Many business owners from other countries opt to launch or expand their operations in Singapore due to the country’s low corporation tax rate on chargeable income. In Singapore, the rate is 17 percent of taxable income.

Strategies for minimising your company’s Singaporean tax bill

Companies in Singapore might benefit from corporation tax refunds that change from year to year (YAs). For the year of assessment 2018, this rate is 40% of the corporation tax that is outstanding (with a maximum of S$15,000); for the year of assessment 2019, this rate is 20% of the corporate tax that is payable (with a cap of S$10,000). In order to reduce your Singapore corporation tax rates even lower, you may want to take advantage of the various programmes and incentives offered by the Singaporean government. With their help, you may pay even less in Singapore’s already-low corporation tax rate. These five main approaches will be covered in this article. To Save On Your Corporate Tax in Singapore this is important.

SUTE (Startup Tax Exemption Scheme) and PTES (Partial Tax Exemption) (PTE)

The government of Singapore created the SUTE to encourage entrepreneurship and the growth of Singaporean firms. The most recent iteration of SUTE, as detailed in Singapore’s 2018 Budget, exempts the following:

50% of the next S$100,000 in chargeable income from a start-up

These exceptions will be in place for the first three consecutive years commencing with YA2020. For the purposes of this initiative, a “start-up” is defined as a Singaporean business that is less than three years old.

A firm must be incorporated in Singapore before it may participate in the SUTE scheme. (Learn more about the procedures involved in forming a corporation in Singapore.)

For the applicable assessment years, you must have been a Singapore tax resident (YAs).

in no year throughout the offering period have more than 20 separate shareholders These individuals must collectively possess less than 10% of the company’s shares, and at least one must own 10% or more.

You’re free to become involved in whatever sector you choose, but please refrain from investment holding and real estate development (for sale or for investment). You will also need the Annual Bookkeeping  services here now.

Partial Tax Exemption (PTE) is a scheme available to Singaporean businesses that do not qualify for SUTE but who meet the following criteria: the company has been incorporated in Singapore for more than three years; there are more than twenty shareholders; the company is engaged in the investment or property development industries; or all of the above apply. Under the PTE system, businesses are excluded from the following rules:

The first S$10,000 of regular chargeable income is taxed at 75%, and the next S$190,000 at 50%.

Corporate Participation in the IPC’s Partnership Program (BIPS)

Under the Business and IPC Partnership Scheme (BIPS), companies in Singapore may deduct 250% of the qualifying expenditures paid when their workers donate their time, offer professional services, or supply services (including secondments) to registered Institutions of Public Character (IPCs).

Conclusion

Institutionalized Persons’ Committees (IPCs) are a kind of tax-exempt or registered charity in Singapore. Donations given to IPCs are eligible for tax receipts. They are held to higher standards than most traditional nonprofits in terms of regulatory compliance and governance. Check the IPC status of a charity by entering their name into the search bar.

Clare Louise