This guide highlights key points in a simplified manner and omits certain technical details. For full compliance, please consult us for further advice.
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What is the corporate tax rate?
Singapore has a flat corporate income tax rate of 17%, making it one of the most tax-friendly jurisdictions globally. With further exemptions and tax schemes (outlined below), the effective tax burden can be significantly lower than in Japan.
What tax exemption schemes are available?
(Partial Tax Exemption Scheme for Companies)
Partial Tax Exemption (PTE):
This scheme applies to all companies: 75% exemption on the first SGD 10,000 of chargeable income and 50% exemption on the next SGD 190,000.
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(Tax Exemption Scheme for New Start-Up Companies)
Start-up Tax Exemption (SUTE):
Newly incorporated companies may enjoy a 75% exemption on the first SGD 100,000 of chargeable income and a 50% exemption on the next SGD 100,000 for their first three YAs, if they meet conditions such as having no more than 20 individual shareholders. Investment holding and property development companies are excluded.
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Other tax rebates and reliefs:
Additional tax rebates may be introduced in specific Years of Assessment (YA). For instance, in YA 2024, a corporate tax rebate of up to SGD 40,000 was available.
When applied to a taxable income of SGD 200,000, the effective tax rates under the above schemes are significantly reduced.
Can tax losses be carried forward?
Tax losses can be carried forward indefinitely in Singapore.
However, utilisation is subject to the “shareholding test”—more than 50% of the company’s shareholding must remain unchanged. Unlike capital allowances, there is no requirement for continuity of the same trade.
How is capital gain treated?
Capital gains that do not constitute trading income are generally not taxable in Singapore.
Capital gains include profits from the sale of shares or property. However, if such transactions occur frequently or assets are held for very short periods, they may be recharacterized as income from trade and become taxable.
Conversely, capital losses and related expenses are not tax-deductible.
A temporary administrative concession exempts capital gains on the sale of ordinary shares from tax, provided the seller held at least 20% of the shares in the target company for 24 months before disposal. This is applicable until 31 December 2027 and has been extended in the past, so it may continue thereafter.
How is depreciation treated for tax purposes?
Accounting depreciation is not deductible for tax purposes.
Instead, qualifying capital expenditures may be claimed over time through Capital Allowances. However, restrictions apply—e.g., buildings and structures are often excluded.
If a fixed asset is sold for more than its tax-written-down value (original cost less capital allowances claimed), the excess is subject to taxation as a balancing charge. Unutilised capital allowances can be carried forward indefinitely, subject to the same shareholding test. Additionally, they may be forfeited if there is a substantial change in the company’s principal activities.
How are tax audits conducted in Singapore?
In Singapore, tax audits are typically conducted through written correspondence rather than on-site visits by IRAS officers.
It is common practice for companies to engage accounting firms to handle correspondence with the tax authority during audits.
The frequency of audits depends on the size and nature of the business, but it is important to seek professional advice from a trusted accounting firm in case of an audit.
At Phoenix, we provide support in handling tax queries, as well as offering tax advisory and compliance services.
What is the corporate income tax filing and payment schedule in Singapore?
If your company’s financial year-end is 31 December 2024, the relevant filing and payment schedule is as follows:
The final tax filing deadline (Form C) is 30 November of the year following the financial year-end.
This filing will fall under Year of Assessment (YA) 2025.
Schedule:
- Estimated Chargeable Income (ECI) Filing Deadline: 31 March 2025 (within 3 months after FYE)
⇒ A Notice of Assessment (NOA) will be issued after the ECI filing
⇒ Payment must be made within one month from the date of the NOA
- Form C Filing Deadline: 30 November 2025
⇒ A Notice of Assessment will be issued a few months after filing
⇒ Any balance of tax must be paid within one month of the NOA issuance
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If the financial year-end is 31 March 2025, the filing deadline for Form C would be 30 November 2026, giving ample time to prepare the return.
Conclusion: Need help with corporate tax matters?
A sound understanding of Singapore’s corporate tax regime is essential for effective business planning.
At Phoenix, we provide tailored tax strategies and risk mitigation plans that align with your business objectives.
If you need assistance with the latest tax updates or wish to explore efficient tax strategies, feel free to contact us. Our experienced professionals are here to support you.