance your business growth, and how to properly conduct a market research for your business
- Legal issues for small business – If you are thinking about registration of company in Singapore, then you really need a lawyer. In addition, you will learn why legal counseling is very important part of any business.
- Manage your finances – We’ll offer you FREE resources and information to help you fully understand all financial concepts and teach you how to perform basic accounting tasks like budgeting, bookkeeping, financial analysis, among others.
By Eric Eio Managing Partner of Paul Hype Page & Co. Eric was awarded an ACCA graduate in 2000 and also graduated from University of Sydney with a Bachelor degree in Computer Science & Accounting. Since graduation, he had worked in Big 4 as an auditor , including a one year overseas stint with Ernst & Young, Shanghai in 2005. He left his last appointment as an Audit Managerial position with PricewaterhouseCoopers, Singapore in 2008 before setting up his own Certified Public Accountant Practice – Paul Hype Page & Co.His firm is being selected to be one of the advisory panel for Singapore top 500 SME.
Categories: Corporate Tax in Singapore