Corporate Tax Guide
Single Tier Tax System
Singapore has a single-tier based system on a fixed-rate corporate income tax system. Singapore’s effective tax rate of 17% as one of the lowest in the world. The government has been lowering the corporate tax rate over the years so as to attract more investments in Singapore.
Tax rate and rebates
The corporate tax rate is 0% on the first S$100,000 taxable income for the first three years for newly incorporated company that meets certain conditions such as tax resident and Singapore incorporated companies. To help companies cope with increasing business costs, the Minister for Finance has announced in Budget 2013 that, for the YA 2013 – YA 2015, companies will receive a 30% Corporate Income Tax (CIT) Rebate that is subject to a cap of $30,000 per YA.
For tax filing, companies need to submit the complete set of return by 30 November the following year. For more information, please refer to IRAS website.
Productivity and Innovation Credit (PIC)
To encourage businesses to improve productivity and technology, the Government has role out a new scheme, Productivity and Innovation Credit (PIC) scheme, where the businesses can enjoy 400% tax deductions/ allowances and/or 60% cash payout for investment in innovation and productivity improvements. The benefits under PIC are available from YA 2011 to 2015 on certain qualifying activities. From YA 2013 to 2015, your business may also enjoy a PIC Bonus, which is a dollar-for-dollar match for cash bonus in addition to the existing 400% tax deductions/ allowances and/or 60% cash payout.
As the PIC scheme has expired after YA 2018, businesses will not be allowed to claim PIC benefits on expenditure incurred after the basis period of YA 2018.
A dormant company is a company that does not carry any business activities & no income. Dormant companies must submit their Income Tax Returns unless it has been granted waiver.