subject: The Importance Of Knowing The Income Tax In Singapore [print this page] The Importance Of Knowing The Income Tax In Singapore
Singapore is a rapidly growing hub for business in Asia. Because of the country's intricate legislation that protects intellectual property while facilitating business ventures, Singapore is chosen by many entrepreneurs. Added to this is the favorable location of Singapore which is at the centre of the expanding Asia economy. Hence, businesses located in Singapore benefit from productive ties with the other tiger economies while maintaining the name of a reputable and trustworthy jurisdiction. Singapore's corporate tax policy further enhances it as an ideal location for company incorporation by implementing fair and competitive tax rates. It is through these reasons that Singapore has taken the forefront over the past decade as a globally recognized business nation.
By taking a look at Singapore's corporate tax policy it is possible to understand one of the many factors that contribute to Singapore's popularity with entrepreneurs.
In Singapore, foreign and local companies pay tax equally. At first glance, this may sound unfavorable, but in fact, Singapore favors its own businesses as it does offshore companies, thus the entrepreneurial culture that exists within Singapore.
All income sourced in Singapore or remitted into Singapore by Singapore companies are taxed. This means that a company that is incorporated in Singapore but operates most of its business with other Asian countries and receives its income overseas is legally not liable to tax in Singapore. Since business transactions are often more complicated, it is recommended that, in order to ensure compliance with the law, a professional services firm experienced in Singapore tax policy must be engaged.
Corporate tax policy in Singapore accommodates the general issues and needs of most newly incorporated companies and this is what contributed to the respect accorded to Singapore by entrepreneurs over the years. In order to facilitate the process of starting and growing a business from scratch, the Singapore government has implemented tax exemptions for new companies. Newly incorporated companies face costs, including the simple costs of registration, to the costs of hiring and building a company, and the costs of gaining a presence in the market. Most countries provide minimal resources to help these companies get started, and for that reason Singapore is a very welcomed exception.
The tax environment in Singapore is highly favorable to setting up a company without causing detriment to the social and economic environment the Singapore government provides for its people. With such low tax rates working effectively in a nation that maintains prestige, efficiency and high quality of life, many may begin to question the need for such high tax rates in other nations. Ultimately, tax benefits, amongst Singapore's many other impressive facets, provides a key selling point for entrepreneurs. Thus, it is not surprising to see that Singapore has become an important business centre not only in Asia but globally as well.
