🇸🇬Singapore company

The base corporate income tax rate in Singapore is17%of chargeable income.

How chargeable income is calculated.

The tax base is calculated using standard logic:

Revenue−Allowable expenses=Chargeable Income

The key IRAS criterion is the"wholly and exclusively"test: an expense must be incurredwholly and exclusivelyfor the production of income. Expenses of a personal nature or unrelated to business are not accepted. Dual-purpose expenses (partly business, partly personal) are formally not accepted, although in practice IRAS often allows proportional treatment with justification.

Deductible:

• Office and workspace rental
• Salary and bonuses of directors and employees (if employment contract exists)
• CPF contributions for local employees
• Professional and legal services
• Business travel expenses with business purpose
• Entertainment expenses —50% of amountprovided business connection exists
• Capital Allowances on approved assets

Non-deductible:

• Expenses of a personal nature without business purpose
• Expenses related to production of non-taxable income (e.g., dividends from participation)
• Items with clear personal value without employment basis (gifts, luxury items)

Year of Assessment (YA).

Singapore operates on apreceding year basis: tax for a YA is assessed on profits of the financial yearended in the previous calendar year. Example: if the company's financial year runs from 1 January to 31 December 2024, the return is filed in YA 2025.

Loss Carry-Forward.Losses can be carried forward to future periodswithout time limit, provided the company's shareholder composition has not substantially changed.

Singapore applies theterritorial principle(territorial basis of taxation), enshrined inSection 10(1) Income Tax Act (Cap. 134). Tax is levied on:

1. income accruing in or derived from Singapore, and
2. foreign-sourced income received in Singapore.

This is not a "0% on everything outside" model — this is a system where the key considerations arequalification of income sourceandfact of remittance.

Determining income source.IRAS does not define "source" through a single formal criterion. Qualification is aquestion of fact, determined by the totality of circumstances of the specific transaction:

• Trading income:place of contract execution — where negotiations took place, terms were agreed, and contract signed
• Service income:place where services areactually rendered, not the location of the client
• Income from use of property:location of the asset or its use
• Interest:place of loan origination
• Dividends:jurisdiction of the paying company

Foreign income: remittance and exemptions.Income from outside Singapore is taxable only if it isreceived in Singapore. The concept of "receipt" is broadly interpreted underSection 10(25) ITA:

• transfer of funds to a Singapore account
• application of foreign income to discharge obligations in Singapore
• instruction for use of funds issued from Singapore (deemed remittance)

Section 13(7A)–(9) ITAprovidesfull exemptionupon remittance for three categories:

1. Foreign-sourced dividends
2. Foreign branch profits
3. Foreign-sourced service income

Exemption conditions (all simultaneously):

• income was subject to taxation in the jurisdiction of source (actual payment not required)
• headline tax rate in the jurisdiction of source — at least15%
• Comptroller satisfied that the exemption serves the taxpayer's interests

Singapore provides two partial tax exemption schemes: one for new companies, another for all others. Both applyautomaticallywhen conditions are met.

Start-Up Tax Exemption scheme.Applies during thefirst 3 years of assessment (YA).

Conditions:

• company is incorporated in Singapore
• company is a Singapore tax resident
• company has no more than 20 shareholders, at least one of whom is an individual holding ≥ 10%

Partial Tax Exemption (PTE).Applies toall other companies(after 3 years or not qualifying for Start-Up):

Singapore has no dedicated "reinvestment incentive" in the classic sense, but operates a system ofCapital Allowanceswhich delivers an economically similar effect.

If a company acquiresfixed assets used in the business(equipment, computers, furniture, etc.), the asset cost can bededucted from taxable profitunder accelerated or standard schedules:

• 1-year write-off— for assets costing up to S$30,000 (under simplified scheme)
• 3-year straight-line write-off— for most plant and machinery
• Standard depreciationat rates prescribed by IRAS

Funds reinvested in business assetsreduce the tax basein the year the asset is placed in service.

Goods and Services Tax (GST)— value-added tax applied to most goods and services. Current rate:9%(from 1 January 2024).

Registration.A company must register for GST if annual turnover of taxable supplies exceedsS$1,000,000. Voluntary registration is possible at lower turnover. Deadline: 30 days after exceeding threshold.

Zero-rated supplies (0%):export of goods, international services (where conditions met), sale of investment precious metals.

Exempt supplies:financial services (except those expressly listed) — lending, mortgages, securities trading, fund management, insurance.