• Singapore Tax System

  • TAX RESIDENCY

    Tax Residency

    A company is considered to be tax resident in Singapore if its management and control is exercised in Singapore.

    Taxable Basis

    Singapore tax resident companies are taxed on a territorial basis which means that they are taxed on all income generated or accrued from Singapore and on all foreign income remitted or deemed remitted to Singapore.

    Singapore non-tax resident companies are taxed on income generated or accrued from Singapore.

  • TAX ADMIN

    Taxable Period

    The taxable period for a company in Singapore is either the calendar year or its accounting year.

    Tax Returns

    Every company needs to submit an annual tax return by 30th of November of the following tax year.

    Group tax returns are not allowed in Singapore.

    Tax Assessments

    The Tax Authorities may issue a tax assessment within 4 years from the end of the year in which the tax return is submitted.

  • CORPORATION TAX

    Corporation Tax

    Corporation tax is levied on taxable income at the rate of 17%. However, 75% of the first SGD 10,000 and 50% of the next SGD 290,000 are exempt.

  • DIVIDENDS

    Dividends from Foreign Investments

    Dividend income from foreign investments is exempt from taxation in Singapore if the foreign tax burden is at least 15% and tax has actually been paid in the foreign country. If the above conditions are not met then dividend income is included in the taxable income of the company for the year.

    Dividends from Local Investments

    Singapore adopts a one-tier taxation system, which means that all dividends are exempt from taxation in the shareholders' hands.

    Withholding Tax on Dividends

    No withholding tax is imposed on dividend paid by companies resident in Singapore either to local or foreign recipients.

  • INTEREST

    Interest Income

    Singapore-source interest income is taxable under corporation tax at 17%.

    Foreign interest income is taxable in Singapore when is remitted or deemed to be remitted in Singapore.

    Interest Expense Deductibility

    Interest expense is generally tax-deductible if incurred for the production of income.

    Withholding Tax on Interest

    Interest paid to non-residents suffers a 15% withholding tax.

    Interest paid to residents does not suffer any withholding tax.

  • ROYALTIES

    Royalty Income

    Singapore-source royalty income is taxable under corporation tax at 17%.

    Foreign royalty income is taxable in Singapore when is remitted or deemed to be remitted in Singapore.

    Royalty Expense Deductibility

    Royalty expense is generally tax-deductible for the paying company.

    Withholding Tax on Royalties

    Royalties paid to non-residents suffer a 10% withholding tax.

    Royalties paid to residents does not suffer any withholding tax.

  • TAX LOSSES

    Ordinary Tax Losses

    Ordinary tax losses can be carried forward indefinitely, provided that there is no ownership change of more than 50% between the loss-making year and the year of claim.

    Ordinary tax losses can be carried back for 1 year subject to a cap of SGD 100,000.

    Group Relief

    Group relief is available in Singapore whereby a Singapore Company is allowed to transfer its excess current year trading losses to another company within the same group if the following conditions are met:

    • group companies must be incorporated in Singapore.
    • group companies must be at least 75% owned by another company in the group that is incorporated in Singapore.
    • all companies must have the same accounting year.
  • CAPITAL GAINS

    Disposal of Shares by Foreign Shareholder

    The profit on disposal of a Singapore company by its foreign shareholder is exempt from taxation in Singapore.

    Capital Gains

    Capital gains are not taxable in Singapore.

    The disposal of shares is exempt from taxation if the holding company owns more than 20% of the share capital of company whose shares are being disposed and for a period of 24 months. If the above criteria are not met then a case by case review is made to determine the taxability of the capital gain i.e. whether the disposal is of a capital or revenue nature (badges of trade).

    Capital Losses

    Capital losses are not treated as tax-deductible since capital gains are not taxable in Singapore.

  • PARTNERSHIPS

    Partnership Profits

    Partnerships are treated as transparent entities for tax purposes which means that their profits are taxed directly in the hands of each partner.

  • BRANCHES

    Branch Profits

    A Branch is treated in the same manner as other types of companies in Singapore.

    There is no tax in Singapore on the remittance of the profit of a Singapore Branch to its foreign head office.

  • STAMP DUTY

    Stamp Duty

    Stamp duty is payable on financial instruments relating to stock and shares and immovable property in Singapore.

    The following rates apply:

    • Transfer of shares: 0.2% on the market value or value of consideration.
    • Transfer of real estate: 1% on the first SGD 180,000, 2% on the next SGD 180,000 and 3% thereafter.
  • CAPITAL DUTY

    Capital Duty

    There is no capital duty in Singapore.

  • GST

    Singapore levies Goods and Services Tax (GST) which is similar to VAT.

    GST Taxable Transactions

    Goods and Services Tax is levied on the supply of goods made in Singapore.

    GST Standard Rate

    The standard GST rate is 7%.

    GST Reduced Rate(s)

    The reduced GST rate is 0% for international services and exports.

    GST Exempt Transactions

    Certain financial services and the sale or rental of residential property is exempt from GST.

    GST Registration Threshold

    The registration threshold for Goods and Services Tax purposes in Singapore is SGD 1,000,000.

    GST Filing & Payment

    Filing of returns and the payment of Goods and Services Tax liability is made every 3 months.