subject: You Need to Know About Singapore Corporate Tax [print this page] In case that a startup company did not meet these requirements, it will still enjoy reduced tax rates within the first three years of its operation. These incentives include a 4.25 percent tax rate for its first S$10,000 chargeable income and another 8.5 percent on its succeeding chargeable income of S$10,001-S$300,000.
Meanwhile, all companies, including those non-exempt companies, are subjected to 17 percent corporate tax after they have consumed their tax exemptions and incentives.
Currently, Singapore follows a single-tier tax system in which the taxes are only deducted at the corporate levels and do not cover the shareholder's dividends. In addition, the country has no capital gain tax to further attract more foreign businessmen and companies.
Some startup companies also enjoy tax incentives, usually in the form of reduced tax rates (5-10 percent) if they operate in any of these industries: offshore leasing, cyber trading, insurance, arts and antique dealing, commodity derivatives trading, international commodity trading, finance and treasury center, securities, pioneer, members of commodity futures exchange, trustee, and Asian currency unit.
In exchange for all these tax incentives, companies are subjected to strict requirements which can promote business transparency. For example, companies are required to submit their corporate income tax returns on or before 31 October. These documents should include the tax computation, director's report, and Form C.
However, small companies will be exempted from a tax audit if they will meet any of the following requirements: there are no more than 20 shareholders who are all individuals and not corporate entities; the business is dormant; or the business has annual revenue of less than S$5 million.
