All about Singapore's Corporate Taxation

Benefits of Hiring Professionals for Incorporation of Company in

Singapore

Benefits of Hiring Professionals for

Incorporation of Company in Singapore

People often have doubts regarding the taxation system of

Singapore. In this article all the major points, updates and
benefits have been listed. For further help you should take
accounting services in Singapore.
Steps to be Followed While Incorporation of
Company in Singapore

Singapore
Tax
Rates,
incentives and computation

As global boundaries are losing its

relevance, companies are choosing to
locate their business base in a
country that offers the best possible
tax structure that can positively
impact the profit margins. Singapore
has thus become a favorable spot for
foreign investors and hosts about
7,000 foreign companies on its land.

Much to investors delight, Singapore

had also adopted a slat single tier
corporate taxation since January
2003 making the structure very
simple and straight forward.

ingapore has evolved as an

investment destination for
foreign companies over the
last few decades. Two major factors
contributing to this is the ease of
doing business in Singapore and the
friendly corporate taxation of the
country. But if you want to conduct
business you will need a competent
accounting services in Singapore for
a hassle free experience.

Here are all the important

points that a company needs to
know about corporate taxation
and accounting services in
Singapore.

Singapores tax rates have seen a

consistent decline since 1997-2000
when it used to be 26%. It then
moved on to be 22% in 2003-04
which further reduced to various
levels and attained a flat tax rate @
17% which is currently prevailing.
This is by far one of the lowest tax
rate in the world attracting many
foreign investors.

Many incentives and exemptions are

also provided to start-up companies
to encourage them incorporate
business in Singapore. This brings
down the effect rate considerably.

The exemptions for start-up are

as below:-

Besides the above, a 30% tax rebate

can be availed by every Singapore
Company on corporate income tax
payable for YA 2016 & YA 2017. This
is subject to a maximum rebate of
$20,000. Such exemption was
declared recently in the Budget of
2015. For all the updates and changes
in the tax structure you should always
go for the best accounting services in
Singapore.

Tax benefits to resident

companies
Certain tax benefits only accrue to
Singapore resident companies. The
resident companies are eligible to the
tax benefits that accrue to start-up
companies making their effective tax
rates quite low. Section 13(8) of the
Income Tax Act also favors resident
companies by giving them special tax
exemptions on the incomes sourced
from foreign-sourced dividends,
foreign branch profits, and foreignsourced service income. Singapore
has signed certain tax treaties with
various countries and the benefits
conferred under the Avoidance of
Double Taxation Agreements can also
be availed by Singapore resident
company.

Income
level
Up to $
1,00,000
$1,00,000
$3,00,000

Tax
rate

Conditions
Company should be
0%
incorporated and tax
resident in Singapore
and
shareholders
8.50% should not exceed 20.
The exemption of no
tax up to $ 1,00,000
income gets over at
the end of 3 years of
operation and such
Above
income is also charged
$3,00,000 17%
@ 8.5 % tax post that
A company can be called a
Singapore
resident
company
provided
the
control
and
management of the company is
exercised in Singapore itself.

The Tax
Singapore

Treaties

of

Singapore has gone ahead and

finalized tax treaties with over 50
countries and the exercise to add
more countries is continuously
ongoing.
These tax treaties allow the
companies operating both in
Singapore and any of the 50 countries
avoid the losses caused by Double
Taxation on their income. The
treaties also encourage companies to

operate globally and Trans border

without the fear of having the same
income taxed twice in dual countries.

Difference in net income and

taxable income
Two kinds of incomes are taxable in
Singapore: Income that is generated in
Singapore
Income derived from other
countries but repatriated to
Singapore
However not the entire income
mentioned above might incur
taxation.
Many
exemptions
pertaining to specific trades , foreign
sourced
incomes
and
other
exemptions as defined by the
Singapore Income Tax Act are
excluded from taxable income.
Thus the net income is a combination
of business profits, dividends,
interests, premiums or any other
income while taxable income is net
income minus exemptions stated
under Income Tax Act. Taxable
income is the final income on which
tax is levied.

How are losses taxed?

Singapore laws allow the losses

incurred in a company to be carried
forward indefinitely subject to certain
conditions. Such losses can be
adjusted with the income earned in
any year (It is compulsory to adjust
losses against the first income
available in the company). Tax shall
be levied on such adjusted income
only. For further details it is best to
consult an agent or seek accounting
services in Singapore.

Income Tax Filing period and

due date
The assessment period for computing
taxation shall be the preceding year
of filing tax. For example, if a
company is filing tax on 30th
November 2015, the assessment
period shall be 1st January 2014 to
31st December 2014.
The due date for filing Corporate Tax
in Singapore is 30th November since
2009. While filing this tax, the
company has to submit the following
documents: Form C This declares the total
income generated within the
company

 Audited/Unaudited accounts
The accounts to be submitted
shall be audited or not shall
depend upon parameters laid
down as per statutory bodies
of Singapore.
Tax computation This shows
the calculation of net taxable
income. It contains details
showing the adjustments of
net profits or losses of the
company.

Withholding tax law

companies for some specific purpose,

a certain percentage of the payment
is withheld and paid to Income Tax
authorities. This withheld income is
known as Withholding tax.
Entrepreneurs who want to start a
business would have got a good
insight on the tax structure of
Singapore. If there is a need for
further clarification, it is best to seek
the best accounting services in
Singapore. The consultancies have all
the information you need and they
can help you run a seamless business.

This law is applicable to certain kind

of income generated by non-resident
companies only. While making
payments to the non-resident

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