Singapore Corporate Tax: Rebates and Exemptions in 2025

If you’re running a business in Singapore or planning to set one up, you may be aware that the standard corporate tax rate is 17%.

But did you know there are ways to lower your taxes further through rebates and exemptions?

In Budget 2025, the Singapore government introduced a corporate income tax rebate, designed to help businesses with their tax bills and cash flow for the Year of Assessment 2025. But that’s not all. Businesses can also benefit from permanent tax exemptions like the Start-Up Tax Exemption and Partial Tax Exemption.

In this article, we’ll guide you through:

✅How the 2025 corporate tax rebate works

✅How SUTE and PTE reduce your effective tax rate

✅Key differences between rebates and exemptions

✅Which companies qualify for each relief

✅Examples showing how tax savings add up

By the end of this guide, you'll understand how to optimise your taxes with rebates and exemptions so that you can free up your cash flow.

Singapore gives companies tools to reduce their corporate tax: rebates and exemptions.

A corporate tax rebate cuts the tax you owe for a specific year, usually announced in the government’s budget. A tax exemption reduces your taxable income over a longer period, as long as your company meets the eligibility rules.

Understanding the differences helps you plan your finances, manage cash flow, and see how much you can save. Here’s a quick overview:

In Budget 2025, the Singapore government introduced a corporate income tax rebate as a temporary measure to help businesses lower their tax liabilities and ease cash flow pressures for the Year of Assessment (YA) 2025.

The key details of the corporate income tax rebate for YA 2025 are as follows:

• 50% reduction on tax payable, capped at SGD 40,000
• An additional SGD 2,000 CIT Rebate Cash Grant for companies with at least one local employee who made CPF contributions in 2024 (disbursed directly to your company on a date determined by the Singapore authorities)

The rebate applies automatically to eligible businesses, which are active Singapore companies that have at least one local employee who made CPF contributions in 2024.

If your business meets these criteria, you won’t need to submit a separate application; the rebate will be applied when you file your Estimated Chargeable Income (ECI) or Form C / Form C-S / Form C-S (Lite) with the Inland Revenue Authority of Singapore (IRAS).

Corporate tax exemptions are permanent reliefs embedded in Singapore’s tax system, designed to help businesses lower their tax liabilities year after year. Unlike the one-off rebate announced in Budget 2025, exemptions like the Start-Up Tax Exemption (SUTE) and Partial Tax Exemption (PTE) continue to apply annually as long as businesses meet the eligibility criteria.

The sections below explain how SUTE and PTE work, and show how they can reduce your effective tax rate:

The Start-Up Tax Exemption (SUTE) is designed to help newly incorporated companies reduce their corporate tax in the first three Years of Assessment. By lowering the tax payable, SUTE gives start-ups the opportunity to reinvest profits into their growth rather than paying the full 17% corporate tax rate.

Under the SUTE scheme:

• 75% of the first SGD 100,000 of chargeable income is exempt from tax.
• 50% of the next SGD 100,000 of chargeable income is also exempt.

This can reduce a start-up’s tax bill by up to SGD 125,000 per year, making it easier to reinvest funds into the business.

After the first three Years of Assessment, companies no longer eligible for SUTE can benefit from the Partial Tax Exemption (PTE).

The Partial Tax Exemption (PTE) provides ongoing tax relief for companies that are no longer eligible for the Start-Up Tax Exemption (SUTE) or companies that were never start-ups.

It reduces the effective tax rate by exempting portions of chargeable income:

• 75% of the first SGD 10,000 of chargeable income is exempt from tax.
• 50% of the next SGD 190,000 of chargeable income is also exempt.

Under the PTE scheme, the maximum exemption per year is SGD 102,500.

We’ll walk you through a practical example of how the tax rebate and exemption can impact your overall tax payable.

Let’s assume your company has SGD 200,000 of chargeable income for the YA 2025, is eligible for the corporate income tax rebate, qualifies for the SUTE, and also meets the condition for the SGD 2,000 CIT Rebate Cash Grant.

The table below shows how your corporate tax is computed, taking into account both the SUTE and the YA 2025 tax rebate, including the cash grant.

So instead of paying SGD 34,000 (17% of SGD 200,000) in corporate tax, your company only pays SGD 8,375 thanks to the tax rebate and the SUTE tax exemption.