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SINGAPORE CORPORATE TAX RATES
FOR YA 2013

SINGAPORE CORPORATE TAX RATES

Singapore’s tax regime recognizes the importance of easing cashflow for startup companies in their initial
years of operation. Therefore, Singapore extends support in the form of sizeable exemptions.

New Startup Companies* for First 3 Years of Assessment

* Qualifying conditions:
• No more than 20
individual shareholders
throughout basis period
for that YA
• Where there are nonindividual shareholders,
at least 1 shareholder is
an individual holding at
least 10% of the shares.



Companies that do not meet the qualifying conditions would still be
eligible for partial tax exemption.



For All Other Companies - Partial Tax Exemption
Chargeable Income
(SGD)

Exemptions

Effective Tax
Rate

First $100,000

75%

4.25%

Next $200,000

50%

8.50%

Above $300,000

Nil

17.00 %

TAX-FREE DIVIDEND
Tax paid by a company on its chargeable income is the final tax and all dividends
paid to its shareholders are exempt from further taxation.
Last updated on February 18, 2013

0%

Copyright © 2013 Rikvin Pte Ltd

FULL/PARTIAL TAX EXEMPTION
Due to tax exemption schemes, the effective tax rates in Singapore are one of the lowest worldwide and
unlike any other jurisdictions, Singapore is widely respected and well-recognizeable for its rule of law,
transparency and world-class standards.

NEW STARTUP COMPANIES
FOR FIRST THREE YEARS OF ASSESSMENT
Chargeable Income ($)

Estimated Tax (S$)

Effective tax rate

100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
5,000,000
10,000,000

0
8,500
17,000
34,000
51,000
68,000
85,000
102,000
119,000
136,000
816,000
1,666,000

0%
4.25%
5.67%
8.50%
10.20%
11.33%
12.14%
12.75%
13.22%
13.60%
16.32%
16.66%

ALL OTHER COMPANIES PARTIAL TAX EXEMPTION
Chargeable Income ($)

Estimated Tax (S$)

Effective tax rate

100,000
200,000
300,000
400,000
500,000
600,000
700,000

8,075
16,575
25,075
42,075
59,075
76,075
93,075

8.08%
8.29%
8.36%
10.52%
11.82%
12.68%
13.30%

800,000
900,000
1,000,000
5,000,000
10,000,000

110,075
127,075
144,075
824,075
1,674,075

13.76%
14.12%
14.41%
16.48%
16.74%

Online Resources
Singapore Corporate Tax | Singapore Budget 2012 | FAQS on Singapore Corporate Taxation

Last updated on February 18, 2013

Copyright © 2012 Rikvin Pte Ltd

CAPITAL GAINS TAX
Gains that are of a capital nature are not taxed in Singapore. However, where there is a series of
transactions or where the holding period of an asset is relatively short, IRAS may take the view that a
business is being carried on and attempt to assess the gains as trading profits of the company.

SINGAPORE WITHHOLDING TAX
Withholding Tax is part of the overall tax collection mechanism and is applicable to payments made to
non-residents (including employees, business partners and overseas agents). In accordance with IRAS
tax rules, a person has a legal obligation to withhold a percentage of the payment when he makes
payments of a specified nature under the Singapore Income Tax Act to a non-resident and pay the
withheld amount to IRAS. Such amount withheld amount is called Withholding Tax.
Nature of Income

Tax rate

Interest, commission, fee or other payment in connection with any loan or
indebtedness
Royalty or other lump sum payments for the use of movable properties
Payment for the use of or the right to use scientific, technical, industrial or
commercial knowledge or information
Rent or other payments for the use of movable properties
Technical assistance and service fees
Management fees
Time, voyage and bareboat charter fees for the charter of ships
Remuneration payable to Non-resident Director
Proceeds from sale of any real property by a non-resident property trader
Distribution of taxable income (except distribution out of Singapore dividends
from which tax is deducted or deductible under section 44) made by REIT to unit
holder who is a non-resident (other than an individual)

15%
10%
10%
15%
17%*
17%*
0-2%
20%
15%
10%

The withholding tax rates apply when the income is not derived by the non-resident person through
its operations carried out in Singapore. They are to be applied on the gross payment and the resultant
tax payable is a final tax. For operations carried out in Singapore, the tax rates applicable on the gross
payment are as follows:
• Non-resident person (other than individuals) : Prevailing corporate tax rate (17% )
• Non-resident individuals : 20%

Last updated on February 18, 2013

* Prevailing Corporate Tax Rate
Copyright © 2013 Rikvin Pte Ltd

PRODUCTIVITY & INNOVATION CREDIT (PIC)
OPTION 1: CASH PAYOUT OF UP TO S$60,000

To support small and growing businesses which may be cash-constrained, to innovate and improve
productivity, businesses can exercise an option to convert their expenditure into a non-taxable cash payout.
They can convert up to S$100,000 (subject to a minimum of S$400) of their total expenditure in all the six
qualifying activities into cash payouts.

Eligibility criteria
Businesses that can opt for the cash payout are sole-proprietorships, partnerships, companies
(including registered business trusts) that have:

+
3 employees CPF
contribu ons during
the last year

+
Ac ve business
opera ons in Singapore

Expenditure in any of the
six qualifying areas

Qualifying Expenditures

Prescribed
Automa on
Equipment

Training
Expenditures

Last updated on February 18, 2013

R&D
Expenditures

Acquisi on of
Intellectual
Property

Registra on
of Intellectual
Property

Design
Expenditures

Copyright © 2013 Rikvin Pte Ltd

PRODUCTIVITY & INNOVATION CREDIT (PIC)
OPTION 2: TAX CREDIT FOR UP TO S$1.2M
FOR EACH OF THE QUALIFYING ACTIVITIES

Before PIC:
Currently, businesses can typically deduct their expenses at
cost i.e. 100% as part of the general tax regime.

Expenditure

Deduc ons

S$68,000

S$17,000

S$400,000

S$100,000

S$100,000

S$100,000

Tax savings = S$100,000 x 17%

TAX SAVINGS

Qualifying activities

Brief description of qualifying
expenditures under the PIC

Acquisition or Leasing of Prescribed
Automation Equipment

Costs incurred to acquire/lease
prescribed automation equipment

Training Expenditure

Costs incurred on:
In-house training (i.e. Singapore
Workforce Development Agency
(“WDA”) certified, Institute of Technical
Education (“ITE”) certified; or
All external training.

A er PIC:
Businesses can now enjoy 400% deduc on on the cost of
the same expenditure.
Tax savings = S$400,000 x 17%

Acquisition of Intellectual Property
Rights (“IPRs”)

Costs incurred to acquire IPRs for
use in a trade or business (exclude
EDB approved IPRs and IPRs relating
to media and digital entertainment
contents)

Registration of Intellectual Property
Rights (“IPRs”)

Costs incurred to register patents,
trademarks, designs and plant variety

Design Expenditure

Costs incurred to create new products
and industrial designs where the
activities are primarily done in Singapore

Research & Development (“R&D”)

Costs incurred on staff, costs and
consumables for qualifying R&D
activities carried out in Singapore or
overseas, if the R&D done overseas is
related to the taxpayer’s Singapore trade
or business

Total deductions/allowances under the
PIC (as a % of qualifying expenditure)

400% allowance or deduction for
qualifying expenditure subject to the
expenditure cap, 100% allowance or
deduction for the balance expenditure
exceeding the cap

400% tax deduction for qualifying
expenditure subject to the expenditure
cap*. For qualifying expenditure
exceeding the cap for R&D done in
Singapore, deduction will be 150%. For
balance of all other expenses, including
expenses for R&D done overseas,
deduction will be 100%

Notes:
Total expenditure cap for YA 2011 and YA 2012 - $800,000 for each of the six qualifying activities.
Total expenditure cap for YA 2013 to YA 2015 - $1,200,000 for each of the six qualifying activities.

Last updated on February 18, 2013

Copyright © 2013 Rikvin Pte Ltd

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Main Line : (+65) 6320 1888
Fax : (+65) 6438 2436
Email : info@rikvin.com
Website : www.rikvin.com
Reg No 200100602K
EA License No 11C3030

This material has been prepared by Rikvin for the exclusive
use of the party to whom Rikvin delivers this material.
This material is for informational purposes only and has
no regard to the specific investment objectives, financial
situation or particular needs of any specific recipient.
Where the source of information is obtained from third
parties, Rikvin is not responsible for, and does not accept
any liability over the content.

Copyright © 2013 Rikvin Pte Ltd


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