Updated: Dec 4, 2021
Corporate Tax Rates
Tax Rates and Corporate Income Tax Rebates for both local and foreign companies.
Companies can enjoy the partial tax exemption.
Partial tax exemption for companies
Chargeable income | % exempted from Tax | Amount exempted from Tax
First $10,000 @75% =$7,500
Next $190,000 @50% =$95,000
Total $200,000 =$102,500
A company is taxed at a flat rate of 17% on its chargeable income regardless of whether it is a local or foreign company.
Corporate Income Tax (CIT) Rebate
Companies are granted a 25% Corporate Income Tax Rebate capped at $15,000.
Example: Company with income taxable at 17%
Chargeable income (after exempt amount)
Tax payable at 17%
Less: Corporate Income Tax Rebate ($85,000 x 25%, restricted to cap of $15,000)
Net tax payable
Dividends are profits you receive from your share of ownership in a company, which may be paid out to you in cash or in kind. For example, a company may pay its shareholders dividends in the form of company's shares.
Tax Treatment of Dividends
Under the one-tier corporate tax system, shareholders will not be taxed on dividends paid by a Singapore resident company.
Generally, the following dividends are not taxable:
Dividends paid by a Singapore resident company under the one-tier corporate tax system except co-operatives;
Foreign dividends received in Singapore by resident individuals;
Income distribution from Real Estate Investment Trusts (REITs), except distributions derived by individuals through a partnership in Singapore, or from the carrying on of a trade, business or profession in REITs.
Taxation of Foreign Interest Income
Foreign-sourced interest is taxable in Singapore when it is remitted or deemed to be remitted into Singapore.
Foreign income refers to income derived from outside Singapore. Generally, such income is taxable in Singapore when remitted to and received in Singapore.
Income Received from Abroad
Under Section 10(25) of the Income Tax Act, income from outside Singapore is considered received in Singapore when it is:
a. remitted to, transmitted or brought into Singapore;
b. used to satisfy any debt incurred in respect of a trade or business carried on in Singapore; or
c. used to purchase any moveable property (such as equipment, raw material etc.) brought into Singapore.
As an administrative concession, foreign income which is applied towards overseas investments without being repatriated to Singapore will not be treated as having been received in Singapore under section 10(25) at the point of reinvestment. This means that the taxing point of the foreign income is deferred till when the investment is realised and the proceeds are brought into Singapore.
If you are subject to tax on foreign-sourced income, you will continue to be entitled to claim tax reliefs or credits available under section 50, 50A or 50B of the Income Tax Act in respect of the foreign tax paid or payable on such income.
Gains from Sale of Property
Generally, the gains derived from the sale of a property in Singapore are not taxable as it is a capital gain. However, gains from "trading in properties" may be taxable.
Taxable Gains from Sale of Property
The gains may be taxable if the individual buys and sells property with a profit-seeking motive, or deemed to be trading in properties. Whether a person is deemed to be carrying on a trade will depend on individual circumstances. Some criteria used to assess if you are trading in properties are as follows:
Frequency of transactions (buying and selling of properties);
Reasons for acquiring and selling of property;
Financial means to hold the property for long term; and
Reporting Taxable Gains
You must declare taxable gains from the sale of property under 'Other Income' in your tax form.
Gains from Sale of Shares and Financial Instruments
Generally, profits or losses derived from the buying and selling of shares or other financial instruments are viewed as personal investments. Payouts from insurance policies are also not taxable as they are capital receipts.
These profits are capital gains and are not taxable. You need not report such gains in your tax return.
Gains on sale of fixed assets
Gains on sale of fixed assets are capital gains. Capital gains are not taxable.
Goods & Services Tax (GST)
When a business is transferred, business assets are usually transferred. This is similar to a sale or disposal of business assets. The GST-registered transferor has to account for GST on the supply.
If you would like to know more, please contact Bestar.