Singapore has one of the most attractive taxation systems in the world. As a pro-business nation, its taxation system is designed to encourage local and foreign entrepreneurs and companies to invest in the country. Additionally, the Singapore government has introduced various schemes and incentives for startups, such as Productivity and Innovation Credit Scheme (PIC) and full tax exemption on the first SGD100,000 of their taxable income for the first three filing years. Here's a look at the different types of tax in Singapore.
The country adopts a one-tier corporate tax system. This means that the tax paid by a company on its chargeable income is the final tax. All dividends paid by a company are exempt from tax in the hands of the shareholders.
Since 2010, Singapore's corporate income tax rate has been pegged at a flat rate of 17%. However, there are various tax incentives, subsidies and schemes granted by the government for startups, which could lower the effective tax payable considerably. These include:
There is no tax on capital gain. Similarly, capital losses are not tax deductible in Singapore.
The income tax filing due date for Singapore companies is November 30. All taxes need to be paid within one month of receiving a Notice of Assessment.
Sole-proprietors and individual partners (including partners in Partnership, Limited Partnership and Limited Liability Partnership) in Singapore are taxed on his share of the income from the partnership based on his personal income tax rate. Where the partner is a company, its share of income from the partnership will be taxed at the corporate tax rate.
Introduced in 1994, the Goods & Services Tax (GST) is a tax on goods and services produced in Singapore or imported into Singapore, and are purchased and consumed locally.
Basic information on GST:
A tax resident is:
The prevailing rates for a tax resident are as follows:
|Personal Income Tax in Singapore|
|Income||Tax Rate (2016)||Tax Rate (2017)|
|Tax rate on first $20,000||0%||0%|
|Tax rate on next $10,000||2%||2%|
|Tax rate on next $10,000||3.5%||3.5%|
|Tax rate on next $40,000||7%||7%|
|Tax rate on next $40,000||11.5%||11.5%|
|Tax rate on next $40,000||15%||15%|
|Tax rate on next $40,000||17%||18%|
|Tax rate on next $40,000||18%||19%|
|Tax rate on next $40,000||18%||19.5%|
|Tax rate on next $40,000||18%||20%|
|Tax rate on above $320,000||20%||22%|
Be sure to pay the right amount of tax for your company or your personal income tax! Contact us for a consultation today.