Singapore
  • Hong Kong
  • UK
  1. Osome Blog Singapore
  2. What Taxes Do UK Entrepreneurs Pay in Singapore?

What Taxes Do UK Entrepreneurs Pay in Singapore?

We explain the differences between UK and Singapore tax systems, the Double Tax Treaty and exemptions available to startups.

Need help optimizing your taxes? Our professional accountants in Singapore are at your service.

What are the benefits of Singapore tax system?

The tax rates in Singapore are simple, transparent and fairly low. 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 the United Kingdom have a Double Taxation Agreement, you’re protected from being taxed twice on the same income.

How do Singapore and UK corporate taxes compare?

While the tax structures are similar, Singapore rates are lower. And since Singapore and United Kingdom have a Double Taxation Agreement, you’re protected from being taxed twice on the same income. And while in Singapore there is no tax on capital gains, UK tax rate on capital gains is 20%.

Let’s do the math comparing two mature companies with the same profit:

Profit: ‎£50,000

United Kingdom Singapore
Tax on profit 20% 8.02%
Total tax £10,000 £4,009


The effective Singapore tax rate above is calculated with a PTE exemption that we explain below.

What exemptions are there for start-ups?

The Start-Up Tax Exemption (SUTE) provides tax cuts for the first 3 years after Singapore company registration. For the financial years 2019 and 2020 the rules translate into the following effective rates:

  • 4.25% on the first S$100,000 (£56,700) of normal chargeable income
  • 8.5% on the next S$100,000 (£56,700)

After the first 3 assessment years have expired, you can receive a Partial Tax Exemption (PTE). Here are the effective tax rates:

  • 4.25% for the first S$10,000 (£5,670) of normal chargeable income
  • 8.5% on the next S$190,000 (£107,700)

How can I qualify for the start-up tax exemption?

It is available within the first 3 years after you opened a company in Singapore.

  • At least one shareholder has to be a person, not a company and hold more than 10%.
  • No more than 20 shareholders altogether.
  • Investment holding and property development companies cannot apply.
  • You have to be a tax resident in Singapore.

What are other taxes on business?

Singapore declared dividends are not taxable, neither are capital gains. There’s 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 (£567,000). As a GST-registered company, you have to charge GST on your supply. The upside is you can claim the GST suffered on your purchases. If you mainly export your goods abroad, you may apply for an exemption from GST registration.

Tax Singapore United Kingdom
Corporate Tax 17% 20%
Capital Gains Tax 0% 20%
Tax on Dividends 0% 0%
GST 7%
after S$1m turnover
20%
Personal Income Tax 0%–22%
progressive rate
0%–45%
progressive rate

When and how do I submit my taxes?

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.

FYE
Closing data of your evaluation year
30 Sep 31 Mar
Basis period
Your evaluation year, choose convenient dates
1 Oct 2017
to 30 Sep 2018
1 Apr 2018
to 31 Mar 2019
Year of Assessment (YA)
When you submit the report
2019 2020
Tax Filing Deadline
Always 30 Nov
30 Nov 2019 30 Nov 2020

Can my company lose Singapore tax residency?

Yes, if IRAS thinks your “control and management” happens elsewhere. So one important requirement is that 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.

If I move to Singapore, what personal taxes will I pay?

The personal tax rate is progressive from 0% to 22%. If you buy a property, tax on property is progressive from 0 to 16%.

Personal tax rate

Chargeable income (S$) Estimated tax (S$) Effective tax rate
first 20,000 0 0%
next 10,000 200 2.0%
next 10,000 350 3.5%
next 40,000 2,800 7.0%
next 40,000 4,600 11.5%
next 40,000 6,000 15.0%
next 40,000 7,200 18.0%
next 40,000 7,600 19,0%
next 40,000 7,800 19,5%
next 40,000 8,000 20.0%
over 320,000 44,550 22.0%

Next steps

If you want to register a Singapore company from UK or you need more information, our experts are here to help. Get a free consultation in our secure chat.

This article was written by experts at Osome – online service for Incorporation, Secretary, and Accounting in Singapore. We help entrepreneurs from the UK 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

Share this post:

Tips to run your business smarter.
Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

You might like it

E-commerce

Which Is The Better Payment Gateway: Paypal or Stripe?

As an e-commerce business owner, you would have heard of payment gateways PayPal and Stripe. With these two big platforms being the most popular online payment gateways, you may face a dilemma when it comes to deciding which payment gateway to use.

E-commerce

Tips For Amazon Sellers To Manage Your Inventory Better

Brand owners and sellers of all scales struggle to seek a well-balanced supply chain. Additionally, Amazon has its own inventory management rules, which makes everything even tougher.

E-commerce

Top 10 Best E-commerce Hosting Services in 2021

When you are setting up your e-commerce shop, the right hosting provider can make all the difference. However, with a variety of options out there, choosing the best one can be confusing.

E-commerce

What You Need To Include In An Invoice for E-commerce

For business owners who own and run an online store, you probably already know that invoices must be sent to your customers for the services you provide or the goods you sell, as a form of purchase proof.

E-commerce

Guide to E-commerce Fulfillment & Shipping for Singapore E-commerce Sellers

E-commerce fulfilment and shipping for your Singapore-based business matters. This guide unpacks how the right strategy can influence your bottom line and help you find what’ll work best for you - whether it’s in-house fulfilment, dropshipping or a solid partnership with a 3PL.

E-commerce

E-commerce Tips: How To Use Packaging Inserts to Increase Revenue

Improving customer retention is one of the effective ways to create brand awareness. Additionally, placing your focus on existing customers also means that you do not have to splurge extra dollars on marketing.

Entrepreneur's Bootcamp

The Cost of Living as a Foreign Business Owner in Singapore

When choosing Singapore as a base to run your business is the cost of living, you need to consider the cost of living.

E-commerce

5 Most Lucrative E-Commerce Niches In 2021

If you’re just starting or looking to go in a new direction, finding a lucrative niche will make every part of running your e-commerce business easier. This article will look at the trending e-commerce niches to consider.

Entrepreneur's Bootcamp

How To Pick the Right Company Name

Choosing a business name is not that simple, and you may wreck your brains over choosing one, only to find out that ACRA did not approve its registration.

Running My Business

Should You Consider Using Cryptocurrency in Your Business Operations?

There are more than 4,000 cryptocurrencies that exist. Before you jump on the bandwagon, assess whether cryptocurrencies are suitable to be used in your business.

E-commerce

7 Ways To Accept Payments For Your Online Store

Many payment options allow you to accept credit cards and other payment types. How do you choose which method to include on your website?

E-commerce

Customer Retention: How To Keep Customers Coming Back Repeatedly

Every business likes new customers, especially when the customer uses their services again and again. Existing customers help in creating a solid foundation of your business that provides a steady revenue stream that costs less than acquiring new customers.

Tips to run your business smarter. Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

We’re using cookies! What does it mean?