Singapore has one of the most attractive and competitive tax regimes in the world where personal and corporate income tax rates are relatively low compared to other countries. In contrast to other countries, there is also no capital gains tax or inheritance tax or tax on foreign-sourced income for individuals in Singapore. This, along with an extensive network of double tax treaties, makes Singapore’s taxation system highly attractive for investors and families looking to relocate or do business in Singapore.
Our panel of legal experts is deeply versed in Singapore’s tax landscape. Through Advomi, they provide:
- Holistic Compliance & Planning: They ensure that your financial operations align seamlessly with local tax regulations.
- Expert Tax Advisory: From estimated chargeable incomes to intricate tax considerations, their guidance is comprehensive and tailored.
- Tax Exemption Facilitation: They streamline the application process for tax exemption schemes, ensuring clarity and accuracy in liaising with the Inland Revenue Authority of Singapore (IRAS).
- Accurate Tax Computation: Our panel of lawyers meticulously calculates tax obligations, optimising your financial position.
- Timely Filings: They vigilantly monitor and adhere to statutory filing deadlines, ensuring punctual submissions to IRAS.
Type of Income Tax
Corporate Income Tax
Tax on corporate income is imposed at a flat rate of 17% for both resident and non-resident companies and corporate income tax is assessed on a preceding year basis in Singapore.
Resident and non-resident companies that carry on a business in Singapore are taxed on their Singapore-sourced income when it arises and on foreign-sourced income when it is remitted to, transmitted or brought into Singapore. There is no capital gains tax in Singapore so gains on sale of fixed assets or gains on sale of foreign exchange on capital transactions are not taxable. Payments of a specified nature (e.g. interest, royalties and technical service fees) to a non-resident company or individual are subject to withholding tax in Singapore
To support entrepreneurship and grow local enterprises, the Singapore government has put in place certain tax reliefs for companies, namely the tax exemption scheme and partial tax exemption scheme.
- Tax exemption scheme
Qualifying companies eligible for the tax exemption scheme may enjoy the following exemptions for their first 3 consecutive YAs from YA 2020 onwards:
(1) 75% exemption on the first $100,000 of normal chargeable income; and
(2) a further 50% exemption on the next $100,000 of normal chargeable income. All new start-up companies are eligible for the tax exemption scheme except property development and investment holding companies.
- Partial tax exemption scheme
Under this scheme, all companies (including companies limited by guarantee) are eligible unless they are claiming the tax exemption for new start-up companies. Qualifying companies eligible for the partial tax exemption scheme may enjoy the following exemptions from YA 2020 onwards:
(1) 75% exemption on the first $10,000 of normal chargeable income; and
(2) A further 50% exemption on the next $190,000 of normal chargeable income.
Individual Income Tax
Your tax residency status will determine your income tax rates in Singapore. You are considered a tax resident for a particular YA if you meet the following conditions. Otherwise, you will be treated as a non-resident. Non-residents are taxed at a flat rate of 15% on their employment income or the progressive resident tax rates, whichever is the higher tax amount.
- Singapore Citizen/Singapore Permanent Resident who resides in Singapore (except for temporary absences); or
- Foreigner who has stayed/worked in Singapore:
- For at least 183 days in the previous calendar year; or
- Continuously for 3 consecutive years, even if the period of stay in Singapore may be less than 183 days in the first year and/or third year; or
- Foreigner who has worked in Singapore for a continuous period straddling 2 calendar years and the total period of stay is at least 183 days. This applies to employees who entered Singapore but excludes directors of a company, public entertainers, or professionals.