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For companies

A company is taxed at a flat rate on its chargeable income regardless of whether it is a local or foreign company.

The tax rates and tax exemption / rebate for each Year of Assessment (YA) are as follows:

Year of Assessment (YA)
Tax rate
Tax exemption / rebate
From 2010

17%

Partial tax exemption and tax exemption scheme for new start-up companies

Companies, including companies limited by guarantee with effect from YA 2010, will continue to enjoy the partial tax exemption and tax exemption for new start-up companies, as provided in YA 2008 and YA 2009.

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. Please refer to Tax exemption scheme for new start-up companies for details and the qualifying conditions.

YA 2013, YA 2014 and 2015
Companies will be granted a 30% Corporate Income Tax (CIT) Rebate capped at $30,000 for each YA.

YA 2012
For YA 2012, companies will be granted a one-off 5% SME Cash Grant.

YA 2011
For YA 2011, companies will be granted a 20% CIT Rebate or 5% SME Cash Grant, whichever is the higher amount.

2008 and 2009
18%

Partial tax exemption for companies
Effective from YA 2008, a partial tax exemption is given to companies on normal chargeable income* (excluding Singapore franked dividends) of up to $300,000 as follows:

Exempt amount

First  $  10,000 @ 75% = $    7,500
Next  $290,000 @ 50% = $145,000
Total $300,000      $152,500

Tax exemption scheme for new start-up companies

Since YA 2005, a qualifying company can claim for full tax exemption on the first $100,000 of normal chargeable income* (excluding Singapore franked dividends) for its first three consecutive YA.

Effective from YA 2008, a further 50% exemption is given on the next $200,000 on a qualifying company's normal chargeable income* (excluding Singapore franked dividends).

The tax exemption for new start-up companies on chargeable income of up to $300,000 is as follows:

Exempt amount

First  $100,000 @ 100% = $100,000
Next  $200,000 @  50% = $100,000
Total $300,000      $200,000

A company that does not qualify for a tax exemption for new start-up companies will be given partial tax exemption.

2005 to 2007
20%

Partial tax exemption for companies

For YA 2005 to YA 2007, a partial tax exemption is given to companies on normal chargeable income* (excluding Singapore franked dividends) of up to $100,000 as follows:

Exempt amount

First  $ 10,000 @ 75% = $  7,500
Next  $ 90,000 @ 50% = $45,000
Total $100,000      $52,500

Tax exemption scheme for new start-up companies 

Effective from YA 2005, a qualifying company can claim for a full tax exemption on the first $100,000 of normal chargeable income* (excluding Singapore franked dividends) for its first three consecutive YA.

The tax exemption on the $100,000 chargeable income is as follows:

Exempt amount

First $100,000 @ 100% = $100,000

A company that does not qualify for tax exemption for new start-up companies will be given partial tax exemption.

* Normal chargeable income refers to income to be taxed at the prevailing corporate tax rate.

 

FAQs

The exempt amount on normal chargeable income of $280,000 is computed as follows:

First  $  10,000 @ 75% = $    7,500
Next  $270,000 @ 50% = $135,000
Total $280,000      $142,500

 

Your company’s tax payable for YA 2014 is therefore computed as follows:

Chargeable income (before exempt amount) $   280,000
Less: Exempt amount $  (142,500)
Chargeable income (after exempt amount) $   137,500
   
Tax payable @ 17% $ 23,375.00
Less: Corporate Income Tax (CIT) Rebate [30% x $23,375] $  (7,012.50)
Net tax payable $ 16,362.50
   

 

As your company qualifies for the tax exemption scheme for new start-up companies in YA 2014, the exempt amount on normal chargeable income of $450,000 is computed as follows:

First  $100,000 @ 100% = $100,000
Next  $200,000 @   50% = $100,000
Total $300,000      $200,000

 

Your company’s tax payable for YA 2014 is therefore computed as follows:

Chargeable income (before exempt amount) $    450,000
Less: Exempt amount $   (200,000)
Chargeable income (after exempt amount) $    250,000
   
Tax payable @ 17% $ 42,500.00
Less: Corporate Income Tax (CIT) Rebate [30% x $42,500] $(12,750.00)
Net tax payable $ 29,750.00
   

 

The exempt amount on normal chargeable income of $50,000 is computed as follows:

First  $10,000 @ 75% = $  7,500
Next  $40,000 @ 50% = $20,000
Total $50,000      $27,500

 

Your company’s tax payable for YA 2014 is therefore computed as follows:

 

Normal Income (@17%)

Concessionary Income (@10%)

Total

Chargeable income (before exempt amount) $    50,000        60,000     110,000
Less: Exempt amount $   (27,500)     [Note] (0)      (27,500)
Chargeable income (after exempt amount) $     22,500         60,000       82,500  
       
Tax payable @ 17% $ 3,825.00     6,000.00     9,825.00
Less: Corporate Income Tax (CIT) Rebate [30% x $9,825] $(1,147.50)    (1,800.00)    (2,947.50)
Net tax payable $ 2,677.50        4,200.00     6,877.50  
       

Note: Nil as the partial tax exemption is not applicable to concessionary income.

 

 

The exempt amount under the partial tax exemption scheme and tax payable for YA 2014 is computed as follows:

 

Normal Income (@17%)

Concessionary Income (@10%)

Total

Net trade income/(loss) $           650,000         1,000,000          (350,000)
Section 37B setoff (1,000,000 x 10/17) $          (588,235)         1,000,000           411,765 
Chargeable income (before exempt amount) $             61,765                         -                       61,765
Less: Exempt Amount $[Note]  (33,383)                        -            (33,383)
Chargeable income (after exempt amount) $             28,382                         -             28,382  
       
Tax payable @17% / 10% $           4,824.94                       -          4,824.94
Less: Corporate Income Tax (CIT) Rebate [30% x $4,824.94] $         (1,447.48)                       -         (1,447.48)
Net tax payable $          3,377.46                         -          3,377.46 
       
 

Note: The exempt amount on normal chargeable income of $61,765 is computed as follows:

First  $10,000 @ 75% = $  7,500
Next  $51,765 @ 50% = $25,883
Total $61,765      $33,883

 

 

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Last Updated on 25 July 2014


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