Singapore Corporate Tax

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 Singapore corporate tax filing services for strategic tax planning.

Singapore Corporate Tax2022-12-05T12:55:10+08:00

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.

Singapore corporate tax rate 17%

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.

Tax exemptions in Singapore

Here’s what you need to know.

REDUCE YOUR SINGAPORE CORPORATE TAX BILL

TAX EXEMPTION FOR NEW START UP COMPANIES

1-3 YAs
75% tax exemption
50% tax exemption

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

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.

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.

CHECK YOUR TAX PAYABLE

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)

File Estimated Chargeable Income

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.

File Tax Computation With Form CCS

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.

Angela

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.

Types of corporate tax services
  • 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

Singapore Corporate Tax FAQs

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?2022-06-27T12:21:16+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 is taxed at a flat rate of 17%.

How much does it cost for corporate tax filing in Singapore?2022-06-27T12:20:48+08:00

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?2022-06-27T12:19:30+08:00

The 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.

Undecided or got questions

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Speak to our consultations today to gain clarity to your questions today.

SINGAPORE CORPORATE TAX ARTICLES

Get insights on the Singapore corporate tax landscape so you understand the exemptions that you can have for your business and more.

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