Corporate taxation

  • What is the tax rate?

The corporate tax rate is capped at 17% for Year of Assessment (YA) 2010 onwards.

Companies, including companies limited by guarantee with effect from YA 2010, enjoy partial tax exemption on normal chargeable income (excluding Singapore franked dividends) of up to $300,000 and tax exemption for new start-up companies.

However, the tax exemption scheme for new start-up companies will not be extended to investment holding companies and companies engaged in property development activities that are incorporated after 25 Feb 2013. These companies will still enjoy the partial tax exemption. For full details, see IRAS website.

In addition, companies will receive a 30% Corporate Income Tax Rebate (CIT) capped at $30,000 for each YA for 3 years from YA 2013 to YA 2015. For full details, see IRAS website .

For YA 2012, companies will be granted a one-off 5% SME cash grant. For full details, see IRAS website .

For YA 2011, companies will receive a 20% CIT Rebate or a 5% SME cash grant, whichever is the higher amount. For full details, see IRAS website.

  •  Who can be taxed at the corporate rate?

Companies, business trusts and branches of foreign companies are taxed at the corporate tax rate. There is no difference in income tax rates between local and foreign companies.

  • When is a company resident in Singapore?

A company is regarded as resident in Singapore for tax purposes if its management and control are exercised in Singapore.

  • What types of income is a company liable to be taxed on?

As Singapore adopts a territorial concept of taxation, companies are liable to pay tax on income accrued in or derived from Singapore, or income received in Singapore from outside Singapore in respect of gains or profits from any trade or business; income from investment such as dividends, interest and rental; royalties, premiums and any other profits from property; or other gains of an income nature. Receipts that are capital in nature are not taxable.

  •  Can trading losses be offset?

Trading losses may be offset against all income received in the same accounting period, or carried forward indefinitely and offset against future trading profits, subject to the satisfaction of a substantial shareholding test.

Losses up to $100,000 ($200,000 for YA 2009 and YA 2010) incurred in a current year may be carried back one year (3 years for YA 2009 and 2010).

  •  What are the group reliefs available?

The losses and unutilised capital allowances of one company may be utilised for tax purposes by another company in the same group.  For group relief purposes, a group refers to a Singapore-incorporated parent and all its Singapore-incorporated subsidiaries.

  •  What happens if the company has not received a tax return?

IRAS will send a Form C / Form C-S filing package to the company’s registered address in April of each year, starting from the second year following its year of incorporation.

For a new company that closed its first set of accounts in the year of incorporation, and has commenced business or was in receipt of income, please request for a tax return filing package from IRAS by May of the following year. The request can be made by downloading, completing and submitting the Request for Income Tax Return (Form C/ Form C-S) and Notification of New Accounting Year-End form to IRAS.

For other companies that have not received a Form C / Form C-S filing package by end of May, they may download a paper copy of Form C / Form C-S from the IRAS website for completion.

  •  When is the statutory deadline of tax filing of returns?

From YA 2009 onwards, the statutory deadline for the filing of tax returns is by 30 November (or 15 December for qualifying companies that e-file Form C-S).  Beyond this, no extension of time will be granted by IRAS.

  •  When must the amount of tax payable be paid?

A Notice of Assessment (NOA) based on estimated chargeable income furnished by the taxpayer or raised by the Comptroller of Income Tax will be issued. The tax payable under the assessment must be paid within one month from the date of the NOA issued.

When the tax assessment is revised subsequently based on tax computations and returns filed, an amended or additional NOA is issued by the Comptroller.

  •  What happens if I disagree with the assessment?

Where the taxpayer disagrees with the assessment, an objection must be raised within 30 days from the date of service of the NOA.  In spite of any objection lodged against tax assessments, any additional tax payable must be paid within one month from the date of the NOA.

  •  What are the time limits for objections and appeals?

For a notice of objection against an assessment, it must be lodged with the Comptroller within 30 days of the date of the NOA.

For request to refer to the Board of Review, a written notice of appeal must be made in duplicate within 30 days from the date of issue of the Comptroller’s “Notice of Refusal to Amend” an assessment. This must be followed, within a further 30 days, by lodgment of a petition of appeal, in quadruplicate, stating the grounds of appeal.

For notices of appeals to the High Court, the time limits are as laid down in procedures governing appeals to the High Court in civil matters.