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Corporate Tax in Singapore

Corporate Tax in Singapore

Singapore has created a taxation system friendly to foreign companies, and as an effect, foreign investments are contributing to the Singaporean financial growth. Starting with 1st of January 2003 the corporate income taxation is available under the single-tier measure; as such, stakeholders are exempted of double taxation procedures. Foreign companies can benefit of several tax exemptions and tax incentives and our law firm in Singapore can provide you with an in-depth presentation of the main legislative measures applicable in this situation.

Corporate income tax in Singapore

Foreign companies with operations in Singapore are taxed on the income at the rate of 17%, starting from 2010. Singapore has an attractive taxation system, which offers various tax exemptions. Regardless of the incorporation place, a company is considered  tax resident if the business management of the company is set up in Singapore. All companies are required to file for income tax return for the profits received in Singapore; in several cases, foreign earnings can be exempt of income tax and our law firm in Singapore can present to you the situations in which the exemption is applicable. 

For a new incorporated company, the government offers a tax exemption for the first $100,000 taxable income, which is applicable in the first three years of activity, if the company meets several conditions:

• the company is incorporated in Singapore;

• the company is a tax resident in Singapore;

• the company has a shareholder who owns at least 10% of the shares;

• the company has a maximum of 20 shareholders. 

Corporate income tax rates 

Singapore applies three types of taxes for the taxable incomeTaxable income of $100,000 is taxed at a 0% rate; in the first three years of activity, taxable income up to $300,000 is taxed at the rate of 8.5% and income which varies between $300,000 and $2,000,000 is taxed at a rate of 17%. After the first three years of tax filings, the corporate income is taxed at the rate of 8.5% for revenues of $0- $300,000, while the reported income of minimum $300,000 and maximum $2,000,000 is taxed at the standard rate of 17%. 

If you need further information on the corporate tax legislation, please contact our attorneys in Singapore