Key Takeaways
Singapore's corporate tax rate for the fiscal year 2024 remains at a competitive 17%, keeping it an attractive destination for businesses.
Singapore offers various tax exemptions and incentives, up to 75% exemption for start-ups, among many others.
In 2024, new schemes and incentives were introduced, and others were adjusted. The start-up deductibles went from 100% down to 75% for the first 100,000 SGD. There’s also a rebate for Singaporean companies that contribute to the Central Provident Fund. There’s also an overseas cash donation deductible.
Starting a business in Singapore can be a complex process for new entrepreneurs, and it goes beyond simply incorporating the company. You will have to consider how to generate sales and keep clients happy whilst also making sure that you stay on top of your corporate income tax.
Due to its strategic location and favorable corporate income tax, it is extremely advantageous for international corporations to establish regional headquarters in Singapore. The CEO of the Boston Consulting Group Christoph Schweizer extolled Singapore as an ideal hub for doing business. An example of this move is articulated by the fintech giant behind AliPay, called Ant Group, founded by Jack Ma. Ant Group recently opened a new office in Singapore to set to expand its international offerings.
This guide will provide you with information as to why Singapore’s corporate income tax rates, tax schemes, incentives, and exemptions make it an attractive place to start a business for both local and offshore businesses.
What Are Corporate Income Taxes and Corporate Tax Rates?
A corporate income tax is a tax imposed on a company's profits by the government of the country in which it conducts business. The government collects these taxes as a source of revenue to oversee the infrastructure and growth of that country.
The corporate income tax rate refers to the total tax percentage payable to the government derived from your corporate income or taxable profits.
📌 Note: Corporate income tax is separate from your individual income tax because you will still be liable to pay taxes on your income.
Who Needs to Pay Corporate Income Tax in Singapore?
All Singapore-incorporated companies and foreign companies that have a branch office or subsidiary in Singapore are liable to pay corporate income tax.
As long as a company operates and generates income in Singapore, whether it is through trading or providing services, it will be liable to pay corporate income tax even if foreign-sourced income is remitted or deemed to be remitted to Singapore.
Types of Businesses Required to Pay Corporate Income Tax in Singapore
You might be wondering what types of businesses in Singapore will be required to pay taxes. They are split into 3 categories:
- Singapore resident companies
- Foreign companies with a permanent establishment in Singapore (such as a branch, office, or factory).
- Foreign companies with no permanent establishment in Singapore but still conduct business through services or rental income.
💡 Tip: Learn about the 9 basic requirements to incorporate a company in Singapore.
What Is the Current Corporate Tax Rate in Singapore and How to Calculate It?
For fiscal year 2024, the corporate income tax rate in Singapore is 17%. Singapore's flat and fixed tax rate makes it an attractive destination for businesses. To determine your business tax, follow these steps.
1. To determine your taxable income - First, calculate your gross income. Next, subtract your operational expenses to obtain your net profit or loss. Your taxable income, also referred to as chargeable income, is equivalent to this net profit or loss.
2. Determine your total deductions - Singapore provides various tax benefits, such as
exemptions, rebates, incentives, and deductions, that can help reduce your tax burden. These benefits can result in a substantial amount of savings that you can use to lower your tax liability.
For example, start-up companies can receive full or partial exemptions for up to three years. Additionally, there are tax deductions and incentives for business activities like research and development, investment in approved activities, or qualifying expenses.
Your taxable or chargeable income is calculated by adding up your exemptions, incentives, and deductions and then subtracting the total from your income. This gives you your net taxable or chargeable income.
3. Calculate the corporate tax - Here is the formula for calculating your corporate tax in Singapore
[Taxable income - (Exemptions + Incentives + Deductions)] x 17%
For example, Company X made a total of $1,000,000 profit in 2023. The total tax rebates, exemptions, incentives, and deductions came out to be $300,000. Its corporate tax calculation will be ($1,000,000 - $300,000) x 17% = $119,000.
🔎 Tip: You can also calculate your gross tax payable and effective tax rate using this free tax calculator.
How Singapore's Corporate Tax Rate Fair Against Others in the APAC Region
| Country | Corporate Tax Rate | Remarks |
| Singapore | 17% | Singapore offers various tax incentives and schemes that might result in an effective tax rate lower than 17%. |
| Australia | 25-30% | 25% for small businesses with an annual turnover below AUD 50 million. |
| China | 25% | Certain industries and regions might have preferential rates. |
| Hong Kong | 8.25-16.5% | 8.25% on assessable profits of up to HKD 2M. 16.5% on assessable profits of more than HKD 2M. |
| India | 25%-40% | The lowest bound is for domestic companies with a turnover of less than INR 4 billion. There are additional surcharges that may apply, resulting in a higher effective tax rate. |
| Indonesia | 22% | There are additional schemes for companies listed on the stock exchange, that have an annual turnover of IDR 50 billion, and companies with a gross turnover of less than IDR 4.8 billion. |
| Japan | 21.37%-33.58% | Includes both national and local taxes. Up to 4 million yen is 21.37%. Over 4 million yen to 8 million yen is 23.17%. Over 8 million yen is 33.58% |
| Malaysia | 15-24% | 15% for small and medium-sized enterprises, and 24% for residential companies. |
| South Korea | 0%-24% | There may be additional local taxes levied by specific regions. |
| Thailand | 0-20% | There are different rates for companies in certain industries or engaging in certain activities. |
⚠️ Important: Over 140 countries have signed an agreement to introduce a 15% minimum tax rate for all multinational corporations with earnings above EUR 750 million, set to take effect in 2025.
Singapore's Tax Exemption Scheme and Incentives
There are various other tax benefits, partial exemptions, and rebates that companies can utilize to reduce their corporate income tax in Singapore.
The latest rebate available in 2024 is that up to 50% of your business’ payable tax can be rebated if you meet their conditions, mainly regarding Central Provident Fund contributions through local employees. The maximum rebate is SGD 40,000. There are also 100% deductible cash donations for overseas donations. All the details, and more, are on the Singapore IRAS website.
Here are the other common, longstanding exemptions:
1. Start-up Tax Exemption Scheme (SUTE)
Newly incorporated start-up companies can receive a 75% tax exemption for the first SGD 100,000 of taxable income and an additional 50% exemption on the next SGD 100,000. However, this scheme is only available to companies that meet specific qualifying criteria. Companies involved in property development and investment holding are not eligible for this tax exemption.
2. Partial tax exemption (PTE) scheme
If a company does not qualify for SUTE, it may still be able to participate in the Partial Tax Exemption program. This program offers a 75% exemption on the first SGD 10,000 of taxable income and an additional 50% exemption on the next SGD 190,000 of taxable income.
3. Development and Expansion Incentive (DEI)
These incentives are designed to encourage companies in the manufacturing, service provider, and international trade industries to expand their business operations in Singapore by offering tax benefits.
4. Research and Development Tax Incentives (R&D)
There are multiple tax incentives for Research and Development (R&D) activities, including the Research and Development Tax Deduction (RDD) and the Pioneer Certificate Incentive. These incentives provide further deductions for R&D expenses and tax exemptions.
5. Double Tax Deduction (DTD) for Internationalization Scheme
Singapore-based companies can claim a deduction for qualified expenses incurred during international business expansion activities through the Double Tax Deduction scheme. Such activities refer to overseas market development and investment in foreign subsidiaries.
6. Global Trader Programme (GTP)
The program's goal is to motivate companies to participate in global trading while having a regional headquarters or establishing a company in Singapore. It offers tax incentives, such as lower tax rates and special tax treatment.
Filing and Paying Corporate Taxes in Singapore
If you want to file for corporate income tax in Singapore, you will have to follow these steps:
1. Make your Financial statements and calculate your taxable income.
2. Fill out one of the following forms: Form C, Form C-S, or Form C-S (Lite). Form C should be used for companies with annual revenue higher than SGD 5 million, Form C-S for companies with annual revenue lower than SGD 5 million, and Form C-S (Lite) for companies with annual revenue of SGD 200,000 or less.
You can download these forms from the Inland Revenue Authority of Singapore (IRAS) website. You have the option of sending the forms by mail or submitting them online through the IRAS website.
3. Once you submit your tax return, IRAS will calculate the corporate income tax amount that you owe and issue a Notice of Assessment (NOA). The NOA will contain details of your total taxable income, tax reliefs, and the amount you need to pay.
You'll have a month to make the payment from the date of the NOA. It is possible to make the payment electronically via GIRO, Internet Banking, or at designated payment locations. It is important to note that late payment of taxes will result in penalties if you do not make the payment before the due date.
Final Thoughts
With a corporate tax rate of 17%, Singapore has become a highly sought-after destination for businesses. Thanks to its competitive tax rate and stable business environment, numerous international corporations and business owners have opted to establish or launch operations in Singapore.
If you are planning to move your business to Singapore, we recommend looking at some local business accounts to manage your business operations. At Statrys, we offer multi-currency business accounts for companies incorporated in Singapore, Hong Kong, and the BVI.
If you still have any questions, feel free to reach out to us at support@statrys.com or talk to our Live Chat support.
FAQs
What is the Singapore corporate tax rate in 2024?
The Singapore corporate tax rate in Singapore is a flat rate of 17%.
Who is subject to the Singapore corporate tax system?
What are some tax exemptions and incentives available to businesses in Singapore?
What companies are eligible for the partial tax exemption scheme?
What is the deadline to file ECI?
