Singapore Corporate Tax

We bring solutions to make life easier for Filing Corporate Tax.

Singapore Corporate Tax2023-08-04T14:31:45+08:00

Key Note

If you’re planning to or already registered your company in Singapore, you’re required to file your corporate tax according to the country’s regulations. Engage our filing services for corporate tax in Singapore and reap the benefits of strategic tax planning.

Corporate Tax in Singapore

Many investors choose Singapore to start their company as the country is a tax haven jurisdiction. The low corporate tax rate of 17% and business-friendly taxation policies make Singapore an attractive destination for businesses.

Singapore companies do not have to pay corporate taxes to tax authorities of more than one country the use of double taxation agreements (DTAs) with over 80 countries where Singapore firms can claim.

Check Your Tax Payable using our free tool!

Enter your chargeable income to generate the net tax payable for new startup exemptions and partial tax exemptions.

New Start-Up exemptions (first 3 years)
Net tax payable
Effective tax rate
Partial Tax exemption
Net tax payable
Effective tax rate

How to File Your Yearly Corporate Tax Filing?

STEP 1: File Estimated Chargeable Income (ECI)

The first step to be completed when filing corporate tax in Singapore is that of filing an Estimated Chargeable Income (ECI) form. This form estimates the company’s total amount of chargeable income IRAS within three months of the financial year-end of the company.

Only companies which are specifically exempted from filing an ECI form do not have to do so. These companies which are exempt are those which:

  • Have a total annual revenue of S$5 million or less

  • Did not have any estimated chargeable income during the relevant year of assessment (YA).

Declaration of Revenue in an ECI Form

The ECI must be stated, and company’s revenue must also be declared in the ECI Form. This declaration is compulsory with effect from January 2017.

Revenue refers to a company’s main source of income and excludes items such as gain on disposal of fixed assets. If the company is an investment holding company, the main source of income is investment income (e.g., interest and dividend income).

Should the audited financial statements be unavailable, one can refer to the company’s management accounts for the purpose of declaring the revenue amount. Should the revenue amount based on audited financial statements be different from that declared in the ECI Form, and there is no change in the ECI, the revenue figure does not have to be revised.

STEP 2: File Tax Computation With Form C/CS

Once this has been done, the company owner is to file the company’s annual income tax return with IRAS. This income tax return specifies the exact amount of a company’s income during a specific tax year. It must be filed by every company in Singapore.

Even companies which are to be struck off or liquidated as well as companies which have made losses instead of profits must file this income tax return. Dormant companies are also to file an income tax return, but when they do so, they are to submit a more simplified version instead of the standard tax return form.

The vast majority of companies based in Singapore must use Form C to file an income tax return. Information which is to be submitted on a copy of Form C includes tax computation, financial statements, and supporting schedules. However, there are also certain companies which are to use Form C-S instead of Form C for this purpose.

Such companies must have fulfilled the following criteria:

  • Incorporated in Singapore with annual revenue not exceeding S$5 million

  • Income must have corporate income tax imposed at 17% and therefore no claims on tax reduction

  • No claims on any foreign tax credits or investment allowances for the purposes of tax reduction

What Business Expenses to Be Included in Tax Computations?

Business expenses are expenses paid to keep a business in operation. However, business expenses may be deductible or non-deductible. When deductible, they reduce a taxpayer’s taxable income and the amount of tax which must be paid.

Deductible Business Expenses

Generally, deductible business expenses are those “wholly and exclusively incurred in the production of income”. In other words, they must satisfy all these conditions:

  • Expenses are solely incurred in the production of income.

  • Expenses are not a contingent liability, i.e. they do not depend on an event that may or may not occur in the future. In other words, the legal liability to pay the expenses must have arisen, regardless of the date of actual payment of the money.

  • Expenses are revenue, and not capital, in nature.

  • Expenses are not prohibited from deduction under the Income Tax Act.

Types of Corporate Tax in Singapore & Their Rates

Find out the corporate tax rates below.

Type of corporate tax Tax rate %
Headline Tax on corporate profits 17%
Effective Tax on newly start up company on $300k Profits is 7.34%
Effective Tax on existing company incorporated more than 3 years on $300k Profits is 8.39%
Tax rate on one off capital gains from company’s divestment 0%
Tax rate on dividends distributed to local and overseas shareholders 0%
Tax rate on foreign-sourced income not accruing in or derived from Singapore 0%

New Start-up Tax Exemptions in Singapore

Just started your new Singapore company? Tap on the new Tax Exemption Scheme to enjoy tax-free operations for the first 3 Year of Assessment (YA). You can also continue to enjoy Partial Tax Exemption (PTE) from the fourth year onwards. Find out more about the ins and outs of corporate tax in Singapore here at Paul Hype Page & Co.

Here’s what you need to know.

Singapore Corporate Tax Rate

The Singapore corporate tax rate is at 17%. This is a flat rate on chargeable income, regardless of whether it is a local or foreign company

Requirements for the Company Tax Exemption Scheme

To qualify for the tax exemption, the company must:

  • Be incorporated in Singapore
  • Be a tax resident in Singapore for the Year Assessed
  • Have no more than 20 shareholders throughout the basis period of the Year Assessed
  • Have its shareholders beneficially and directly holding the issuing shares in their own names OR have at least one shareholder beneficially and directly holding at least 10% of the issued ordinary shares of the company
Singapore corporate tax rate 17%

Company Tax Exemption Scheme for New Startup Companies

If your company satisfies the qualifying conditions, you are eligible for the tax exemption scheme. You can claim a 75% tax exemption on the first S$100,000 and a 50% tax exemption on the next S$100,000 of normal chargeable income for each of the first 3 consecutive years of assessment.

Reduce Your Singapore Corporate Tax Bill

The tax exemptions for qualifying companies (e.g. new start-up companies) for their first 3 consecutive YAs are as follows:

75% TAX EXEMPTION For FIRST $100,00 Normal Chargeable Income
50% TAX EXEMPTION For NEXT $100,00 Normal Chargeable Income

Here are other ways to reduce corporate tax, aside from the new start-up exemption:

Purchase of fixed assets

Buying a fixed assets like machinery or furniture allows a company to accumulate capital allowances. Capital allowances can be claimed in the form of tax deductions.

They pay for a company’s acquisitions of machinery or equipment which are used to generate income for the company. Any capital allowances which have gone unused during a particular YA may be carried forward to subsequent YAs as long as the company has not made any major changes to its primary business activities or shareholdings.

Offset profits

Many companies which have made losses in prior years can lower tax by utilising those losses to offset profits for the current year, lowering the amount of tax money they will be to pay.

For this purpose, companies need to pass the Shareholding Test. The Shareholding Test states that there must not have been any substantial changes in the shareholding of the company between the end of the YA in which the company incurred the losses and the beginning of the YA which is related to the income from which these losses are to be deducted.

Your Questions, Answered

We’ve picked the top 4 questions that we get asked the most when it comes to Singapore corporate tax. Check them out below.

How does corporate tax work in Singapore?2023-02-21T11:20:52+08:00

Singapore corporate tax leverages on the territorial tax system and levies taxes on profits instead of revenue. All the profits generated by your Singapore company are taxed at a flat rate of 17%. Once you successfully register your business, you will be responsible to pay your corporate taxes and hiring a business consultant who is experienced with Singapore corporate tax is necessary to understand the taxation system.

How much does it cost for corporate tax filing in Singapore?2023-02-21T11:21:28+08:00

Our services for filing corporate tax in Singapore are divided into two categories: for existing clients and for new clients. For our existing clients, tax computation and filing is S$600. For new clients, do reach out to us so we can understand more about your tax filing requirements.

What are the filing deadlines I need to take note of?2023-02-21T11:22:42+08:00

The corporate tax filing deadlines are as follows:
Financial Year End (FYE)
You can choose any date, like March 31st basic deadline for filing your reports

Estimated Chargeable Income (ECI)
3 months after FYE
Your filed taxable income minus all tax-allowable expenses

C-S/C Annual Tax Returns
November 30th year after the FYE
Report your taxes following the Singapore standards

How is Income Assessed in Singapore?2022-06-27T12:20:27+08:00

Income is assessed on a preceding year basis. This means that the basis period for any Year of Assessment (YA) generally refers to the financial year ending in the year preceding the YA.

Is there any tax incentive for the maritime industry?2021-02-09T11:56:41+08:00

Yes, Maritime Sector Incentive – Approved International Shipping Enterprise (MSI-AIS) Award is available for the qualified industry players in the maritime industry.

What is the purpose of tax incentives?2021-02-09T11:56:26+08:00

The tax incentive is an initiative launched by a country to attract investment and to encourage economic activity. Normally, with the tax incentive, the government will reduce the company’s tax payments

What is an example of a tax incentive in Singapore?2021-02-09T11:55:55+08:00

One of the examples of tax incentives in Singapore is the Productivity and Innovation Credit (PIC) Scheme.

What is the corporate tax rate in Singapore?2021-02-09T11:46:16+08:00

The corporate tax rate in Singapore is 17%.

I have extra income from winnings (Toto, 4D…), is it taxable too?2020-12-17T10:52:58+08:00

Yes, all income earned in or derived from Singapore is chargeable to income tax, including winnings. 

Is royalty considered taxable income in Singapore?2020-12-17T10:52:39+08:00

Yes, royalty is considered taxable income in Singapore. 

What is the maximum personal income tax rate in Singapore?2020-12-17T10:52:25+08:00

The maximum personal income tax rate in Singapore is 22%. 

Do all resident taxpayers pay the same income tax rate in Singapore?2020-12-17T10:51:42+08:00

No, Singapore practices progressive tax for the resident taxpayer. The more you earn, the more tax you will need to pay. 

What is Form C?2020-07-01T10:23:12+08:00

A company must declare its income by completing the Income Tax Form for companies. This is known as Form C and must be completed each year. 

IRAS will send the first Form C to a newly incorporated company in the second year following the year of incorporation. 

Thereafter, Form C for subsequent YAs will be sent to your company in March or April every year. 

You may need to request for the first Form C to be sent to you earlier, that is, in the year immediately after the year of incorporation (instead of the second year following the year of incorporation) under certain circumstances. 

Note that income is assessed on a preceding year basis. This means that the basis period for any YA generally refers to the financial year ending in the year preceding the YA. 

Example 1 

Your company is incorporated on July 1, 2007, and its financial year end is June 30. 

If your company’s first set of accounts covered the period from the date of incorporation (July 1, 2007) to June 30, 2008, your accounts will be for YA 2009. You do not need to request for Form C for YA 2008. 

Example 2 

Your company is incorporated on July 1, 2007 and its financial year end is December 31. 

If your company’s first set of accounts covered the period from the date of incorporation (July 1, 2007) to December 31, 2007, your accounts will be for YA 2008. In this case, you have to request for Form C for YA 2008. 

  • Form C can be requested via the form titled “Request for Form C for Newly Incorporated Companies or Companies Granted Waiver to Submit Form C/Change of Particulars (36KB)”. 
  • If a company’s first set of accounts covered the period from the date of incorporation to December 31 of a particular year, accounts will be for the YA after the December 31 which ends the period. There is no need to request for Form C for the YA before it. 

  

Accounts for a given period are to be submitted with the Form C. Form C will be sent to a company in March or April. When filing Form C for a YA, separate tax computations must be submitted for each of two YAs if accounts cover a period of more than 12 months. Income must also be apportioned for each period, and a letter stating that tax computations for the two YAs are enclosed must be attached. 

Why must Singapore have Tax exemptions on International air travel and shipping Income?2020-07-01T10:22:59+08:00

The countries to which these tax exemptions apply are heavily involved in shipping and air routes to and from Singapore. Therefore, these exemptions encourage the people of these countries to continue to engage with and conduct business activities in Singapore.

How to claim for tax exemption?2020-07-01T10:22:37+08:00

You are required to make a declaration in your income tax returns by giving the nature and amount of the foreign-sourced income that was remitted to Singapore. You are also required to complete the Declaration Form for Foreign-Sourced Income Received in Singapore From 22 Jan 2009 to 21 Jan 2010 (60KB) for submission to IRAS. Although you have to state the use of the foreign income in the declaration form, the usage of such foreign income will not affect the claim for tax exemption.

Singapore Corporate Tax Articles

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Why Is Singapore a Tax Haven?

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Our Singapore Corporate Tax Services

Engage us as your trusted corporate tax specialist with these corporate tax services. You’ll get a peace of mind on all taxation regulations and requirements, so the focus can be on your company.

Keep you updated on the Singapore tax regulations and compliance requirements

Monitor the statutory deadlines and meet compliance filing deadlines

Preparation and filing an estimated chargeable income

Preparation and reviewing of tax provision calculations

Preparation and reviewing the tax computation and Form C

Submission of finalised tax computation and Form C

Provide advice on the tax payments due dates upon receipt of Assessments

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