General tax obligations (from IRAS)

Corporate tax:

Under Singapore's tax laws, a company means any company incorporated or registered under any law in force
inside or outside Singapore.

Your company will be taxed on any income accruing in or derived from Singapore or received in Singapore from
outside Singapore, regardless of your company’s tax residence status in Singapore

Imputation System vs One-Tier Corporate Tax System

The One-Tier Corporate Tax System

With effect from 1st January 2003:

Singapore adopts a one-tier corporate tax system. Tax paid by a resident company on its chargeable income is
final and all dividends paid are exempt from tax in the hands of its shareholders.

The Imputation System

Before 1st January 2003:

Singapore adopted an imputation system. Under the imputation system, tax assessed on a Singapore-
resident company in respect of its normal chargeable income are passed on as tax credit to its shareholders upon
distribution of dividend.

Differences between One-Tier Corporate Tax System and Imputation System

Full Imputation System One-Tier Corporate Tax System

(for Singapore resident companies only)
Tax payable on normal chargeable income is not a final
tax (i.e. shareholders will still be taxed on the dividend
income).
Tax payable can be passed to shareholders as tax credits
on payment of dividend by way of the Section 44
account mechanism (franked dividends).
Shareholders are taxed on gross dividend and tax
credits are given.
(Applies to all companies)
Tax payable on normal chargeable income is a final
tax (i.e. shareholders will not be taxed on the
exempt one-tier dividend income).
Tax assessed on or after 1.1.03 will not form part of
the Section 44 balance as at 31.12.02.
Dividend paid out of after tax profit will be exempt
from tax in the hands of shareholders (exempt one-
tier dividends).

Individual Income Tax

1. What is a partnership?
A partnership is a legal relationship between two or more persons who carry on a business with the object of
making profit and sharing it between them.
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2. Will there be any tax on the partnership?
As a partnership is not a person in law, the income obtained from a partnership cannot be assessed under the
partnership’s name. The share of adjusted profit/loss from the partnership will be assessed under the individual
partners’ names and each partner will be taxed accordingly.
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3. Who is the precedent partner?
The precedent partner is the partner who, among all the partners present in Singapore, is the first named in the
Partnership Agreement. If there is no Partnership Agreement, the precedent partner is a partner who is agreed
upon and appointed by the other partners of the partnership.
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4. What are the responsibilities of a precedent partner?
The responsibilities of a precedent partner include the following.

a. To declare the income derived by the partnership business from all sources in Form P.

b. To lodge, on behalf of other partners, any objection to the adjusted profit of the partnership computed by
IRAS.
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5. What if there is a change of partners?
When the precedent partner is changed, the new precedent partner must give us his full name, address and the
date when he becomes the precedent partner.

When a partner withdraws from the partnership or leaves Singapore, the precedent partner must inform us act in
writing.

Also info on GST