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Corporate Tax
Singapore has one of the most competitive corporate tax structures in the world. The corporate tax structure is a pro- business package inclusive of wide ranging stimulus such as income exemptions, incentives, generous capital allowance and a wide spanning network of double taxation avoidance agreements. Here is a preview of the chief features of our tax system.
Singapore resident companies are taxed on chargeable income generated in Singapore or overseas income received in Singapore. Companies are generally taxed a flat headline rate of 17% but, this reduces significantly to as low as 8.5% for small and medium sized companies with less than S$300,000 as chargeable income, due to Partial Exemption Scheme.
Partial Exemption Scheme
| Year of Assessment | Headline Corporate Tax Rate | Chargeable income | Effective Tax Rate |
|---|---|---|---|
| First S$10,000 | 4.25% | ||
| 2010 | 17% | Next S$10,001 – S$300,000 | 8.5% |
| Above S$300,001 | 17% |
New Startup Companies Scheme
This scheme is to help new companies in their initial years of establishment. Under this scheme qualifying companies in the first three years of filing, can enjoy an effective tax rate of 8.5% on chargeable income of up to S$300,000.
| Chargeable income | Effective Tax Rate 2010 |
|---|---|
| First S$100,000 | 0% |
| Next S$100,001 – S$300,000 | 8.5% |
| Above S$300,001 | 17% |
For income beyond S$300,000 the general headline tax rate of 17% applies. Commencing from the fourth year of filing a resident company will be taxed as per general tax rates, and will be entitled for partial tax exemptions.
Single-tier corporate tax system
Since 2003 Single-tier corporate taxation system is practiced in Singapore. A company’s Income after tax when distributed as dividends is exempt from tax in the hands of the shareholders. Any gains from the sale of capital assets are also not subject to tax.
Rikvin offers comprehensive corporate taxation services including
- Registration of new tax payer & application for Easy access code
- Computation of taxes & preparation of supporting schedules
- Submission of Form C
- Submission of Estimated Chargeable Income (ECI)
- Application for residence certificate
- Application for tax waiver (for dormant companies)
- Application for tax clearance (for companies going for strike-off)