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All tax rates in Singapore are simple, transparent and fairly low. For example, the corporate tax rate is 17% flat for both foreign and local entrepreneurs. On top of that, the Singapore government supports startups by giving exemptions for the first three years after incorporation. And since Singapore and India have a Double Taxation Agreement, you’re protected from being taxed twice on the same income.
Theprovides tax cuts for the first 3 years of operation. Starting from the financial years 2019 and 2020 the rules translate into the following effective rates:
Check what rate you’ll pay on your exact income
After the first 3 assessment years have expired, you can receive aHere are the effective tax rates:
Find a detailed calculation on your income
Singapore has a one-tier tax structure: you only pay 17% corporate tax and there are exemptions for SME that make effective rate even lower. Tax on dividends is exempted.
In India, you pay twice: 25% corporate tax and then 15% tax on dividends. The result can be 4.5 times more than you’d pay in Singapore. Let’s do the math comparing two mature companies with the same profit:
|Tax on profit||25%
(with PTE exemption)
|Tax on dividends||15%
See detailed calculation of Singapore corporate tax
It is available within the first 3 years after you’ve opened a company in Singapore.
Tax on Dividends is exempt, so is Capital Gains Tax. There’s a Goods and Services Tax (GST) on supplies made in Singapore but your company only has to register for it if your turnover grows over S$1,000,000. As a GST-registered company, you have to charge GST on your supply. The upside is you can claim GST suffered on your purchases. If you mainly export your goods abroad, you may apply for an exemption from GST registration.
|Capital Gains Tax||0%||15-20%|
|Tax on Dividends||0%||10%|
|Personal Income Tax||0% - 22%
|0% - 30%
See also: How do dividends work in Singapore?
Taxes are filed annually with IRAS (the tax authority) by November 30th. You report on your income for the previous year. For example, a report on 2018 income is submitted on November 30th, 2019.
You also get to choose the exact evaluation period. It doesn’t have to match a calendar year. For example, if you’ve incorporated in October, you can report your income from the 1st of October to the 30th of September.
Annual reporting is a service regularly provided by local agencies. As they process your documents, they will advise on possible changes needed to qualify for tax exemptions.
Closing date of your evaluation year
|30 Sep||31 Mar|
Your evaluation year. Choose convenient dates.
|1 Oct 2017
to 30 Sep 2018
|1 Apr 2018
to 31 March 2019
|Year of Assessment (YA)
When you submit the report
|Tax Filing Deadline
Always 30 Nov
|30 Nov 2019||30 Nov 2020|
Yes, if the IRAS thinks your “control and management” happens elsewhere. To comply, your board of directors has to meet and make strategic decisions in Singapore. Having a local executive also helps convince IRAS that your company is resident.
Losing residency means you won’t get most of the exemptions and benefits. Good news is that residency is evaluated on a yearly basis so you can apply again the following year.
The personal tax rate is progressive from 0% to 22%. Check the exact ratesIf you buy a property, tax on property is progressive from 0 to 16%.
This article was written by experts at Osome – online Incorporation, Secretary, and Accounting in Singapore. We help Indian entrepreneurs to start and run business, including tax management and filing. We respond fast 24/7 in a secure chat. Learn more and get a free consultation on osome.com