Singapore: Lowest Corporate Tax

Moving a company to Singapore offers several advantages, including favorable tax incentives and a business-friendly environment. Here are some key advantages of relocating a company to Singapore in terms of tax:

Competitive Corporate Tax Rates:

Singapore has one of the lowest corporate tax rates globally. Currently, the corporate tax rate is capped at 17%. However, effective tax rates can be significantly lower due to various tax incentives and exemptions available.

Business friendly: Singapore

Start-up Tax Exemption Scheme (SUTE):

Under the SUTE scheme, qualifying newly incorporated companies in Singapore can enjoy a full tax exemption on their first S$100,000 of chargeable income for the first three consecutive years of assessment. An additional 50% exemption is available for the next S$200,000 of chargeable income.

Partial Tax Exemption:

After the initial three years of assessment, companies can benefit from the partial tax exemption scheme. This scheme grants a 75% exemption on the first S$10,000 of chargeable income and a 50% exemption on the next S$190,000 of chargeable income.

Development and Expansion Incentive (DEI):

The DEI scheme provides tax incentives to companies that expand or develop their operations in Singapore. Companies engaged in qualifying activities can benefit from reduced tax rates on incremental income generated from qualifying activities for a specific period.

Global Trader Program (GTP):

Companies involved in international trading activities can apply for the GTP, which offers reduced tax rates on qualifying income. Under this program, qualifying trading companies can enjoy a concessionary tax rate of 5% or 10% on qualifying income.

Avoidance of Double Taxation:

Singapore has an extensive network of over 80 comprehensive double tax treaties (DTTs) with countries worldwide. These DTTs aim to prevent double taxation and provide relief by reducing or eliminating withholding tax rates on dividends, interest, and royalties.

Goods and Services Tax (GST):

Singapore has a Goods and Services Tax (GST) system, which is a value-added tax similar to VAT. The current GST rate is 7%, which is relatively low compared to many other countries. However, certain goods and services may be exempt from GST, providing potential cost savings for businesses.

No Capital Gains Tax:

Singapore does not impose capital gains tax on gains from the sale of shares or most other assets. This can be particularly advantageous for companies engaged in investment activities or asset sales.

Territorial Tax System:

Singapore follows a territorial tax system, meaning that only income generated within Singapore or derived from Singaporean sources is subject to taxation. Foreign-sourced income is generally exempt from taxation, subject to certain conditions and exceptions.

R&D Tax Incentives:

Singapore offers various tax incentives, grants, and schemes to encourage research and development activities. These incentives include tax deductions or allowances for eligible R&D expenditures and tax credits for qualifying expenses.

It's important to note that while Singapore offers attractive tax incentives, it's essential to comply with applicable tax regulations and maintain proper records to ensure eligibility and compliance. Consulting with tax advisors or professionals in Singapore is advisable to navigate the specific tax considerations and optimize tax planning strategies based on individual circumstances.