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Singapore

Taxes

Tax residency – Companies managed and controlled within Singapore are deemed to be tax resident in Singapore. Management and control’s place is usually where the board of directors’ meetings are held.

Basis - Corporate income tax is levied on income accrued or derived from Singapore and income remitted or deemed remitted to Singapore.

Tax rate – Income tax is levied at a 17.5% rate. An exemption may apply on 75% of the first SGD 10,000 of taxable income and 50% of the next SGD 290,000.

Certain qualified start-ups may be three-year tax exempt on their first SGD 100,000 taxable income and 50% tax exempted on the next SGD 200,000.

Companies limited by guarantee registered as charities are exempt from income and property tax and all registered charities that are also qualified as an Institution of Public Character (IPC) are eligible to receive donations that are tax deductible at 2.5 times the amount of such deduction.

Capital gains - Capital gains are not subject to taxation.

Dividends -  Dividends received by a resident company from another resident company are tax-exempt.

Dividends received from non-residents companies and branch profits may be exempted, provided that profits have been taxed at CIT rate of at least 15% in the foreign jurisdiction. If foreign income has been tax exempt due to foreign jurisdiction's tax incentives, it may be considered to have met the condition.

Interests - Interest income derived from Singapore is taxable, and foreign-sourced interest is taxable when it is remitted or deemed to be remitted to Singapore.

Royalties – Royalty income derived from Singapore is taxable, and foreign-sourced interest is taxable when it is remitted or deemed to be remitted to Singapore.

Foreign-source income - Foreign-source income is usually exempt from taxation, provided that is not remitted to Singapore. Undistributed income of foreign subsidiaries is not subject to taxation.

When income is remitted to Singapore, if it is derived from treaty countries, a tax credit for foreign tax paid is usually available. For non-treaty countries, unilateral tax credit is given in respect of foreign tax on all foreign-sourced income. These foreign tax credits may be pooled, subject to certain conditions.

Foreign dividends, foreign branch profits, and foreign service fee income remitted to Singapore may be exempt from tax if they fulfil certain conditions.

Withholding taxes – Interests and royalties are subject to a 15% and a 10%, respectively, unless rate is reduced due to a tax treaty or an exemption apply.

Losses – Losses arising from taxable income may be carried forward indefinitely, subject to shareholdings in the loss-making corporation have not changed beyond 50% of the total number of issued shares and the same trade has been continued. Losses up to SGD 100,000 may be carried back for 1 year.

Inventory - There are no special rules on valuation methods for inventories in the case of a continuing business, as long as the basis is consistent from one year to another. However, a last in first out (LIFO) basis of valuation is not permitted for tax purposes. Generally, tax reporting conforms to book reporting.

Anti-avoidance rules – The Inland Revenue Authority of Singapore (IRAS) has issued transfer pricing guidelines covering the application of the arm’s length principle, documentation requirements, advance pricing agreements, requests to invoke the mutual agreement procedure under Singapore’s tax treaties and for related party loans and services.

Singapore has not enacted thin capitalization rules, nor controlled foreign companies regulations.

Labor taxes – Employers and employees are required to make contributions to the Central Provident Fund (CPF) at 17% and 20% of employees’ monthly income, respectively, up to an income ceiling of SGD 6,000. Contributions are payable by Singapore citizens and permanent residents.

Tax credits and incentives – For income derived from treaty countries remitted to Singapore, a tax credit for foreign tax paid is usually available. For non-treaty countries, unilateral tax credit is given in respect of foreign tax on all foreign-sourced income. These foreign tax credits may be pooled, subject to certain conditions.

There are several tax incentives in Singapore:

  • Corporations manufacturing approved products with high technological content or providing qualifying services may apply for tax exemption for five to 15 years
  • Corporations engaging in new high-value-added projects, expanding or upgrading their operations, or undertaking incremental activities after their pioneer period may apply for their profits to be taxed at a reduced rate of not less than 5% for an initial period of up to ten years.
  • Up to 100% tax-exemption of profits based on capital expenditure incurred for qualifying projects or activities within a period of up to 5 years.
  • Incentives for internationalization of 10% concessionary tax rate on incremental income from qualifying activities for up to five years.
  • Income from the commercialisation of certain IP taxed at a concessionary rate.
  • Other tax incentives for financial services companies, maritime sector companies, international traders, regional headquarters and for mergers and acquisitions among others.

Compliance – On average, a company in Singapore may require 5 payments and 66 hours per year to prepare, file and pay income and labor taxes.

Personal tax – Residents and non-residents are subject to personal income tax on their income derived from Singapore. Foreign-source income is only taxable if it is received in the country by a resident through a partnership in Singapore. Usually, an individual is tax resident in Singapore if he or she spends more than 183 days in a year or engages regular employment in the country.

Residents are subject to a personal income tax at progressive rates up to 22% on annual income exceeding S$320,000. Non-residents income is subject at a flat tax rate of 22%. Capital gains, dividends and interests are not usually subject to taxation.

Other taxes – A monthly levy for foreign worker may apply to companies of certain industries and a training levy for all employees on their first SGD 4,500 gross monthly wage at a rate of 0.25%.

Property tax is levied on the annual value of houses, land, buildings, or tenements. Non-owner occupied residential property is taxed at graduated rates from 10% to 20%, owner-occupied residential property from 0% to 10%, and land and non-residential properties at 10%.

Stamp duties are levied on certain transactions. Transfer of stocks and shares are subject to stamp duty of 0.2% on the purchase price or market value of the shares transferred, whichever is higher. For conveyance of immovable property there is a stamp duty of 3% on the purchase price or market value, whichever is higher. There are additional stamp duties of up to 16%, depending on the type and use of the property and residency status of the owner. Leases are subject to a duty at 0.4% of the total rent.

There are excise duties good and services such as intoxicating liquors, tobacco products, motor vehicles, petroleum products and gambling.

There are no inheritance, gift and net wealth taxes in Singapore. V.A.T. standard rate is 7%.

  • Offshore Income Tax Exemption
  • Offshore capital gains tax exemption
  • Offshore dividends tax exemption
  • CFC Rules
  • Thin Capitalisation Rules
  • Patent Box
  • Tax Incentives & Credits
  • Property Tax
  • Wealth tax
  • Estate inheritance tax
  • Transfer tax
  • Capital duties
  • 0% Offshore Income Tax Rate
  • 17% Corporate Tax Rate
  • 0% Capital Gains Tax Rate
  • 0% Dividends Received
  • 0% Dividends Withholding Tax Rate
  • 15% Interests Withholding Tax Rate
  • 10% Royalties Withholding Tax Rate
  • 1 Losses carryback (years)
  • Indefinitely Losses carryforward (years)
  • FIFO Inventory methods permitted
  • 64 Tax time (hours)
  • 5 Tax payments per year
  • 20% Social Security Employee
  • 17% Social Security Employer
  • 22% Personal Income Tax Rate
  • 7% VAT Rate
  • 81 Tax Treaties

Country details

Singapore
SGD
Singapore
Asia
cmn, en-SG, ms-SG, ta-SG, Chinese (Singapore)
4,701,069

The Republic of Singapore, also known as Lion City or the Little Red Dot, is an island city-state of Asia, made up of a main island and other sixty-two islets, and founding member of the ASEAN.

It is located to the south of the State of Johor in the peninsula of Malaysia and to the north of the islands Riau of Indonesia, separated of these by Strait of Singapore. Its population is about 5.5 million, of which about 75 percent are Chinese, and the rest are Malay, Indian or Eurasian minorities. This multiculturalism diversity is reflected in the four official languages of the country, English, Chinese, Malay and Tamil. Its official currency is the Singapore Dollar (SGD), which is also accepted as customary tender in Brunei. Alike, the Brunei Dollar (BND) is customarily accepted in Singapore.

Singapore is a unitary multiparty parliamentary republic, with a Westminster system of unicameral parliamentary government.

Singapore is one of the main global cities and one of the hubs of world trade, third-largest oil refining and trading centre, third largest financial center and one of the largest freight port worldwide. Singapore is the third country with the highest per capita income worldwide, in terms of purchasing power parity, as well as being among the first countries on the international lists of education, with one of the highest skilled workforce worldwide, health, political transparency and economic competitiveness.

Its globalized and diversified economy depends especially on international trade, refining imported raw goods to reexport, and an export-oriented manufacturing sector, mainly chemistry, oil refining, being one of the top three export refining centers in the world, mechanical engineering, biotechnology and biomedical sciences. Singapore has one of the seaports that handles the largest annual cargo volume worldwide, both in tonnage and in the number of containers.

The country is also an important international financial hub, leading world’s private banking sector, offering top-notch corporate banking facilities and a broad-range of banking services, investment funds and insurance services, among others. It also has the fourth largest currency exchange and capital market worldwide, behind New York, London and Tokyo.

All supported by an investor and entrepreneurship friendly tax policy. With a territorial tax system, a low tax burden and the availability of several tax breaks and incentives for startups and technological innovation.

Singapore welcomes thousands of foreign investors, expats entrepreneurs and multinational companies’ employees. Singapore’s immigration policy is geared towards attracting foreign talent, with several visa schemes to attract high-skilled foreign employees, entrepreneurs and investors.

Tax treaties

Country Type Date Signed
Mauritius DTC  1995-08-19
Poland DTC  2012-11-04
Austria DTC  2001-11-30
Myanmar DTC  1999-02-23
Slovenia DTC  2010-01-08
Bulgaria DTC  1996-12-13
Kuwait DTC  2002-02-21
Pakistan DTC  1993-04-13
Belarus DTC  2013-03-22
Romania DTC  2002-02-21
Hungary DTC  1997-04-17
Czech Republic DTC  1997-11-21
South Africa DTC  1996-12-23
Lithuania DTC  2003-11-18
Qatar DTC  2006-11-28
Uruguay DTC  2015-01-15
Italy DTC  1977-01-29
Rwanda DTC  2014-08-26
Oman DTC  2003-10-06
Belgium DTC  2006-11-06
Liechtenstein DTC  2013-06-27
Sweden DTC  1968-06-17
France DTC  1974-09-09
Libya DTC  2009-04-08
Uzbekistan DTC  2008-07-24
Panama DTC  2010-10-18
India DTC  1994-01-24
Jersey DTC  2012-10-17
Korea, Republic of DTC  1979-11-06
Ukraine DTC  2007-01-26
Isle of Man DTC  2012-09-21
Barbados DTC  2013-07-15
Canada DTC  1976-03-06
Turkey DTC  1999-07-09
Bangladesh DTC  1980-12-19
Fiji DTC  2005-12-20
Finland DTC  2002-06-07
Malta DTC  2006-03-21
Chinese Taipei DTC  1981-12-30
Australia DTC  1969-02-11
Portugal DTC  1999-09-06
Estonia DTC  2006-09-18
Egypt DTC  1996-05-22
Malaysia DTC  2004-10-05
Brunei Darussalam DTC  2005-08-19
Japan DTC  1994-04-09
Denmark DTC  2000-07-03
Sri Lanka DTC  2014-04-04
Latvia DTC  1999-10-06
Kazakhstan DTC  2006-09-19
Ireland DTC  2010-10-28
Netherlands DTC  1971-02-19
Indonesia DTC  1990-05-08
Norway DTC  1997-12-19
Papua New Guinea DTC  1991-10-19
United Arab Emirates DTC  1995-12-01
New Zealand DTC  2009-08-21
Albania DTC  2010-11-23
Georgia DTC  2009-11-17
Seychelles DTC  2014-07-09
Bahrain DTC  2004-02-18
Mongolia DTC  2002-10-10
United Kingdom DTC  1997-02-12
Thailand DTC  1975-09-15
Saudi Arabia DTC  2010-05-03
Viet nam DTC  1994-03-02
Israel DTC  2005-05-19
Cyprus DTC  2000-11-24
Germany DTC  2004-06-28
China DTC  2007-07-11
Switzerland DTC  2011-02-24
Slovakia DTC  2005-05-09
Luxembourg DTC  1993-03-06
Morocco DTC  2007-01-09
Guernsey DTC  2013-02-06
Russian Federation DTC  2002-09-09
San Marino DTC  2013-12-11
Philippines DTC  1977-08-01
Mexico DTC  1994-11-09
Spain DTC  2011-04-13
Bermuda TIEA 2012-10-29

Tax treaties Map

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