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Corporate Tax in Singapore is imposed on the income of all corporate bodies in Singapore. A company generating income in Singapore is subject to corporate tax. The company will also be taxed, if it generates income from overseas but receives it in Singapore.
Tax residence status of a company
A company will be regarded as a resident in Singapore, if it's business is controlled and managed in Singapore. The resident company in Singapore needs to pay tax at a flat rate and can enjoy tax rebates.
Singapore Corporate Tax System
The government of Singapore follows a one-tier corporate tax system. Under one-tier corporate tax system, the company needs to pay tax on it's normal taxable income and in that case, it will be treated as a final tax. The shareholders need not pay taxes on dividend income.
Corporate Tax Rates
The newly established companies in Singapore do not need to pay tax on their first 100K annual profits for the first three years. All other companies in Singapore need to pay 9% corporate tax rate for profits upto 300K.
Tax Exemptions
A company in Singapore will enjoy tax exemption on it's normal taxable income upto $1000,000 for each of it's first 3 successive years of tax filing.
Eligibility: Full Corporate Tax Exemption
To be eligible for getting full corporate tax exemption, a company must be incorporated in Singapore. The other eligibility criteria are as follows:
The company needs to be a tax resident in Singapore for a particular year of assessment.
The company should have less than 21 shareholders throughout the basis period of assessment.
Partial Tax Exemption
All companies in Singapore are qualified for partial tax exemption on taxable income upto $300,000.
Chargeable income for first $10,000: Tax rate is 4.5%
Chargeable income for next $290,000: Tax rate is 9.0%