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Corporate Income Tax

Singapore is a small country with no natural resources. To promote economic growth and development, we have adopted an open economy conducive to foreign investments and international trade since our independence in 1965. This has allowed us to transform from a third world economy into a global business hub over the years, with substantive activities across diverse sectors.

Located at the crossroads between the East and West, Singapore is an attractive location for global businesses to access new and emerging markets in Asia. With our excellent infrastructure, robust and transparent regulatory environment, political stability, skilled workforce, and a stable and efficient tax regime, Singapore has become a trusted hub for many businesses, with manufacturing being the largest sector in our economy. Our Corporate Income Tax system has features which encourage enterprise, growth, and internationalisation.

 

Start-up Tax Exemption Scheme

Income derived by companies in Singapore is taxed at a flat rate of 17%. The start-up tax exemption scheme  provides newly incorporated companies some exemption on their taxable profits in their first three years of operation. Please refer to IRAS’ website for more details on the start-up tax exemption scheme and the qualifying conditions.

 

Partial Tax Exemption Scheme

The Government recognises that small- and medium-sized enterprises (SMEs) are an important component of a vibrant economy. To help such companies grow and establish themselves, the Government has put in place a partial tax exemption scheme designed to benefit SMEs. For more details on the partial tax exemption scheme, please refer to IRAS’ website.

 

Group Relief

As companies grow and expand their operations, they may organise themselves as multiple holding companies, subsidiaries and associate companies to manage liabilities. Under Singapore’s group relief system, current year unutilised losses, donations and unabsorbed capital allowances may be transferred to related companies within the group. This reduces the overall tax burden for the whole group. For more details on the group relief system, please refer to the IRAS e-tax guide on group relief.

 

Merger & Acquisition (“M&A”) Allowance Scheme

The M&A scheme aims to facilitate mergers and acquisitions, with a focus on developing a vibrant and dynamic SME sector. For further details of the M&A scheme and qualifying criteria, please refer to IRAS’ e-tax guide (icon_pdf884 KB) on the M&A scheme.

 

Double Tax Deduction for Internationalisation Scheme

The Double Tax Deduction for Internationalisation (“DTDi”) scheme provides support to businesses as they venture into international markets. For more details, please refer to IRAS’ website.

 

Tax incentives

Singapore adopts the use of tax incentives as one of the tools to encourage new and high-growth activities. Tax incentives are granted only for qualifying activities and the associated income. Income arising from non-qualifying activities will be taxed at the Corporate Income Tax rate. Read more.