Corporate tax
Singapore is a very attractive jurisdiction for businesses ; offering various incentives, tax deduction/ exemption and grants.
Singapore taxes on a territorial basis. Singapore-sourced income is subject to Singapore tax. Also, income from a source outside Singapore is liable to Singapore tax if it is received in Singapore. However, the receipt basis does not apply to certain specified income received by companies.
The standard corporate tax rate is 17% but most companies will enjoy partial or total exemption of the first S$ 300,000 of normal chargeable income.
Furthermore, for the YA 2013, 2014 and 2015, companies will be granted a 30% corporate income tax rebate capped at S$ 30,000 for each YA.
Please note that it is also possible to negotiate a lower rate in some cases. Other tax incentives, deductions or grants are available depending on the commercial activities of the company.
Amongst other advantages, there is no capital gains tax and dividends paid by a company resident in Singapore to foreign shareholders are not subject to withholding tax.
Singapore offers various grant and incentive schemes for businesses; such as the Productivity and innovation Scheme (PIC). Under the PIC, qualifying businesses will enjoy 400% tax deductions/ allowances and/or 60% cash payout for investment in innovation and productivity improvements and a dollar-for-dollar matching cash bonus given on top of the existing 400% tax deductions/ allowances and/or 60% cash payout, subject to certain caps.
Individual Tax
An individual is considered as resident in Singapore for income tax purposes if she/he is physically present in Singapore for at least 183 days in a calendar year. If an individual stays in Singapore for less than 183 years over a calendar year, the Singapore tax administration may also consider him/ her as a tax resident in Singapore depending on the “nature” of his stay overseas.
Tax residents are taxed on any Singapore-sourced income or income received in Singapore. However, the Singapore Income tax Act expressly exempt from tax any income arising from sources outside Singapore and received in Singapore.
Dividends received by individuals from Singapore private companies or foreign dividends are not taxable in Singapore.
Chargeable income will be taxed at progressive rates.
Please be informed that a non-resident individual who is physically present in Singapore for more than 60 days will also be subject to tax in Singapore. His/ her chargeable income will be taxed at 15% or at the resident rate, whichever is higher.