Tax Exemption for New Companies
Updated: Sep 11, 2019
The tax exemption scheme for new start-up companies was introduced to support entrepreneurship and help our local enterprises grow.
Qualifying companies will be given the following tax exemption for the first three consecutive YAs:
75% exemption on the first $100,000 of normal chargeable income*; and A further 50% exemption on the next $100,000 of normal chargeable income*.
*Normal chargeable income refers to income to be taxed at the prevailing at the prevailing corporate tax rate.
Qualifying Conditions for New Companies
The tax exemption is open to all new companies except these two types of companies:
- A company whose principal activity is that of investment holding; and - A company which undertakes property development for sale, for investment, or for both investment and sale.
To qualify for tax exemption for start-ups, eligible companies must satisfy these three qualifying conditions:
1. The company must be incorporated in Singapore; 2. The company must be a tax resident in Singapore for that YA; 3. The company’s total share capital is beneficially held directly by no more than 20 shareholders throughout the basis period for that YA where:
i. all of the shareholders are individuals; or ii. at least one shareholder is an individual holding at least 10% of the issued ordinary shares of the company.