Ways to save on corporate income tax in Singapore 

Singapore has one of the lowest corporate tax rates in the world. This attracts business owners from all over the world toward itself. Either it’s about setting up a new business in Singapore or simply expanding it further, Singapore has one of the friendliest policies for all.

Singapore’s businesses get benefited from Singapore corporate tax rebates. It differs for years of Assessment. For the year of Assessment 2018, this rate is 40% of payable corporate tax and for the year 2019, it is 20% of corporate tax payable which crapped at S$10,000. It’s not just the addition of low Singapore’s Income Tax rates offered to the businesses, there are several grants and schemes given by the government of Singapore. These schemes support lessening the corporate tax rates even further. Five central schemes out of those are-

  1. Start-up tax exemption scheme and Partial tax exemption

The SUTE (start-up tax exemption scheme) was founded by the government of Singapore to energize entrepreneurship and the proliferation of regional corporations. Under the most updated iteration of SUTE, this was announced in the budget of 2018, the scheme exempts-

  • 75% on the 1st S$100,000 of a normal chargeable income of a start-up.
  • 50% on the next S$100,000 of normal chargeable income of a start-up.

Under this scheme, the term ‘start-up’ is defined as a business incorporated for no more than three years in Singapore.

To be eligible for the SUTE scheme, a business needs to- 

  • Be incorporated in the city itself
  • For the applicable YAs, be a tax resident in Singapore.
  • Be in any industry except property development and investment holding (for sale or investment purpose)
  • Throughout the applicable YAs, it should not have more than twenty individual shareholders. At least one of these individual shareholders needs to hold 10% or more of the shares of the company.

Businesses of Singapore that do not qualify for SUTE, majorly those which have been incorporated for more than 3 years, are in the property development industries and investment or have more than 20 shareholders can still qualify for the PTE. PTE stands for Partial Tax Exemption scheme. Companies that are expected under this scheme are-

  • 75% on the 1st S$10,000 of normal chargeable revenue
  • 50% on the next S$190,000 of normal chargeable earnings.
  1. Business and IPC partnership scheme 

This scheme grants a corporate tax deduction of 250% on qualifying expenditures incurred when their employees provide professional services or give services to identify IPCs (Institution of public character).

IPCs are registered or exempted charities in Singapore that can publish tax-deductible tickets for donations made to them. As compared to regular charities, they are of higher standards when it comes to regulatory compliance and governance.

There are many others including Pioneer Certificates Incentives and development & expansion incentive, double tax deduction scheme for internationalization, Regional Headquarters Award, and International Headquarters award. Your wish to incorporate company and leverage vast profits from this business-friendly land can be fulfilled effortlessly. Just visit Hey Sara and get an expert-driven registration, incorporation, and management process for your company.