Singapore offers a combination of a moderate nominal tax rate and a well-developed system of tax incentives, making company registration in Singapore an attractive solution for international tax planning.
Corporate Income Tax- The standard corporate income tax rate is 17% on company profits.
- Newly incorporated companies may qualify for the Start-Up Tax Exemption Scheme, which provides:
- 75% tax exemption on the first SGD 100,000 of chargeable income;
- 50% tax exemption on the next SGD 100,000 during the first three years of assessment.
- Other companies may benefit from the Partial Tax Exemption Scheme, which grants:
- 75% exemption on the first SGD 10,000 of chargeable income;
- 50% exemption on the next portion of income within the prescribed limits, significantly reducing the effective tax rate for small and medium-sized enterprises.
Taxation of Income and Distributions- Dividends: not subject to withholding tax and, as a rule, not taxed again at the shareholder level under Singapore’s one-tier corporate tax system.
- Capital gains: Singapore does not impose capital gains tax, making it suitable for holding and investment structures.
- Foreign-sourced income: subject to certain conditions (including tax residency status and repatriation rules), exemptions may apply to income received from abroad.
GST / VAT- Singapore applies Goods and Services Tax (GST) at a rate of 9% as of 2024.
- GST registration becomes mandatory once the statutory turnover threshold is exceeded, or it may be completed voluntarily – particularly relevant for companies working with local clients.
Reporting and Compliance- Each company must file annual financial statements and an Annual Return with ACRA, as well as a corporate income tax return with IRAS.
- Most companies are required to maintain full accounting records and retain supporting documentation; a statutory audit is mandatory once specific criteria are met.
- Failure to comply with filing deadlines and compliance requirements may result in penalties and restrictions imposed on directors.
This tax and reporting framework allows Singapore companies to be used as a
“white-listed” jurisdiction for international structuring, demonstrating transparency and regulatory compliance while optimising the effective tax burden.