Singapore Has The Third Lowest Corporate Tax In Apac
The global economic slow down has prompted governments across the world to reassess their tax policies
. Invariably the tax authorities have expanded the tax base by introduction of indirect taxes or by increasing the rates. At the least this years budget did not include any significant slash in corporate tax rates in Europe, the US or Latin America.
KPMG's 2009 Corporate and Indirect Tax Rate Survey revealed that Singapore's corporate tax rate which is 18% at present is ranked third lowest of 20 countries surveyed in the Asia-Pacific. The rate will be further slashed to 17% from the year of assessment 2009.
The Asia Pacific region has an average tax rate of 27.5% for the year 2009 and Singapores headline tax rate of 17% is significantly low. Moreover other strategic benefits such as single tier tax rates, absence of tax on capital gains, and an opportunity to operate in an environment which is in par with the developed nations makes Singapore an ideal place to do business. Singapore is also ranked as the best place in the world to do business in the World Bank's "Doing Business 2009" report.
The recent crackdown on tax havens by Organization for Economic Cooperation and Development (OECD) countries has been a cause of concern for Singapore which is alleged as a tax haven because of the low corporate tax rate. Singapore is also amending its tax legislations in line with the international standard set by the OECD to fight tax evasion across borders. The Group of 20 leading industrialized and emerging nations agreed in April to crack down on countries that failed to help in cross-border tax evasion cases. At the time, the OECD published a 'grey list' of more than 30 countries that had agreed to improve transparency but had not signed the necessary international accords, of which Singapore was one. To get on OECD's "white list of compliant Countries governments have to sign 12 bilateral tax agreements in line with the standard of tax information. Singapore currently has 11 such agreements and with the passing of compliant legislations it is expected that Singapore will also graduate to the White List by the end of this year.
It has been widely agreed by the enterprises that low tax is not the only factor that is luring international companies and investments to Singapore the country has a thriving business environment and an integrated enterprise eco system for businesses to grow. It provides other leverage such as a strategic location, operational efficiency, political stability and harmonious and high standards of living conditions.