What benefits does the Singapore Government give to a newly set up Company?
| To encourage local entrepreneurship, Singapore Government has declared a full tax exemption for newly incorporated companies.
NEW START UP COMPANIES |
|
| Full tax exemption is granted on the first $100,000 of Chargeable Income for qualifying new companies for the first three years of assessment consecutively | (%) |
|---|---|
| First S$100,000 chargeable profit | Nil |
| S$100,001 to S$300,000 | 8.5 |
| Thereafter a Flat Rate of | 17 |
Are there any conditions to qualify to these exemptions?
- Note: *A qualifying new company must fulfill the following conditions:
a) It is incorporated in Singapore;
b) It is a tax resident of Singapore for that Year of Assessment;
c) It has no more than 20 shareholders throughout the basis period relating to that Year of Assessment;
d) All its shareholders are individuals throughout the basis period relating to that Year of Assessment OR start-up companies with corporate shareholders can qualify for the existing Start-Up Tax Exemption Scheme, provided that there is at least one individual shareholder of minimum 10% shareholding.
*A company is resident in Singapore if the control and management of its business is exercised in Singapore.
What is the tax Rates for Companies for Year of Assessment 2009 and for those who do not qualify for the New Start up exemption rates?
| Amount of chargeable income | Effective tax rate |
|---|---|
| First S$10,000 | 4.5% |
| Next S$290,000 | 8.5% |
| In excess of S$300,000 | 17% |
What is the Stamp Duty Tax for Property Transfer in Singapore?
| Value of property | Rate (%) |
|---|---|
| First S$180,000 | 1.0 |
| Next S$180,000 | 2.0 |
| Thereafter | 3.0 |
What are the capital gain tax rates in Singapore?
- There is no tax in Singapore on Capital Gain.
Are there any Tax Incentives for foreign companies to set up in Singapore?
| To encourage foreign capital inflow into Singapore, there are tax incentives provided to various industries namely in the form of reduced corporate tax rates. | |
| Finance & Treasury Centre Co. | 10% |
| Fund Manager | 10%/exempt |
| Headquarters Co. | 10% |
| International Commodity Trader | 10% |
| Offshore Leasing | 10% |
| Oil Trader | 10% |
| Securities Company | 10%/exempt |
| Trustee Company | 10% |
| Arts & Antique Dealers | 10% |
| Asian Currency Unit | 10%/exempt |
| Insurance & Re-insurance Co. | 10%/exempt |
| Members of Commodity Futures Exchange | 10% |
| Pioneer/Incentive Co. | exempt/various |
| Financial Sector Incentive Co. | 5%/10% |
| Cyber Trader | 10% |
| Commodity Derivatives Trader (New) | 5% |
Does Singapore have any value added tax or General sales Tax (GST)?
- The GST rates in Singapore is 7%.
What are the Common mistakes made by Corporate Taxpayers?
-
Understatement of income
Businesses should properly account for all the earnings and invoices issued for goods sold or services rendered. Omission of particular receipts or invoices issued amounts to an understatement of income, which is an offence.
Taxpayers should issue serially numbered invoices in respect of goods sold or services rendered. These receipts supported by proper invoicing should be properly accounted when preparing accounts.
Claiming Deductions for Non-deductible Expenses
Expenses not incurred for the business such as directors’ private expenses on entertainment, vacation and personal purposes. Businesses should segregate private expenses and exclude them from their claims.
Claims of motor vehicle expenses in respect of private-plate cars (i.e. non-Q plate cars) and business service passenger vehicles (Q-plate cars) e.g. petrol, insurance, repair & maintenance, parking fees, ERP charges, hire purchase interest, etc. Such expenses are not deductible even if they are incurred in the course of business.
