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Useful Tax Information For Corporate in Singapore

Written by 
Sow Cheng

To attract and keep global investments, Singapore has implemented a low corporate income tax rates and various tax incentives that subsequently contribute to the economic growth.

Single-tier income tax system

Singapore has adopted a single-tier corporate income tax system since year 2003. That means the tax paid by a company on its chargeable income is the final tax and dividends received by the shareholders from the company will not be subject to tax.

Basis Period for Income Tax

Year of Assessment (YA) refers to the year in which income tax is calculated and charged. In Singapore, corporate tax income is assessed in the preceding year basis. For example, if the income is earned in the financial year 2018, it will be taxed in year 2019.

Tax Structure

The corporate income tax rate has been fixed at 17% since year 2010 for both Singapore tax resident and non-Singapore tax resident companies.
Tax Exemption for new start-up companies

Qualifying conditions for new start-up companies:

  • It must be incorporated in Singapore
  • It must be tax resident in Singapore for that YA
  • Throughout the basis period, there are 20 or less shareholders where
  1. all of the shareholders are individuals; or
  2. at least one individual shareholder holds at least 10% of the issued ordinary shares

The above tax exemption is however, not available to investment holding companies and properly development companies.

Corporate income tax (CIT) rebate*

Due date for tax filing

The companies in Singapore must file the income tax return by the statutory filing deadline which is 30 November every year.

Payment of Tax Liability

Notwithstanding any objection or appeal against the Notice of Assessment raised, the tax liability has to be paid within 1 month after the service of that Notice.

Objections to the Notice of Assessment raised

If the company disputes the assessment, an objection has to be made within 60 days from the date of service of the Notice of Assessment stating precisely the grounds of the objection. Otherwise, the assessment may be treated by the Comptroller as final.

Withholding Tax

Certain payment made to non-residents like interest, royalty, technical assistance, rental, directors’ fee, etc are subject to withholding tax requirements unless exempt under the double taxation agreement arrangement with various countries.
Withholding tax is not applicable on dividend payment.

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