Tax Exemption Scheme in Singapore

Singapore has always received good attention when it comes to Foreign Direct Investment (FDI). The liberal and competitive tax policies are one of the major contributors for inviting FDI in the country. In order to attract investments and rapid growth, the government of Singapore has introduced several policy measures like Tax Exemption Scheme, SME Cash Grant, Corporate Income Tax Rebate and Product & Innovation Credit (PIC) Scheme.

With various tax exemption schemes in place, more and more businesses are eyeing to set up business in Singapore. This in turn is giving rise to consulting firms providing taxation services in Singapore.

If you are planning to set up your business in Singapore, here are few things which can help you to save your taxes.

Let us first know the eligibility criteria to avail the tax exemptions for new start-ups in Singapore.

Eligibility Criteria

In order to be eligible for tax exemption scheme, the following conditions must be fulfilled:

• The incorporation of the company must be in Singapore
• The company must be a tax resident in Singapore
• The company should not have more than 20 shareholders
• The company should not be a property developing company or an investment holding company

Let us learn about the different tax benefits in Singapore.

Tax Benefits in Singapore

• The corporate tax rate in Singapore has been reduced from 20% to 17% since 2010. The lower tax rate attracts foreign companies to conduct business activities in Singapore.

• Businesses in Singapore get the benefit of claiming 100% tax exemption if the business income is under $ 100,000. Moreover, businesses are exempt of 50% tax on the next $ 200,000. 

• To help the entrepreneurs overcome the tax burden, the Singapore government has introduced Tax Exemption Scheme with a lot of incentives in the Assessment Year of 2005. 

• Companies can claim capital allowances to reduce tax liability. The claim for capital allowance can be made 100% on the assets. 

• Product and Innovation Credit is a new scheme implemented by the Singapore government that allows claiming enhanced capital allowances of 300% instead of 100%. This new scheme is efficient in reducing the tax cost for a company.

All the above exemptions and benefits have resulted in the rise of SMEs and other businesses in Singapore. The local government is making constant efforts to make the tax structure more lucrative for the investors and business entrepreneurs. The tax reforms in Singapore have led to a boost in the growth of the economy and employment.

 How Can We Help?

IMC Group provides taxation services in Singapore. We are a well-established organization offering services like accounting, payroll, taxation, etc. to business enterprises in Singapore.

With our expertise, business enterprises can avail the right tax exemptions available to them. We ensure that our services lead to savings in the tax expenses of the company. You can approach us for further information by mailing us or giving us a call on our registered number.