Singapore Company Incorporation with Paul Hype Page
Company Registration at Paul Hype Page Singapore

Singapore’s corporate tax system is renowned for being among the world’s most business-friendly. Therefore, many businesses from all over the world choose to conduct business operations in Singapore. By doing so, they may garner benefits which they would not in other countries.

Singapore has deservedly gained the reputation of being a global corporate powerhouse. It is one of the countries that many foreign entrepreneurs consider to be a very attractive business location. Singapore’s laws that govern corporations in the country are a major reason for this. The country’s business laws have been designed to set corporations up for success and attract business owners to potentially relocate or expand there. Another major factor that has propelled Singapore to economic success is its extremely business-friendly corporate tax system. Many businesses have greatly benefited from this system which takes care of corporations’ financial well-being like few others in the world.

Visual Content

The solutions we offer for companies and their owners cover important areas such as incorporation, taxation, auditing, and work visas, among others.

Informative Content

We are always ready and willing to work with any genuine and legitimate company which requires our incorporation services or any other services we provide.

Packages

We offer company incorporation, consultancy services, auditing, taxation, immigration & compliance services.

Singapore’s Corporate Tax System

Paying corporate tax in Singapore is much simpler than doing so in most other countries. Furthermore, corporate tax rates there are among the most favourable to businesses in the world. Therefore, it is only to be expected that many companies are interested in starting a business in Singapore.

The corporate tax system in Singapore is a single-tier system. In a single-tier system, corporations only need to pay corporate tax once a year. This is to be done at the conclusion of the financial year. This tax is to be paid with regard to the entire revenue of the company. Shareholders are not taxed on any business profits received. There is also no tax imposed on capital gains, nor is there a dividend withholding tax. All dividends paid by companies which are Singapore tax resident are tax-exempt when possessed by shareholders.

Singapore’s corporate tax rate has been gradually declining over the past two decades. In 1997, corporations based in Singapore had to pay tax at a rate of 26%. Since then, the rate has been lowered six times. It fell to 25.5% in 2001, 24.5% in 2002, 22% in 2003, 20% in 2005, 18% in 2008, and most recently, 17% in 2010. The corporate tax rate has remained at 17% since then.

Singapore’s corporate tax system uses a preceding-year basis. This means that when one files corporate tax in a certain year, the tax paid will be related to the company’s profits earned during the calendar year directly preceding the current one. When filing corporate income tax returns, the documents that are also required by tax authorities are a Form C, tax computation, and any necessary accounts, be they audited or unaudited. It must also be kept in mind that not all companies need to be audited. Private companies that have fewer than 20 shareholders and an annual revenue totalling less than S$5 million do not have to be audited. Companies that were dormant during the most recent financial year used as a basis period also do not require any auditing.

Whatsapp icon

Corporate Tax Incentives

Owners of Singapore tax resident companies may also take advantage of certain tax incentives. These incentives are intended to mitigate the costs incurred in operating a business. One such incentive is the Corporate Income Tax Rebate. This incentive allows eligible businesses to receive tax rebates of either up to 25% of taxable corporate income, capped at $15,000 for YA 2020. Another notable tax incentive is the Startup Tax Exemption Scheme. This scheme allows companies that have recently begun operations to claim a 75% tax exemption on the first S$100,000 of qualifying expenses for the first three YAs falls in 2020 onwards, 50% tax exemption on the next $100,000 of normal chargeable income for which they are to be taxed.

The Wage Credit Scheme benefits managers and employers. The scheme grants an exemption of 15% of wage increases which employers give to employees who earn at least S$5,000 worth of gross monthly salary. Employers who granted their employees wage increases in the relevant YAs qualify for this scheme.

For existing companies (from YA 2020), they will get 75% tax exemption on first $10,000 and 50% tax exemption on next $190,000. For startups (where any of the first 3 YAs falls in or after YA 2020), they are entitled for 75% tax exemption on first $10,000 and 50% tax exemption on next $100,000.

Any further income earned is taxed at the usual corporate tax rate of 17%. If the company is the Singapore branch of a foreign company, tax treaties may also be used to help it avoid double taxation. This also reduces the total effective tax payable.

Singapore’s corporate tax system has allowed companies based there to experience tremendous benefits. This tax system has proven to be very accommodating to businesses of all sizes and in all fields. If you would like your company to reap some of the advantages of being based in Singapore, we at Paul Hype Page & Co provide services related to starting a company there. We also provide accounting and tax planning services for companies.

An Overview of Corporate Tax in Singapore FAQs

Which countries have signed Avoidance of Double Taxation Agreements (DTAs) with Singapore?2020-11-20T09:00:13+08:00

Countries like the USA, Malaysia, India, Australia, China, Indonesia, and Japan have signed DTAs with Singapore. View the full list of the countries here.

What are the Tax Forms that Companies must submit annually?2020-11-20T08:59:51+08:00

The Tax Forms that companies must submit every year are: 

  • Estimate Chargeable Income (ECI) 
  • Corporate Income Tax Returns 
Why is Singapore tax so low?2020-11-20T08:59:30+08:00

Singapore tax is relatively low as compared to other countries because competitiveness is a decisive consideration undergirding its tax policy. 

What is the corporate tax rate in Singapore?2020-11-20T08:58:12+08:00

The corporate tax rate in Singapore is 17%. 

2021-01-27T17:07:12+08:00February 12, 2014|0 Comments
forumforum

Leave A Comment