Singapore Income Tax Guide

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Singapore Corporate Tax Guide

Singapore is often cited as the leading example of countries that continues to reduce corporate income tax rates and introduce various tax incentives to attract and keep global investments. Singapore has a single-tier territorial based flat-rate corporate income tax system. Effective tax rates as one of the lowest in the world and the general “business friendliness” of Singapore are the two important factors contributing to the economic growth and foreign investment into the city-state.

1 Single-tier income tax system (no double tax)

Since January 1, 2003, Singapore has adopted a single-tier corporate income tax system, which means there is no double-taxation for stakeholders. Tax paid by a company on its chargeable income is the final tax and all dividends paid by a company to its shareholders are exempt from further taxation.

2 Corporate income tax rates and general tax exemptions

1 Highest Tax Rate

Singapore’s headline corporate tax rate is a flat 17%. In order to make Singapore as an attractive investment destination, income tax rates in Singapore have been going down consistently as seen below.

|1997-00 |2001 |2002 |2003-04 |2005-06 |2007-09 |2010-12 | |26% |25.5% |24.5% |22% |20% |18% |17% |

Headline income tax rate in Singapore as in many other jurisdictions does not necessarily provide an accurate indication of effective corporate tax rate. The effective rate is normally lower than the headline tax rate due to applicable tax exemptions and tax incentives, depreciation rules, etc.

2 General Tax Incentives

Listed below are general tax exemptions/incentives currently available to Singapore resident companies. Once these tax exemptions are applied to the taxable income, the effective income tax rate for small-to-midsize Singapore companies is reduced significantly.

0% tax on S$100K taxable...
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