Corporate Tax in Singapore

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Corporate Tax in Singapore

Disclaimer
Tax law is complex and every effort has been made to offer information that is current, correct and clearly expressed. The information in this summary is intended to be no more than a general overview of the position and certain details have been deliberately omitted. The contents of this page should not be taken as an authoritative statement of Singapore tax law and practice. Neither the author nor the publisher are responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. This text is not intended to render legal, accounting or tax advice. Readers are encouraged to seek professional advice concerning specific matters before making any decision.

The Inland Revenue Authority of Singapore (IRAS) website has full and up-to-the-minute information about major tax developments, understanding the Singapore corporate tax structure, withholding tax on payments to non-residents, reporting the estimated chargeable income (ECI) and assessments, payments, record-keeping and updating company particulars.

• For detailed information: Click here

Corporate Tax

Under Singapore's tax laws, a "company" means any company incorporated or registered under any law in force inside or outside Singapore.

• A company will be taxed on any income earned in Singapore or received in Singapore from outside the country, regardless of that company's tax residence status in Singapore.

The tax residence status of a company in Singapore depends on where the control of management of its business is exercised: A company is considered to be resident in Singapore if the control and management of its business is exercised in Singapore. A resident company is entitled to the benefits conferred under the Avoidance of Double Taxation Agreements (DTA) that Singapore has concluded with treaty countries.

• For information on DTA from the IRAS: Click here

For companies considered resident in Singapore tax is payable at a flat rate on normal chargeable income. There is also a system of rebates.

• For a table showing the prevailing rates and how rebates are calculated: Click here

Shareholders are not taxed on dividends paid to them out of after-tax profits.

Withholding Tax

A non resident is liable to pay income tax on Singapore-sourced income. If a person or a Singapore-registered company makes a payment of a specified nature to a non resident they are required by law to withhold a percentage of that payment and remit it to the Comptroller of Income Tax.

GST (Goods & Services Tax)

A business must register for GST if at any time at the end of a quarter their taxable supplies exceed S$1 million for a quarter and the immediate past three quarters, or if at any time if their taxable supplies are expected to exceed S$1 million for the next 12 months.

Taxable supplies include goods and services supplied in Singapore, goods exported from Singapore and International services, although these last two may be zero-rated under certain circumstances.

Registering for GST

If the company is required to register for GST, it must apply within 30 days of becoming liable. Penalties will be imposed for failing to register.

• For information from the IRAS on how GST affects the running of a business and how to bill customers: Click here

The rules on GST change frequently, so it is advisable to get up-to-date information from the IRAS website.

Cess

Cess is levied at the rate of one percent on all cessable items sold by tourist hotels, tourist food establishments and tourist public houses. IRAS administers and collects Cess on behalf of The Singapore Tourism Board (STB).

Cessable items include:

• Room occupied in hotel
• Sale of food or drink
• Admission charges
• Hire of coats and ties
• Sale of admission tickets or cover charge
• Corkage charge
• For detailed information on registering for Cess and how to make payments: Click here

Charities & Taxes

Any organisation that exists solely for charity activities must be registered under the Charities Act (more information is available from the  IRAS Commissioner of Charities). 

If the organisation is also an approved Institution of a Public Character (IPC) it may be eligible for tax deductible donations. 

• For more information from the IRAS: Click here

Further Information

• IRAS Contact telephone numbers
  Helpline: 1800 356 8611
  Fax: 6351 4358
• Accounting & Corporate Regulatory Authority (ACRA) has a list of useful brochures can be found on the website concerning all aspects of setting up or closing down a business in Singapore
• See the AngloINFO INFOrmation Page on Taxes: Withholding, Capital Gains, Trusts, Estate Duty, Stamp Duty
• See AngloINFO INFOrmation Page on Income Tax in Singapore
• See AngloINFO INFOrmation Page on Property Tax