Introduction

Incorporating your business in Singapore can offer many advantages, including a stable political climate, a business-friendly environment, and a highly skilled workforce. One of the key factors that make Singapore an attractive destination for businesses is its tax regime. In this blog, we will discuss what you need to know about taxes when incorporating your business in Singapore.

Corporate Tax Rates

The corporate tax rate in Singapore is currently 17%. This rate is lower than many other countries in the region and makes Singapore an attractive destination for businesses. The tax system in Singapore is straightforward, and there are various tax incentives and exemptions available to businesses. For example, newly incorporated companies can enjoy a full tax exemption on the first S$100,000 of taxable income for the first three consecutive years.

Goods and Services Tax (GST)

The Goods and Services Tax (GST) in Singapore is a value-added tax that is currently set at 7%. Businesses that are registered for GST are required to charge and collect GST from their customers on their behalf. They are also able to claim back any GST paid on business purchases as input tax credits.

Personal Income Tax

Singapore has a progressive personal income tax system. The tax rates range from 0% to 22%, with higher earners paying a higher rate of tax. Singapore has a competitive personal income tax system compared to many other countries in the region, making it an attractive destination for high-net-worth individuals and expatriates.

Withholding Tax

Withholding tax is a tax that is levied on payments made to non-residents for services performed in Singapore. The withholding tax rate in Singapore is 15%. However, this rate can be reduced or eliminated under the provisions of double tax treaties that Singapore has with other countries.

Property Tax

Property tax is a tax that is levied on the ownership of property in Singapore. The property tax rate in Singapore is progressive, ranging from 0% to 20%. The property tax is payable by the property owner and is based on the annual value of the property.

Conclusion

Incorporating your business in Singapore can offer many advantages, including a stable political climate, a business-friendly environment, and a highly skilled workforce. When considering incorporating your business in Singapore, it is important to understand the tax regime. Singapore has a straightforward tax system with low corporate tax rates and various tax incentives available to businesses. It is also important to understand the personal income tax, withholding tax, and property tax regime in Singapore. With the right tax planning, incorporating your business in Singapore can be a smart choice for your business.