Updated: Aug 29
Corporate Tax Rates
Tax Rates and Corporate Income Tax Rebates for both local and foreign companies.
Companies can enjoy the partial tax exemption.
Partial Tax Exemption for Companies
Chargeable income | % exempted from Tax | Amount exempted from Tax
First $10,000 @75% =$7,500
Next $190,000 @50% =$95,000
Total $200,000 =$102,500
A company is taxed at a flat rate of 17% on its chargeable income regardless of whether it is a local or foreign company.
Corporate Income Tax (CIT) Rebate
Companies are granted a 25% Corporate Income Tax Rebate capped at $15,000.
Example: Company with income taxable at 17%
Chargeable income (after exempt amount)
Tax payable at 17%
Less: Corporate Income Tax Rebate ($85,000 x 25%, restricted to cap of $15,000)
Net tax payable
Dividends are profits you receive from your share of ownership in a company, which may be paid out to you in cash or in kind. For example, a company may pay its shareholders dividends in the form of company's shares.
Tax Treatment of Dividends
Under the one-tier corporate tax system, shareholders will not be taxed on dividends paid by a Singapore resident company.
Generally, the following dividends are not taxable:
Dividends paid by a Singapore resident company under the one-tier corporate tax system except co-operatives;
Foreign dividends received in Singapore by resident individuals;
Income distribution from Real Estate Investment Trusts (REITs), except distributions derived by individuals through a partnership in Singapore, or from the carrying on of a trade, business or profession in REITs.
Taxation of Foreign Interest Income
Foreign-sourced interest is taxable in Singapore when it is remitted or deemed to be remitted into Singapore.
Foreign income refers to income derived from outside Singapore. Generally, such income is taxable in Singapore when remitted to and received in Singapore.
Income Received from Abroad
Under Section 10(25) of the Income Tax Act, income from outside Singapore is considered received in Singapore when it is:
a. remitted to, transmitted or brought into Singapore;
b. used to satisfy any debt incurred in respect of a trade or business carried on in Singapore; or
c. used to purchase any moveable property (such as equipment, raw material etc.) brought into Singapore.
As an administrative concession, foreign income which is applied towards overseas investments without being repatriated to Singapore will not be treated as having been received in Singapore under section 10(25) at the point of reinvestment. This means that the taxing point of the foreign income is deferred till when the investment is realised and the proceeds are brought into Singapore.
If you are subject to tax on foreign-sourced income, you will continue to be entitled to claim tax reliefs or credits available under section 50, 50A or 50B of the Income Tax Act in respect of the foreign tax paid or payable on such income.
Gains from Sale of Property
Generally, the gains derived from the sale of a property in Singapore are not taxable as it is a capital gain. However, gains from "trading in properties" may be taxable.
Taxable Gains from Sale of Property
The gains may be taxable if the individual buys and sells property with a profit-seeking motive, or deemed to be trading in properties. Whether a person is deemed to be carrying on a trade will depend on individual circumstances. Some criteria used to assess if you are trading in properties are as follows:
Frequency of transactions (buying and selling of properties);
Reasons for acquiring and selling of property;
Financial means to hold the property for long term; and
Reporting Taxable Gains
You must declare taxable gains from the sale of property under 'Other Income' in your tax form.
Gains from Sale of Shares and Financial Instruments
Generally, profits or losses derived from the buying and selling of shares or other financial instruments are viewed as personal investments. Payouts from insurance policies are also not taxable as they are capital receipts.
These profits are capital gains and are not taxable. You need not report such gains in your tax return.
Gains on Sale of Fixed Assets
Gains on sale of fixed assets are capital gains. Capital gains are not taxable.
Goods & Services Tax (GST) on Transferring Businesses
When a business is transferred, business assets are usually transferred. This is similar to a sale or disposal of business assets. The GST-registered transferor has to account for GST on the supply.
How Bestar can Help
Bestar is a full-service accounting firm that can help companies with all aspects of their taxes, including:
Tax compliance: Bestar can help companies ensure that they are compliant with all tax laws and regulations. This includes filing tax returns on time and accurately, as well as making timely tax payments.
Tax planning: Bestar can help companies develop tax plans that minimize their tax liability. This includes identifying tax deductions and credits that the company may be eligible for, as well as structuring their business in a way that minimizes their tax exposure.
Tax audit representation: If a company is audited by the tax authorities, Bestar can represent the company in the audit process. This includes gathering documentation, responding to audit inquiries, and representing the company at audit hearings.
In addition to these services, Bestar can also provide companies with advice on a variety of other tax-related matters, such as:
Tax due diligence: Bestar can help companies conduct tax due diligence on potential acquisitions or investments. This includes reviewing the company's tax history and identifying any potential tax risks.
Tax restructuring: Bestar can help companies restructure their business in a way that minimizes their tax liability. This may involve changing the company's legal structure, transferring assets to or from the company, or entering into tax-planning arrangements.
Tax dispute resolution: If a company has a tax dispute with the tax authorities, Bestar can help the company resolve the dispute. This may involve negotiating a settlement with the tax authorities, representing the company in court, or appealing an adverse tax decision.
Bestar is a trusted advisor to businesses of all sizes. With its experienced team of tax professionals, Bestar can help companies minimize their tax liability and comply with all tax laws and regulations.
Here are some specific examples of how Bestar has helped companies with their taxes:
Bestar helped a small business owner identify several tax deductions that they were previously unaware of. This resulted in a significant tax refund for the business owner.
Bestar helped a medium-sized company restructure their business in a way that minimized their tax liability. This resulted in a reduction in the company's annual tax bill by several hundred thousand dollars.
Bestar represented a large company in a tax audit by the IRAS. The audit was successfully concluded with no additional taxes owing.
If you are looking for help with your company taxes, Bestar is a great resource. Contact Bestar today to learn more about how we can help you.