Generous incentives and tax savings are in store for companies that take steps to move up the value-chain and create better jobs for residents. Rikvin, a leading Singapore company registration specialist, acknowledges that newly-incorporated companies stand to benefit as well.
Analysis by Rikvin shows that government effort is part of a larger strategy to mobilize Singapore-based companies to become more operationally effective, knowledge-intensive and innovation-driven as the country undergoes a massive economic changes.
“Businesses that aim to operate here must understand that Singapore is focused on mitigating future challenges as well as remaining relevant amid greater competition. To help companies align themselves to this larger goal, and shape the country’s future workforce and economy, the Singapore government will continue to offer a number of incentives. Companies that opt for incorporation in Singapore will be eligible for the following benefits.
1) Singapore Corporate Income Tax Rebates
To help companies cope with increasing business costs during the virus period, a special corporate income tax rebate will be granted
At a rate of 25 per cent of tax payable, capped at S$15,000 per company, this rebate will benefit all tax-paying companies for year of assessment 2020.
To put more cash in the hands of enterprises, several tax treatments under the corporate tax system will also be enhanced for year of assessment 2021.
2) Start-up Tax Exemption Scheme (SUTE) and Partial Tax Exemption (PTE)
All startup companies YA 2020 onward will be given
- 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
Learn more : Singapore Corporate Tax for Startups
3) Business and IPC Partnership Scheme (BIPS)
To encourage corporate volunteerism, businesses may claim 250% tax deduction on qualifying expenditure incurred from 1 July 2016 to 31 Dec 2021 when they send their employees to volunteer and provide services, including secondments, to Institutions of a Public Character (IPCs).
4) iSPRINT SCHEME
To encourage companies to use infocomm technology to improve their business operations, the Singapore offers grants under the iSPRINT scheme. Under this program, an SME can claim up to 70% of the cost of a packaged solution (capped at S$2,000 per item) or a more customized solution (capped at S$20,000).
5) Double Tax Deduction Scheme for Internationalisation (DTDi)
The Double Tax Deduction for Internationalisation scheme, set to lapse after March 31 this year (2020), was extended until Dec 31, 2025. This scheme allows businesses a tax deduction of 200 per cent on qualifying market expansion and investment development expenses, subject to approval from Enterprise Singapore or the Singapore Tourism Board.
“There really is no other jurisdiction in the world that offers such incentives and help businesses have their cake and eat it too. In spite of the inevitable challenges, such as rising costs, Singapore gives businesses the tools to move up the value-chain. In light of these incentives, we anticipate that more companies will continue to come to Singapore and establish their presence here,” affirmed Ms. Lim.
Need help filing your corporate tax?
Our taxation specialists will work closely with you to reduce your tax liabilities.