SINGAPORE – Tax Exemption Company – Startup

Singapore - Tax resident or non-resident?

Requirements for Tax Exempt Company (0% tax – 100% of S$ 100,000 taxable income):
0% tax for new Startup can claim for first three financial years

 

– must be incorporated in Singapore
– must be a tax resident in Singapore (if the business is exercised in SG)
– can’t have more than 20 shareholders

Tax exemption & partial tax exemption for First Three Years  (in S$)
Financia yearsTaxable IncomeRelative expressionTax Rate
1<0 – 100,000>100%0%
next(100,000 – 300,000>50%8.50%
next(300,000 – 2,000,000>17%

Partial Tax Exemption – 8,5% tax – 50% of an amount >S$ 100,000)
If your Startup doesn’t meet the qualifying conditions under this scheme, your Startup will be given the partial tax exemption status – 50% exemption is given from the chargeable income.
Tax and partial tax exemption – read more here.

Partial tax exemption after First Three Years  (S$)
Financia yearsTaxable IncomeRelative expressionTax Rate
after 3 years<0-300,000>50%8,5%
after 3 years(300,000 – 2,000,000>17%

If the company reports losses or has no income in any of the first three years
– your chargeable income and tax payable will be nil and you can’t enjoy the benefit of exemption scheme for new Startup company. Three years are consider since you
establish your Startup. If you company has not commenced any business for first two
years you have left one year of tax exemption.

 

Income Tax Audit exemption
– number of corporate shareholders is lower than 20 and with annual revenue less than S$ 5,000,000
– dormant companies (without any accounting evidence)

 

Corporate Income Tax Rebate and SMEs Cash Grant

 

Singapore government has realized the need of SME for that reason offers two different cupport (depending on whichever amount is higher):

 

Rebate for a Corporate Income Tax
– Startupr can claims 20% corporate income tax rebate on income tax for financial year 2011 (subject to a cap of S$ 10,000)

 

SMEs Cash Grant
– 5% of the Starupr’s revenue (subject to a cap of S$ 5,000)
read more here.

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