Singapore Income Tax System – Key Facts
Singapore follows a territorial basis of taxation. In other words, companies and individuals are taxed mainly on Singapore sourced income. Foreign sourced income (branch profits, dividends, service income, etc.) will be taxed when it is remitted or deemed remitted into Singapore unless the income was already subjected to taxes in a jurisdiction with headline tax rates of at least 15%. Although the concept of locality of the source of income seems simple, in realty its application often can be complex and contentious. No universal rule can apply to every scenario. Whether profits arise in or are derived from Singapore depends on the nature of the profits and of the transactions which give rise to such profits.
Singapore corporate tax rate is capped at 17%. By keeping corporate rates competitive, Singapore continues to attract a good share of foreign investment. Singapore follows a single-tier corporate tax system, where tax paid by a company on its profits is not imputed to the shareholders (i.e. dividends are tax free).
Singapore personal tax rates start at 0% and are capped at 20% (above S$320,000) for residents and a flat rate of 15% for non-residents. As an example, if you are tax resident in Singapore and your personal income for the year was S$160,000, your income tax liability will be approximately S$14,000.
To increase the resilience of taxes as a source of government revenue, Goods and Services Tax (GST) was introduced in 1994. The current GST rate is 7%. The balanced mix of tax on consumption and income reduces the vulnerability of revenue intake to adverse changes in economic conditions and strengthens the resilience of Singapore’s fiscal position.
Interest, royalties, rentals from movable properties, management and technical fees, and director’s fees paid to non-residents (individuals or companies) are subject to withholding tax in Singapore.
For personal taxes, the tax year is the normal calendar year i.e. January 1 – December 31. Deadline for filing personal tax return is April 15, For corporate taxes, a company is free to to decide on its financial year. Deadline for filing corporate tax return is November 30. Taxes are paid on a preceding year basis.
Singapore has no capital gains tax. Capital loss expenses are correspondingly not allowed as deductions.
Singapore has concluded more than 50 bilateral comprehensive tax treaties to help Singapore companies minimize their tax burden.
Overview of Singapore companies
Location of Jurisdiction
EU Savings Tax Directive Applies
Tax on Foreign Income
: Yes, but tax credit can be given for foreign taxes paid on such income so as to avoid double taxation.
Disclosure of Beneficial Owner
: Yes, but Nominees may be used.
Submit Audited Accounts
: Singapore companies are required to file audited or unaudited accounts. For financial years starting on or after 1 July 2015, dormant companies and companies that meet the “small company” criteria(1) are not required to audit their financial statements. This is provided for under the Companies Act.
(1) A company qualifies as a “small company” if:
> total annual revenue ≤ $10m
> total assets ≤ $10m
> no. of employees ≤ 50
For a company which is part of a group to qualify for audit exemption:
For financial years starting before 1 Jul 2015, dormant companies and exempt private companies with revenue not more than S$5 million are not required to audit their financial statements
Time to Incorporate
: Approximately 5 to 10 working days (online application normally takes 15 minutes after the registration fee is paid. However, it may take between 14 days to 2 months if it needs to be referred to other authorities for approval or review.)
Type of Offshore Company
: Private Limited Company
Type of Law
: Companies Act, (CAP.50)
Allowed Business Activities
Local Registered Office/ Agent Required
Change of Domicile
Shelf companies Available
Language of Documents
Name of Company
: A metal corporate seal is mandatory
: Any person aged 18 years and above
Minimum Number of Directors
: 1(individual and no body corporate)
Disclosure to Authorities & Public
: Yes, but Nominees can be used
: At least 1 director must be residing in Singapore
Local Director Required
: Yes (can be EP holder/ Singaporean/Permanent Resident)
Nominee Director Available
: Yes. Provided by TNC
Location of Meetings
: Yes, Local (must be residing in Singapore). Can be provided by TNC
Minimum number of shareholders
Maximum number of Shareholders
: Not more than 20 for Exempt Private Company More than 20 to 50 for Private Company
: Any person of any nationality or body corporate
Disclosure to Authorities & Public
Nominee Shareholders Available
Annual General Meetings
Location of Meetings
Minimum Number of shares
Maximum Number of shares
Bearer Shares Permitted
Classes of shares permitted
: Ordinary shares, preference shares, redeemable share and shares with or without voting rights.
Minimum paid up share capital
Maximum share capital
Recommended share capital
: Min. S$1.00
Requirement to be paid up
Restrictions on Name
Names which are identical to a sole-proprietorship / partnership name or to that of any other company, corporation, limited liability partnership or limited partnership
Names which are identical to a name being reserved under the Business Registration Act, the Companies Act, the Limited Liability Partnerships Act or Limited Partnerships Act
Names which the Minister has directed the Registrar not to accept for registration e.g. Temasek
A name application may be referred to the Regulatory Authorities for comments if the name application discloses information, which necessitates the referral.
Financial Statement Requirements
Every Singapore companies must produce annual audited accounts and appoint an auditor, who must be a member of the Certified Public Accountants of Singapore and hold a practicing certificate. However, for financial year starting on or after 1 July 2015, dormant companies and companies that meet the “small company” criteria are not required to audit their financial statements.. The company must keep accounting records, which may be kept at the registered office address or elsewhere at the discretion of the directors.
Filing of Annual Return (must be filed with the Registrar one month after the AGM)
Audited/Unaudited Accounts For a public company listed or quoted on a securities exchange in Singapore: Accounts presented at the AGM shall be made up to a date not more than 4 months before AGM In case of any other company: Accounts presented at the AGM shall be made up to a date not more than 6 months before the AGM
Filing of Corporate Tax (tax computation and IRAS Income Tax Form)
Renewal of Business Registration (for sole proprietorship and partnership)
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