Singapore Corporate Tax System
The Singapore corporate tax system contributes to the growth of small and medium businesses of the Island nation with the help of various schemes and provisions. The one-tier tax system, effective tax rate, full and partial tax exemption and other schemes have given the SMEs a huge boost.
The corporate income tax Singapore is one of the most competitive in the world. Apart from the lower corporate tax rates in the country, the economic environment, it offers is conducive for both the locals and foreigners willing to incorporate a small or medium sized enterprise. The flat rate one-tier territorial based corporate tax system of Singapore is particularly helpful for new start-up companies in Singapore. The company tax rates as per the budget of 2015 are given below.
Singapore Company Tax Rates and Exemptions 2015
The following table illustrates in brief the corporate tax rates existing in Singapore as of 2015:
|Capital gains tax||0%|
|Income earned on foreign soil||0%|
|Tax on dividends given to shareholders||0%|
|Income Tax on profits of upto S$100,000 for first 3 years||0%|
|Income Tax on profits upto S$300,000 after first 3 years||8.5%|
|Income Tax on profits in the range of S$300,001-S$2,000,000||17%|
- The headline tax rate of Singapore is at a flat 17%.
- Full tax exemption for new start-up companies with profits up to S$100,000 for its first 3 years.
- The new start-up companies can avail a partial tax exemption of 50% on the next S$200,000 taxable income for the first 3 years.
- The partial tax exemption is also applicable to all the Singapore companies whose taxable income is up to S$300,000. For first S$10,000, the exemption is 75% and for the next S$290,000, 50% exemption.
- No tax on capital gains like foreign exchange of capital transactions, sale of fixed assets etc.
- No tax on income earned overseas.
One-Tier Corporate Income Tax Singapore
The one-tier corporate tax system came into effect on January 1, 2003. According to this system, the income tax paid by the companies on their taxable income is the ultimate tax and no tax is levied on the dividends paid to the shareholders by companies.
Productivity and Innovation Credit (PIC) Scheme
The intention behind starting PIC scheme was to motivate SMEs in adopting the culture of innovation and productivity. Since YA 2013, there has been good take-up of the scheme. However. The Singapore Budget 2015, states that the PIC Bonus Scheme will expire in YA 2015.
Singapore Corporate Income Tax (CIT) Rebate YA 2015
The corporate income tax (CIT) rebate was initially introduced foe helping companies in an optimistic manner to effectively deal with the increasing costs of business operations. All the other features of the CIT Rebate scheme will remain as it is, except the rebate will be offered for YA 2016 and YA 2017 at a reduced cap of S$20,000 per company Per YA.
Tax Deductions for Donations
Henceforth Singapore government will offer increased tax deductions from current 2.5 times to 3 times on all the qualifying donations made from 1 Jan to 31 Dec 2015. On the contrary, the existing 205 times tax deductions on all qualifying donations will be extended from 3 more years from 1 Jan 2016 to 31 Dec 2018.
Due Date for Singapore Company Tax Filing
You have an option to file corporate taxes in Singapore by using either online technology or by submitting paper documents. IRAS has mandated to use C-S form for filing corporate income tax in Singapore. It is necessary that every corporate entity should file their corporate income tax on or before the due date, which is November 30 (for paper form) and extended till December 15 (for e-filing).
At KJK Corporate Solutions, we offer corporate tax services that ensure all your corporate tax needs are taken care of. In addition to that, our guidance services for minimizing your Singapore corporate tax are highly regarded. Our aim is to make your day-to-day business operations easy and hassle-free.
Please feel free to contact us on +65 6423 1078 / 9488 5722 or drop in an email at firstname.lastname@example.org
Mr. Kaliyaperumal Jayaram
KJK Corporate Solutions Pte Ltd
+65 9488 5722 (Mobile) / 6423 1078 (Office)