Singapore Tax — 17% CIT, 3-Year Startup Exemption & GST 9%

Singapore's headline corporate income tax (CIT) rate is 17% on chargeable income. The system is single-tier: dividends paid to shareholders carry no further tax at the shareholder level. The 17% rate has held since 2010. Partial exemptions and the startup scheme cut the effective rate sharply in a new company's first three years — as low as 4.25% on the first S$100,000 of profit.

The Startup Tax Exemption Scheme (SUTE) gives a qualifying new company, for its first three consecutive years of assessment: a 75% exemption on the first S$100,000 of chargeable income (effective rate 4.25%) and a 50% exemption on the next S$100,000 (effective rate 8.5%). To qualify: incorporated in Singapore, tax resident, no more than 20 shareholders, at least one an individual holding 10% or more. Effective rate as low as 4.25% on the first S$100,000.

No. Singapore imposes no capital gains tax: gains on the sale of shares, property (in certain cases), and other capital assets are generally not taxable. This is a core reason holding structures sit here. But if trading assets is the company's main business, the profit is characterised as revenue — not capital — and taxed at the 17% CIT.

Singapore taxes income territorially: only income accrued in or derived from Singapore is taxable. Foreign-sourced income — dividends, branch profits, service income — is generally exempt when received in Singapore, provided it was already taxed in the source country at 15% or more and IRAS is satisfied the exemption is beneficial. Hence Singapore's strength as a regional holding base.

GST registration becomes mandatory when a business's taxable turnover exceeds S$1 million over the past 12 months (retrospective basis) or is expected to exceed S$1 million in the next 12 months (prospective basis). The GST rate is 9% as of 1 January 2024. Below the threshold, voluntary registration is available. Registered businesses charge GST to customers, remit it to IRAS quarterly, and reclaim input GST credits on qualifying business purchases.