Looking for a Corporate Tax Expert?
10+ Year Experience Top Taxation Firms in Singapore.
Corporate Tax
Corporate Tax
10+ Year Experience Top Taxation Firms in Singapore.
One-stop accounting service to keep your business 100% compliant.
Get free advice for your unique business needs from our range of professional services.
10+ Year Experience Top Taxation Firms in Singapore.
Taxation Services
Corporate Tax Services Singapore
Every company registered to do business in Singapore must file a corporate tax return to the Inland Revenue Authority of Singapore (IRAS). As a company, you need to ensure your corporate tax function keeps up with the current tax system. We have put together this guide to enlighten corporate businesses in Singapore on the country’s taxation system. Continue reading to see the tax rate for every corporation doing business in Singapore.
The cost of a corporate tax varies across each country. In Singapore, corporate taxes are paid to the Inland Revenue Authority of Singapore (IRAS). Corporate income taxation can be categorized into 3 classes: one tier, territorial-based tax, and the flat rate. We will give a detailed discussion on these categories in a later text.
What is Corporate Tax?
A corporate tax is defined as a tax imposed on a company’s net chargeable income. Singapore business tax rate is calculated and paid from the company’s net chargeable income, including the amount made from sales and revenue. Cost of goods and expenditure, tax allowable administrative expenses, and other tax allowable operating costs are subtracted from the total income to get the net chargeable income.
Single-tier
The single-tier dividend system is a corporate taxation system that has been in operation for many years in Singapore. In this practice, all your company’s profit is taxed just once, and all the proceeds paid to shareholders are exempted from additional taxation. In the one-tier corporate taxation system, income is taxed at the corporate level and is the only tax required. The one-tier corporate tax system is a simple taxation system that reduces administrative and compliance costs for the company. While in a two-tier system, company taxation is drawn from the company’s income and also from the dividends shared with stakeholders.
Flat-rate
A flat-rate company taxation system refers to the tax rate applied to all income levels. In such a situation, companies with a low income are taxed at the same rate as those with a high income.
Territorial based taxation and worldwide based taxation system
Singapore Corporate Tax System
Singapore makes use of a one-tier, territorial based system of taxation. Companies in Singapore are mainly taxed with the income earned domestically in Singapore. Profits, dividends, and services’ income earned overseas by the same company are not taxed. Although the terms are relatively simple, territorial taxation is more complex and contentious. Several factors determine the origin of the income, such as the nature of the profit and the nature of the transaction that led to that profit.
The Inland Revenue Authority of Singapore (IRAS) is the mandated governing body responsible for charging and collecting all taxes. IRAS also represents the country in international tax treaty negotiations and helps the government draft tax legislation. The IRAS performs valuation assessments for transactions related to properties in the country.
In summary, the corporate tax rate is conducive for business and limited liability companies trading in Singapore. Some of the key features of the Singapore taxation system include the following:
- Single-tier taxation system
- Territorial taxation
- No overseas income taxation
- No dividend income tax for shareholders
- Extensive bilateral treaties to avoid double taxation
- Numerous tax relief incentives
What is the Corporate Tax Rate in Singapore?
Singapore corporate tax rates are capped at 17%. This low taxation system has continued to encourage more investors to establish businesses in Singapore from around the world. Companies are also entitled to certain tax deductions if they meet prescribed criteria set by relevant authorities. Income obtained from another country and not received in Singapore is not taxable, and individuals do not have to pay Singapore business tax on capital, dividends, and gains.
Other types of taxes in Singapore:
Withholding tax
Withholding tax is a levy collected on income earned by a person who is a non-tax resident of Singapore.
Payments such as interest payments, management fees, royalty payments, and rents are all subjected to taxation by withholding tax. In addition, non-resident employees of a company and non-resident partners in Singapore are liable to payment of withholding tax. The type of payment involved will determine the withholding tax rate to be paid.
Property tax
Goods and services tax (GST)
Goods and services tax is commonly known as value-added tax in some countries. It is indirect taxation that is levied on goods and services purchased by consumers. Singapore’s goods and service tax rate is currently at 7%.. Goods and services delivered from a country outside Singapore to another country outside Singapore are excluded from this taxation.
Stamp duty
Any property you buy in Singapore will usually lead to additional payments. One of such additional payments is stamp duty.
Stamp duty is the taxation levy on documents related to the leasing or purchase. It is also payable to the IRAS. Therefore, all property transactions involving buying and selling are subject to stamp duty in Singapore.
Customs and excise duty
While no levy is directed to exported products from Singapore, custom duties are levied on a small number of items such as automobiles, tobacco, and other cash crops. The income tax is usually charged in different proportions to the commodity’s price.
Personal tax
Corporate Tax Incentives in Singapore
Pioneer incentive
Approved royalties incentives
Regional and international headquarters incentives
Investment allowances
Why Choose Us?
SJH Advisory is an experienced tax service provider firm in Singapore. We understand the unique tax concerns of corporations and the need for a closely controlled, incorporated approach to corporate income tax. We use our experience and understanding of tax laws, tax technology, and tax processes to create successful tax results concerning your business operation and needs.
Our corporate tax team gives relevant advice to organizations and provides adequate tax support to enable compliance with the law in Singapore.
Get a FREE Quote
Every company registered to do business in Singapore mustfile a corporate tax return to the Inland Revenue Authority of Singapore (IRAS). As a company, you need to ensure your corporate tax function keeps up with the current tax system. We have put together this guide to enlighten corporate businesses in Singapore on the country’s taxation system. Continue reading to see the tax rate for every corporation doing business in Singapore.
The cost of a corporate tax varies across each country. In Singapore, corporate taxes are paid to the Inland Revenue Authority of Singapore (IRAS). Corporate income taxation can be categorized into 3 classes: one tier, territorial-based tax, and the flat rate. We will give a detailed discussion on these categories in a later text.
A corporate tax is defined as a tax imposed on a company’s net chargeable income. Singapore business tax rate is calculated and paid from the company’s net chargeable income, including the amount made from sales and revenue. Cost of goods and expenditure, tax allowable administrative expenses, and other tax allowable operating costs are subtracted from the total income to get the net chargeable income.
The single-tier dividend system is a corporate taxation system that has been in operation for many years in Singapore. In this practice, all your company’s profit is taxed just once, and all the proceeds paid to shareholders are exempted from additional taxation. In the one-tier corporate taxation system, income is taxed at the corporate level and is the only tax required. The one-tier corporate tax system is a simple taxation system that reduces administrative and compliance costs for the company. While in a two-tier system, company taxation is drawn from the company’s income and also from the dividends shared with stakeholders.
A flat-rate company taxation system refers to the tax rate applied to all income levels. In such a situation, companies with a low income are taxed at the same rate as those with a high income.
In the territorial based taxation system, companies pay taxes to the country they do business in. This taxation excludes profits that multinational companies earn in other countries and focuses mainly on the income made in the resident country. On the other hand, a worldwide-based taxation system requires companies to pay taxes on worldwide income. The worldwide tax system taxes all domestic-source income together with income of foreign sources from the same resident company.
Singapore makes use of a one-tier, territorial based system of taxation. Companies in Singapore are mainly taxed with the income earned domestically in Singapore. Profits, dividends, and services’ income earned overseas by the same company are not taxed. Although the terms are relatively simple, territorial taxation is more complex and contentious. Several factors determine the origin of the income, such as the nature of the profit and the nature of the transaction that led to that profit.
The Inland Revenue Authority of Singapore (IRAS) is the mandated governing body responsible for charging and collecting all taxes. IRAS also represents the country in international tax treaty negotiations and helps the government draft tax legislation. The IRAS performs valuation assessments for transactions related to properties in the country.
In summary, the corporate tax rate is conducive for business and limited liability companies trading in Singapore. Some of the key features of the Singapore taxation system include the following:
-
- Single-tier taxation system
- Territorial taxation
- No overseas income taxation
- No dividend income tax for shareholders
- Extensive bilateral treaties to avoid double taxation
- Numerous tax relief incentives
Singapore corporate tax rates are capped at 17%. This low taxation system has continued to encourage more investors to establish businesses in Singapore from around the world. Companies are also entitled to certain tax deductions if they meet prescribed criteria set by relevant authorities. Income obtained from another country and not received in Singapore is not taxable, and individuals do not have to pay Singapore business tax on capital, dividends, and gains.
Other types of taxes in Singapore:
Withholding tax is a levy collected on income earned by a person who is a non-tax resident of Singapore.
Payments such as interest payments, management fees, royalty payments, and rents are all subjected to taxation by withholding tax. In addition, non-resident employees of a company and non-resident partners in Singapore are liable to payment of withholding tax. The type of payment involved will determine the withholding tax rate to be paid.
All properties in Singapore are liable for taxation, known as property tax. Warehouses, houses, commercial buildings, offices, and vacant lots are all included in the fray. The taxation of properties is done yearly at about 10%. However, you can have this rate reduced In Singapore if you meet certain conditions of the owner-occupier rate. In addition, some conditions, such as long-term vacancy, may also warrant a reduction in property tax.
Goods and services tax is commonly known as value-added tax in some countries. It is indirect taxation that is levied on goods and services purchased by consumers. Singapore’s goods and service tax rate is currently at 7%.. Goods and services delivered from a country outside Singapore to another country outside Singapore are excluded from this taxation.
Any property you buy in Singapore will usually lead to additional payments. One of such additional payments is stamp duty.
Stamp duty is the taxation levy on documents related to the leasing or purchase. It is also payable to the IRAS. Therefore, all property transactions involving buying and selling are subject to stamp duty in Singapore.
While no levy is directed to exported products from Singapore, custom duties are levied on a small number of items such as automobiles, tobacco, and other cash crops. The income tax is usually charged in different proportions to the commodity’s price.
Singapore has a progressive personal tax system. The system implies that the tax rate is directly proportional to the individual’s income. As a result, much personal income, such as dividends, estate duty, and capital gains, is not liable to taxation.
The Singapore government has put in place some incentives to encourage businesses and investors. Some of the key incentives and schemes that have been organized include:
The pioneer incentive is usually awarded to encourage the founding and growth of businesses and companies in Singapore. The chosen pioneer company will be given a full tax exemption for 15 years.
These royalties have been put in place to reduce the cost of manpower training, investment in equipment, and professional service through grants. This incentive provides partial tax exemption for a royalty payment or technical assistance fees that are payable to a non-resident in Singapore.
A regional and international headquarters incentive has been put in place to award the best qualified company who has chosen Singapore as their headquarters or regional head office. This award further encourages companies to build their company headquarters in Singapore.
Investment allowance is capital given to reduce the cost of acquiring equipment within a specified period. It is also presented to companies investing in new equipment as a tax reduction scheme.
SJH Advisory is an experienced tax service provider firm in Singapore. We understand the unique tax concerns of corporations and the need for a closely controlled, incorporated approach to corporate income tax. We use our experience and understanding of tax laws, tax technology, and tax processes to create successful tax results concerning your business operation and needs.
Our corporate tax team gives relevant advice to organizations and provides adequate tax support to enable compliance with the law in Singapore.
Frequently Ask Questions
Every company must pay its income tax at least one month after the date of the notice. Failure to do so may attract serious penalties. If the tax is not quickly paid by the due date, a penalty of 5% payment is added. Subsequent failure to pay the tax will attract a monthly fine of 1% penalty as long as the tax is not paid.
More so, an individual or company who refuses to pay their tax for a long time might be sanctioned by the IRAS. These sanctions may include:
- Travel restriction order
- Legal actions or summons
- Directives to bank or lawyer for the debt to be paid
- Closure of company or business
The due date for filing of ECI is within three months from the company’s financial year end and corporate tax by November 30. For a corporate company tax filing, the company has to file a complete set of documentation. This includes audited/unaudited accounts, tax computation, and Form C/Form C-S/Form C-S (Lite). Form C/Form C-S/Form C-S (Lite) serves as the company’s declaration of income.
The Singapore corporate tax is filed yearly. The basis period for each assessment year refers to the financial year ending in the preceding year.
In Singapore, taxation is imposed on net chargeable income made by a company. The tax rate is 17% of the company’s net chargeable income. Sometimes a company may earn income from different streams, which are taxable at different rates. This usually results in confusion in tax calculation and incorrect taxation flags.
To calculate your taxable income, subtract the tax allowable total expenditure from the total taxable sales or income. Your payable tax should be 17% of the net chargeable income.
i.e. Corporate tax = net chargeable income x corporate tax rate (17%)
Suppose you run a business in Singapore where you are the sole owner of the business. Your business income will be regarded as part of your personal income. In this case, personal income tax rates will apply. Doing business and earning in Singapore makes you liable to an income tax. Your income tax will be imposed based on salary, business profits, interests from deposits, and other income sources. In Singapore, sole proprietors can also claim tax deductions and tax relief which the Singaporean government has provided.
The bookkeeping and financial accounting aspect of a business are not easy, even for the most talented group of ownership. In modern-day business, you can now hire or outsource your professional corporate service to help you handle any aspect of your business. Working with credible accounting firms in cases where the hands of the in-house accountant are full makes a lot of sense.
One advantage of opting for a corporate tax service firm is that the cost of running such a business is significantly low compared to when you use an in-house method. Not only does it reduce cost, it also saves time. Hire a tax professional, a leading corporate accounting service firm in Singapore.
It is the duty of the company’s director to ensure all matters relating to corporate tax liability are settled. The director of the company will ensure the accountant has prepared the taxation account. The responsibility of ensuring the taxes are paid and the right amount is calculated rests on the company’s director.
The director will ensure an error-free payroll system in the disbursement of salaries for workers and that the right percentage of taxes (17%) and fees have been deducted.
Are you in need of corporate tax services in Singapore? Contact SJH Advisory now, and our experts will take away all your tax filing and payment stress.
Singapore is a tax haven because the tax rate is one of the lowest globally. It also provides tax benefits to foreign offshore companies.
The tax authority in Singapore is the Inland Revenue Authority of Singapore (IRAS). The authority is responsible for the tax administration of the country.
Every private limited liability company, LLP, sole-proprietors, and partnership in Singapore is obligated to abide by the guidelines and policies of IRAS. Any act of non-compliance would result in the regulatory body taking disciplinary measures in the form of court proceedings or penalties.
Limited company should submit completed Profits Tax Return, audited financial statements and Profits Tax computation report.
SJH Advisory can help you to prepare accounting and tax documents and liaise with auditor.
The First Profits Tax Return will be issued after 18 months from the date of incorporation. Please contact SJH Advisory for further details.
SJH Advisory can provide tax consulting to you and act as your tax representative to handle tax issue on your behalf.
Contact Us
If you have any enquiries, please feel free to contact us. We will answer your question as soon as possible, Thank You!
If you have any enquiries, please feel free to contact us. We will answer your question as soon as possible, Thank You!
