Singapore is renowned for its competitive and business-friendly tax regime. Here’s an overview of the tax rates and system in Singapore:
Corporate Tax: The headline corporate tax rate in Singapore is 17%. However, due to various tax incentives and exemptions, the effective tax rate can be significantly lower. For new startup companies, there’s a tax exemption scheme that effectively translates into zero tax for the first S$100,000 of normal chargeable income for each of the first three consecutive years of operation.
Goods and Services Tax (GST): Similar to the Value Added Tax (VAT) system in many countries, Singapore levies a Goods and Services Tax (GST). As of my knowledge cutoff in September 2021, the GST rate is 7%.
Personal Income Tax: Singapore has a progressive personal income tax system where rates start at 0% and max out at 22% for residents. Non-residents are taxed at a flat rate of 15% or the resident rates whichever results in a higher tax amount.
Property Tax: Property tax in Singapore is levied on the annual value of the property as determined by the tax authority. Rates vary depending on whether the property is owner-occupied or rented out.
Estate Duty or Inheritance Tax: As of my knowledge cutoff in September 2021, Singapore does not levy estate duty or inheritance tax.
Foreign-Sourced Income: Singapore follows a territorial basis of taxation, which means that foreign-sourced income is not subject to Singapore tax. However, foreign-sourced income received in Singapore by a resident company may be taxed, subject to certain exemptions.
It is recommended to consult with a local tax advisor or CPA to understand the specific tax implications for your company, as the above is a general overview and may not apply in all circumstances.
