Guide to Corporate taxes in Singapore

The simplicity of setting up a business operation in Singapore has attracted many foreign companies to conduct business in the country. Another prime attraction for foreign companies is the liberal tax policy that provides a lot of tax incentives to businesses. Its comprehensive double-tax treaties, one tier-tax system, free capital gains tax, tax relief rules, and attractive personal and corporate tax rates have made Singapore an attractive destination for investors and businesses alike.

This guide presents a general overview of the different taxes that individuals and corporations need to pay when conducting business in Singapore.

Singapore’s Corporate Tax Rates

Nature of incomeTax rate
Corporate Profits up to S$300,0008.50%
Corporate Profits exceeding S$300,00017%
Capital gains accrual of a company0%
Shareholders’ dividend distribution0%
Income from foreign sources not brought in to the country0%
Income from foreign sources brought in to the country0-17% depending on cases

Basic Facts about Singapore’s System of Income Tax

Territorial Tax

The basis of Singapore’s taxation is territorial, meaning, income derived within the country, Incomes from foreign sources that are remitted into the country are subject to tax unless it had already been taxed in the originating country. The tax rate for income generated or repatriated to Singapore is 15 percent. Tax on profits may vary or can be subjected to other rules as the tax system is applied on a per-scenario basis.

    Maximum 17% corporate tax rate

    The maximum corporate tax rate in Singapore is 17%. This competitive rate makes Singapore an attractive investment haven for foreign companies. As it follows a single-tier tax system, dividends of shareholders are exempted from taxes.

      Maximum personal income tax 20%

      Residents pay a maximum of 20% in personal taxes, whereas non-residents’ tax is pegged at 15 percent

        GST of 7%

        Goods and Services Tax was introduced by Singapore authorities in 1994 as a way to augment government income

          Withholding taxes

          Withholding taxes are applied to non-residents for fees on royalty, movable property lease, director’s fees, and managerial or technical fees

            DTA Agreements

            50 comprehensive bilateral tax agreements have been entered into by the Singapore government to minimize tax burdens of Singaporean companies

              Corporate tax filing timeline

              Estimated Chargeable Income (ECI) filing

              ECI means Estimated Chargeable Income. It is an estimate of company's chargeable income for a Year of Assessment.
              All companies have to submit their Estimated Chargeable Income (ECI) within three months from the closing of their accounting year.
              The ECI needs to be reported even if a company estimates its chargeable income as zero. Once the ECI is filed, IRAS will send a Notice of Assessment to the company and your company will need to pay the taxes. If there is a significant difference between the ECI provided and the chargeable income reported in the Form C/ Form C-S (Final return), IRAS may require the company to provide an explanation.
              Figures reported in ECI are based on approximate figures of your accounts.

                Form C/ C-S filing

                By November 30th of the assessment year you are required to file a form C / C-S for your company. This can be called as a final return submission. For most of the small organisations the amount of income reported in ECI and in form C is same. However if there are differences then additional tax may need to be paid. The figures reported in form C / C-S are based on finalised figures of your accounts.

                The secretarial firm you engage for incorporation of your company will be able to provide services for ECI and form C / C-S filing.

                  Tax-governing Body in Singapore

                  Matters involving individual and corporate taxes are governed by Income Tax Act of Singapore. This law empowers the IRAS or Inland Revenue of Authority of Singapore to implement tax measures in the country. This government body is known for its efficiency in managing, collecting, and effective administration of tax-related transactions.

                  Aside from its tax collection duties, IRAS also work closely with the Ministry of Finance in formulating tax policies, monitoring of external economic developments, and identifying tax measures that can be reviewed and changed. It also acts as the country’s representative in tax treaty negations, as well as advisor on property valuation and tax legislation.