Understanding Singapore Corporate Tax And Its Benefits

By Author: Kenny Alberts
Total Articles: 1
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Singapore is a rapidly growing hub for business in Asia. Many entrepreneurs choose Singapore because of its intricate legislation that protects intellectual property while facilitating business ventures.
Furthermore, Singapore is favourably located at the centre of the expanding Asia economy.Given the favorable location, businesses benefit from the productive alliances with various huge economies while being to maintain the name of a prestigious and reliable jurisdiction. Singapore's corporate tax policy further enhances it as an ideal location for company incorporation by implementing fair and competitive tax rates.For all these reasons Singapore has taken the forefront over the past decade as a globally recognized business nation.

All in all, the main reason behind why Singapore has been so popular with businessmen and corporate entities is that of it's cooperate tax policy.

In Singapore, foreign and local companies pay tax equally. It only emphasized how Singapore value the importance of businesses in the country may it be local or foreign, though it may sound unfair to the locals but this is what the ...
... country practises.
All income from Singapore are taxed-- income remitted in Singapore or derived in Singapore. What this means is a company that is incorporated in Singapore but does most of its business with other Asian countries and receives its income overseas, is legally not liable to tax in Singapore. For some practical reasons, businessmen who wants to set up a company in Singapore are advise to seek a professional guidance regarding Singapore tax policy for them to be able to adhere to the tax incentives and policies accordingly.

The general corporate tax rates that apply in Singapore are as follows. - It should be noted, however, that substantial tax benefits exist for entrepreneurs and start-ups that will be explained later in the article.
There was a reduction of Singapore's corporate tax which was from 18% to 17% in 20210. Depending on the amount of income received, the tax is charged in blocks.The first S$10,000 of income is taxed at a small rate of 4.5%. The next S$290,000 of profits is charged at 8.5% and thereafter, all income is charged at 17%. Therefore, a small company that makes S$8,000 in 2010 will be taxed a mere S$360. A medium sized company that makes S$250,000 in 2010 will be taxed a total of S$20,850, an effective rate of 8.34%. A larger company making S$1 million in 2010 will be taxed a total of S$144,100, an effective rate of 14.41%.

Over the years Singapore has also gained a lot of respect from entrepreneurs specifically, as its corporate tax policy accommodates to the general issues and needs of most newly incorporated companies.In order to assist the procedure of setting up and expanding business in the country, Singapore government has enforced tax exemptions for start-up companies.Newly incorporated companies face costs, including the simple costs of registration, to the costs of hiring and building a company, and the costs of gaining a presence in the market. Unfortunately, not all countries like Singapore understand the need to provide solutions to alleviate concerns and cost of newly built corporations.

In Singapore, there is an exemption of tax for a newly incorporated Singapore for the first annual profit of S$100,000 for the first three years of business.The exemption is applicable to companies that possess the following attributes namely (i) tax residents in Singapore (ii) constitute 20 shareholders or less (iii) a minimum of 10% of its shareholders are individuals.Partial exemption is still applicable, for incorporation that didn't possessed the aforementioned attributes.In addition, the companies who possessed the said attributes would also be able to enjoy the partial exemption on the next S$100,00 of profits aside from the complete exemption. Partial tax exemption involves a 50% tax exemption on a maximum of S$300,000 of profits - S$200,000 for those that benefit from full exemption as well.This also holds true to a 8.5% tax rate on the first S$300,000 of profits, which is mere tax rate for a member of an OECD member.

Without being detrimental to the society in Singapore including its environment and the people, Singapore provides a favorable tax environment for businesses in the country. It becomes a challenge for other nations to also provide a low tax rate for business in their respective countries since Singapore was able to accomplish it while still upholding the nations reputation of efficiency and a high quality of life. Ultimately, tax benefits, amongst Singapore's many other impressive facets, provides a key selling point for entrepreneurs. No wonder, Singapore has continued to be a vital business location not just in Asia but also worldwide.

Author Bio:
Since 1998, Rikvin consultancy has been providing highly professional company incorporation services, both in attractive standard packages as well as customised services. Online incorporation being a hallmark service, other services of Rikvin include Offshore Incorporation, EntrePass/Employment Pass/Personalised work Pass application, GST Registration, Accounting Services, Singapore Corporate Tax Planning & Consulting, and Business Plan Drafting. The firm has successfully helped thousands of foreign entrepreneurs form a Singapore company.