If you want to incorporate in Singapore, this article will tell you about tax laws for a Pte Ltd which is the most common company type in Singapore.
Singapore taxes corporate income on a territorial basis. This means that usually income earned abroad not remitted back, from our research, and this is not personal tax advice, is not subject to taxation. However, income may be taxed when it is received in Singapore. Foreign dividends, foreign branch profits, and foreign service fees income remitted to the country may be tax-exempt if fulfill certain conditions.
Taxes are very reasonable in Singapore because the highest corporation tax rate is 17%. This ranks Singapore as 59th when compared to corporate tax rate worldwide.
There is an exemption of 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.
The value added tax (VAT) rate in Singapore is 7.00%, which ranks Singapore as 36th when compared to value added tax rate worldwide. In terms of other taxation, an employer will contribute 17% to the equivalent of a social security fund and an employee will contribute 20%. The overall complexity of the tax system is low. This is measured by average time to comply with a country's labor tax requirements is as it is 10hours. Contributing to this is the number of yearly labor tax payments, which is 1 in SG.
Thin capitalization mandates aren't in effect. This refers to any sort of restrictions on companies' debt-to-asset ratios.
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. Dividends are a distribution of a portion of company earnings, decided by the board of directors, to shareholders. Dividends can be one of the following shares of stock, cash payments, or other property.
Singapore does not usually tax Capital Gains. However, in certain cases, when the main business of a company is the trading of shares, and there is a series of transactions or the holding period of an asset is relatively short, the gains may be considered as ordinary income and included in corporate tax base. A capital gains tax is levied on the profits that a corporation or natural person realizes when they sell sells a capital asset for a price that is higher than the purchase price.
Dividends paid to non-residents are not subject to withholding tax. Interests and Royalties paid to non-residents are subject to a final withholding tax of 15% and 10%, respectively, unless rates are reduced under a tax treaty. Corporate Income Tax may apply to interest and royalty payments to non-residents, if it is considered that they are derived by their business carried in Singapore.
There is no known tax on wealth in Singapore. There are no known inheritance taxes in Singapore. There is a real property tax and a stamp duty on certain financial instruments related to stock and shares and immovable property. There are frequently implemented research and development tax incentives in Singapore.
The above is not tax or legal advice for your particular personal tax obligations. Incorporations.io can refer you to an accountant in Singapore who can give you the proper advice and help you need. Contact us today. Ready to get started? Click incorporate now if you are in a hurry, or press the free consultation button above.
It takes approximately 32 hours to file and prepare documents for a Singapore Common Law.
The corporate tax is approximately 17% which is 59 in the world.
Owners of a company in Singapore are allowed to carry back a loss and may be allowed to carry forward a loss for 100 years.
The vat rate in Singapore is 7% which ranks 36 in the world.