To maintain a business-friendly environment in its state and remain competitive in the South-East Asian market, Singapore’s Government has implemented several tax exemption schemes. Tax authority in Singapore, the Inland Revenue Authority of Singapore (IRAS), have put in place dedicated tax reliefs for startup companies to promote entrepreneurship and attract foreign investors.
Tax Exemption Scheme for New Start-Up Companies
To qualify for this scheme, the company must satisfy the following conditions:
The exemption is for the company’s first three consecutive YAs. The first YA is the YA relating to the basis period during which the company is incorporated. The first YA of a company depends on the financial year end chosen and the closing date of the first set of accounts, which means that two companies incorporated on the same day can have a different first YA.
It was announced in Budget 2018 that the tax exemption under the scheme will be revised. This change will affect all qualifying companies from YA 2020 onwards. The tax exemptions are the following:
YA 2020 onwards:
YA 2019 and before:
Partial Tax Exemption for Companies (PTE)
All companies including companies limited by guarantee are eligible for PTE, unless they have already claimed the Tax Exemption Scheme for New Start-Up Companies.
It was announced in Budget 2018 that the tax exemption under the scheme will be revised, beginning YA 2020 for all qualifying companies. The tax exemptions are the following:
From YA 2020 onwards:
YA 2019 and before:
The normal chargeable income refers to income to be taxed at the prevailing corporate tax rate.
To claim tax exemptions, you have to complete the relevant sections of the Estimated Chargeable Income (ECI) form and income tax return (Form C/C-s).
Singapore has one of the lowest tax rates in the world, and the country also provide several tax incentives and cash grants to help companies grow and maintain a favorable business environment. If you are interested in starting your business in Singapore, Ace Success can help you with your incorporation and a number of corporate services like corporate tax computation and filing.