Understanding Singapore Tax System and Tax Rates

Tax filing service in Singapore

Singapore has low taxes and other incentives that have made it a magnet for investors that refer to it as a tax haven. The tax policy and location of the country are some of the key things that make Singapore the gateway for companies considering investing in the Asian economy. Singapore is well known for its attractive corporate and personal tax rates, the absence of capital gains tax, tax relief measures, and a one-tier tax system that’s quite appealing to companies. Investors need to work with corporate service provider Singapore for a better understanding of the tax system and how they can take advantage of it. 

From persons working in Singapore, corporations, partnerships, and all the bodies involved in any trade within the country; all are required to pay tax on all profits. The country follows a territorial basis of taxation where individuals and companies are taxed on income sourced in Singapore. Branch profits, income and dividends are only taxed when it’s remitted in Singapore. As much as the taxation system may look simple, it is complex, and that’s why working with a professional firm for tax filing service in Singapore is essential. 

Types of taxes in Singapore

The resident taxpayers are required to pay a progressive tax on their income with the top marginal rate being at 22%. Income tax is payable by individuals as well as companies and its charged on their income. Engaging a professional firm for tax filing service in Singapore helps with making the whole process easier. Here are some of the key things to consider concerning Singapore tax system and tax rates;

Corporate Tax Rates

The corporate income tax in Singapore stands at a flat rate of 17%. However, the tax can still get lower when several tax incentives that are introduced by the Inland Revenue Authority are taken into consideration. When filing income tax Singapore, you should consider working with a reputable corporate service provider as they are well conversant with all the tax incentives that you can take advantage of. 

Start-up Companies can take advantage of the tax exemption that’s accorded for the first three consecutive business years. The exemption is about S$125,000 of the first S$200,00o income that they make. For a company to qualify for the exemption, it has to be incorporated in Singapore. It should have at least a maximum of 20 shareholders, with one being an individual with a minimum of 10 shares. 

Companies that have not previously claimed tax exemption for their new start-ups can also claim the partial tax exemption that’s available for companies. Working with corporate service provider Singapore can be of great help as they have an in-depth understanding of the tax system, tax rates and tax reliefs that companies can benefit from. 

Tax Breaks

Singapore offers tax exemptions for companies involved in certain industries. These may include breaks for the qualifying foreign banks, global trading companies, and offshore funds. Banks are also eligible for a withholding tax exemption on payments made to non-residents between the periods April 1, 2011, to March 31, 2021. To maximize the tax-exempt offers provided by the Inland Revenue Authority, you should consider working with professionals firms in Singapore for income tax filing Service in Singapore.

Originally published by onestop-ca.com

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