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Business Taxation in Singapore
 
 
 

General

A company is resident in Singapore if its central management and control of the business is exercised there. Singapore-resident companies are generally taxed on their worldwide income; non-resident companies are taxed on their Singapore-source income only, which can prove attractive to international holding and trading companies.

Non-resident companies do not benefit from double tax treaties signed by the Singapore government.

Tax Rates

The corporate income tax rate is 17% (decreased from 18% prior to 2010).

There is a partial tax exemption on normal chargeable income (excluding Singapore franked dividends) of up to S$300,000, as follows:
• 75% on the first S$10,000 of income; then
• 50% on the next S$290,000,

which gives a total exemption of S$152,500.

New start-up companies benefit from full tax exemption on the first S$100,000 of normal chargeable income for the first three consecutive years of assessment, plus a further 50% exemption (from tax year 2008) on the next S$200,000 of normal chargeable income (in both cases, excluding Singapore franked dividends). Therefore, a new start-up company can qualify for a total exemption of up to S$200,000 in each of the first three years of business.

International and regional headquarters can benefit from reduced corporate income tax rates of 10% and 15% respectively. There are also reduced corporate income tax rates and exemptions available to companies involved in shipping and maritime activities.

Calculation of Taxable Base

Taxable income includes:

• gains or profits from any trade or business;
• income from investment such as dividends, interest and rent;
• royalties, premiums and any other profits from property; and
• other gains of an income nature accrued in or derived from Singapore, or income received in Singapore from outside of the jurisdiction. Capital gains (e.g. gains realised on the sale of fixed assets, or on foreign exchange on capital transactions) are not liable to corporate income tax. Certain income is exempt from tax under the Income Tax Act; examples of exempt income include shipping income derived by a shipping company, and foreign-sourced dividends, branch profits and service income received by a resident company that satisfies the qualifying conditions.

Deductible expenses must have been wholly and exclusively incurred in the production of income, and must also be revenue in nature and not prohibited under the Income Tax Act. Capital expenditure is not allowable as a tax deduction. Non-deductible expenses include amortisation and depreciation (although capital allowances are allowed), bad debts, the write-off or acquisition costs of fixed assets, legal and professional fees, medical and motor vehicle expenses, and penalties and fines.


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