Corporate Tax Rate in Singapore
Singapore has a flat corporate income tax rate of 17%. However, for newly incorporated companies, the start-up tax exemption (SUTE) scheme makes the effective corporate tax rate below 6% for annual profits of up to S$200,000.
| EXEMPTION FOR NEW STARTUPS – FOR FIRST 3 YEARS OF ASSESSMENT (YA 2018) | ||
|---|---|---|
| Chargeable Income ($) | Effective tax rate | |
| 100,000 | 0% | |
| 200,000 | 2.55% | |
| 300,000 | 3.40% | |
| 400,000 | 5.10% | |
| 500,000 | 7.20% | |
| 1,000,000 | 12.10% | |
| 2,000,000 | 14.55% | |
| 3,000,000 | 15.37% | |
| 5,000,000 | 16.02% | |
| 10,000,000 | 16.51% | |
| PARTIAL TAX EXEMPTION FOR ALL OTHER COMPANIES (YA 2018) | ||
|---|---|---|
| Chargeable Income ($) | Effective tax rate | |
| 100,000 | 4.85% | |
| 200,000 | 4.97% | |
| 300,000 | 5.02% | |
| 400,000 | 6.77% | |
| 500,000 | 8.82% | |
| 1,000,000 | 12.91% | |
| 2,000,000 | 14.95% | |
| 3,000,000 | 15.64% | |
| 5,000,000 | 16.18% | |
| 10,000,000 | 16.59% | |
*YA 2020 figures are subjected to 25% Corporate Income Tax Rebate capped at $ 15,000
To qualify for full tax exemption, the following conditions must be met by companies:
- Registered in Singapore
- Tax resident in Singapore for the YA
- Has no more than 20 shareholders during the YA where
- All shareholders are individuals holding shares in their own names OR
- At least 1 shareholder is an individual holding at least 10% of the company’s ordinary shares
Investment holding companies and companies engaged in property development activities can enjoy the partial tax exemption and Corporate Income Tax (CIT) Rebate at 25% capped at $15,000 for each YA.
Related Reading: Visual Guide on Filing Tax Returns
Singapore GST
The GST (Goods and Services Tax) is a consumption tax that is charged on
- the supply of goods and services in Singapore (paid to Comptroller of GST)
- importation of goods into Singapore (collected by Singapore Customs).
The GST rate in Singapore is 7%. All businesses with a taxable revenue exceeding S$1 million per year must compulsorily register for GST.
Businesses that do not meet this sum may still register for GST. It is advantageous for companies to register for GST when they are having considerable amount of input GST paid on their purchases and expenses, as they will be able to claim these input GST while submitting GST returns.
Related Reading: GST Registration and Filing Services
Singapore Personal Income Tax Rate
All income earned in Singapore is subject to tax. However, the country has one of the most attractive personal income tax rates in the world.
The rates vary for resident individuals and non-resident individuals.
Tax residents are:
- Singaporeans residing in Singapore
- Singapore Permanent Residents who has established a home in the country
- Foreigners staying in Singapore for 183 days or more in the year before the YA.
The tax rates for residents are as follows:
| INDIVIDUAL TAX RATES OF TAX FOR YEAR 2022 (YEAR OF ASSESSMENT 2023) | |||
|---|---|---|---|
| Chargeable Income | Income Tax Rate (%) | Gross Tax Payable ($) | |
| On the first On the next |
20,000 10,000 |
0 2 |
0 200 |
| On the first On the next |
30,000 10,000 |
– 3.5 |
200 350 |
| On the first On the next |
40,000 40,000 |
– 7 |
550 2,800 |
| On the first On the next |
80,000 40,000 |
– 11.5 |
3,350 4,600 |
| On the first On the next |
120,000 40,000 |
– 15 |
7,950 6,000 |
| On the first On the next |
160,000 40,000 |
– 18 |
13,950 7,200 |
| On the first On the next |
200,000 40,000 |
– 19 |
21,150 7,600 |
| On the first On the next |
240,000 40,000 |
– 19.5 |
28,750 7,800 |
| On the first On the next |
280,000 40,000 |
– 20 |
36,550 8,000 |
| On the first In excess of |
320,000 320,000 |
– 22 |
44,550 |
In addition, tax residents enjoy tax savings through tax reliefs, donations to IPCs (Institutions of Public Character) and certain expenses relating to the employment and business spend.
An individual is considered a non-resident for tax purpose if he is a foreigner who stayed or worked in Singapore for less than 183 days in the tax year. As a non-resident:
- 0 – 60 days – Employment income is tax exempt if the individual is here on short-term employment for 60 days or less in a year. This exemption does not apply for a director of a company, a public entertainer or exercising a profession in Singapore.
- 61 – 182 days – The individual is taxed on all income earned in Singapore (no personal reliefs apply). Income is taxed at 15% or the progressive resident rate, whichever gives rise to a higher tax amount.
- Director fees, consultant fees and all other incomes are taxed at 22%.
You take care of business. We’ll take care of your taxation needs.
File your tax returns with Singapore Company Incorporation, one of the leading tax agents in Singapore. Our professional taxation specialists will work closely with you to reduce your tax liabilies and maximise tax savings.