The Singaporean government has introduced certain tax exemptions and reductions which are targeted at the many startups of the country. It has done so in order to increase the level of entrepreneurship which exists across Singapore in order to boost the country's economic status.

Tax Exemption may be Obtained and Used by Startups in SG

Singapore is a country which is full of lucrative business opportunities. The country is one of the world’s most conducive for the conducting of business activities. One key reason for the success of Singapore’s business scene is that of the favorable tax policies related to businesses which have been introduced by the Singaporean government. The corporate tax rate which exists in Singapore today is one of the lowest in the world. Singapore’s numerous double taxation treaties also prevent the income of foreign business owners in Singapore from being subject to taxation in two different countries, of which one is Singapore. The lack of capital gains tax also serves as a boon for all business owners in Singapore. 

Another tax-related advantage for business owners in Singapore can be seen in the form of tax exemptions. Some of these tax exemptions may only be used and obtained by Singapore-based startups. These tax exemptions are intended to increase the level of entrepreneurship across the country because an increase in entrepreneurship would be of great benefit to the country’s economy, businesses, and business owners. Furthermore, these exemptions also allow Singapore-based startups to better establish themselves within the corporate scene of Singapore.


Startup Tax Exemption Details 

The tax exemption scheme created by the Singaporean government for the startups of Singapore allows them to benefit from a complete tax exemption on the first S$100,000 of normal chargeable income which they have earned. The following S$200,000 of normal chargeable income earned by any eligible startup will receive an exemption of 50%. These exemptions apply to all startups based in Singapore which are in the first three years of their business operations.

However, not all Singapore startups are allowed to claim the tax exemption meant for startups in Singapore. There are certain criteria which are to be fulfilled before eligibility of the startup can be confirmed. One of these is that the startup must have been registered and incorporated in Singapore. The startup in question must also be a tax resident of Singapore during the year of assessment to which the tax exemption is to apply. The startup which intends to claim the tax exemption must also have a number of shareholders which is not more than 20 during the relevant year of assessment. Should each of the preceding criteria be fulfilled by the startup, it may proceed to claim the tax exemption provided. 

It might be the case that you might require assistance to handle any or even all of your tax-related issues. Should such be the case, we at Paul Hype Page & Co can be of service to you. Our tax team will see to it that all your tax obligations are suitably and properly fulfilled. We will also help you understand all the ways in which you can legally reduce your tax bill in Singapore. 

Thinking of incorporating in Singapore? Let’s get started.

E A S I E R • F A S T E R • B E T T E R

Upcoming Changes to Singapore’s Tax Exemption for Startups 

In recent years, the Singaporean government has introduced various schemes to assist in the development of startups in the country. For this reason, the government has deemed it necessary to revise the details of the tax exemption scheme for startups. Starting from the 2020 year of assessment, all startups in Singapore which are eligible for the tax exemption may no longer claim a complete tax exemption on the first S$100,000 of normal chargeable income which has been earned. Instead, such companies may claim a tax reduction of 75% on the same first S$100,000 of earned normal chargeable income. The subsequent S$100,000 of normal chargeable income which is earned by the startup will receive a tax reduction of 50%; previously, it had been the subsequent S$200,000 of the startup’s normal chargeable income which was to receive this same 50% tax reduction.