Under the modified territorial basis of taxation, companies in Singapore are subject to tax on income accruing in or derived from Singapore and foreign income received or deemed received in Singapore from outside Singapore.
Tax assessed has to be paid within 30 days from the date of the Notice of Assessment unless the Company has been allowed to pay the tax by instalment. The instalment payment plan is generally allowed only for the payment of tax assessed on an Estimated Chargeable income (ECI).
YA2019 - 20% of tax payable, capped at $10,000
YA2020 - 25% of tax payable, capped at $15,000
YA2021 - NIL
YA2022 - NIL
Both resident and non-resident companies are subject to tax at the corporate tax rate after tax exemptions as follows:
First $10,000 of chargeable income is 75% exempt - $7,500
Next $190,000 of chargeable income is 50% exempt - $95,000
Up to - $102,500
The exemption scheme does not apply to:
Qualifying start-up companies are granted tax exemptions for their normal chargeable income for their first three consecutive YAs. Where any of the first 3 YAs falls in or after YA2020:
First $100,000 of chargeable income is 75% exempt - $75,000
Next $100,000 of chargeable income is 50% exempt - $50,000
Up to - $125,000
The conditions to qualify for the start-up exemption are that the company must be Singapore incorporated and be a Singapore tax resident with no more than 20 shareholders where all shareholders are individuals or, at least one of the shareholders must be an individual who beneficially and directly owns at least 10% of the total number of issued ordinary shares.
Property developers and investment holding companies do not qualify for the start-up exemption.
Under the group relief system, Singapore companies within the same group (the Group) are allowed to transfer current year tax losses, unabsorbed capital allowances and unabsorbed donations to another company in the same group. A group consists of a Singapore incorporated parent company and all its qualifying Singapore incorporated companies.
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