Corporate Tax Rates, Corporate Income Tax Rebates, Tax Exemption Schemes and SME Cash Grant

Tax Rates, Corporate Income Tax Rebates, Tax Exemption Schemes and SME Cash Grant for both local and foreign companies.

The table below gives an overview of the Corporate Tax Rates, Corporate Income Tax Rebates, Tax Exemption Schemes and SME Cash Grant.

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 can enjoy the partial tax exemption and tax exemption for new start-up companies, as provided in the tables below.

Partial tax exemption for companies

Chargeable income

% exempted from Tax

Amount exempted from Tax

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

Chargeable income

% exempted from Tax

Amount exempted from Tax

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

For more details on the above exemptions, please refer to Common Tax Reliefs That Help Reduce The Tax Bills.

YA 2018

Companies will be granted a 20% Corporate Income Tax Rebate capped at $10,000. New!

YA 2017

Companies will be granted a 50% Corporate Income Tax Rebate capped at $25,000. Revised!

YA 2016

Companies will be granted a 50% Corporate Income Tax Rebate capped at $20,000.

YA 2013, YA 2014 and 2015

Companies will be granted a 30% Corporate Income Tax 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% Corporate Income Tax Rebate or 5% SME Cash Grant, whichever is the higher amount.

Corporate Tax Rates

With effect from Year of Assessment 2010, a company is taxed at a flat rate of 17% on its chargeable income regardless of whether it is a local or foreign company.

Year of Assessment (YA)

Tax Rate

From 2010

17%

2008 to 2009

18%

2005 to 2007

20%

Corporate Income Tax Rebate for YAs 2013 to 2018

Corporate Income Tax (CIT) Rebate is given to all companies* to help them deal with rising business costs. The Minister for Finance has announced in Budget 2017 that the CIT Rebate cap for YA 2017 will be raised from $20,000 to $25,000 to help companies cope with the economic uncertainty and continue restructuring. The rebate percentage will remain unchanged, at 50% of the corporate tax payable. In addition, the CIT rebate will be extended to YA 2018 at a reduced rate of 20% of the corporate tax payable, subject to a cap of $10,000.

The table below summarises the CIT Rebate percentage and cap given.

Year of Assessment (YA)

Corporate Income Tax Rebate

Capped at

201820%$10,000
201750%$25,000

2016

50%

$20,000

2013 to 2015

30%

$30,000

The rebate will not apply to income derived by a non-resident company that is subject to final withholding tax.

Companies need not factor in the Corporate Income Tax Rebate when filing the Estimated Chargeable Income and the Income Tax Return (Form C-S/ C) as IRAS will compute it and allow the Corporate Income Tax Rebate automatically.

*includes Registered Business Trusts, non-resident companies that is not subject to a final withholding tax and companies that receive income taxed at a concessionary tax rate.

How the Corporate Income Tax Rebate is Computed

The rebate will be computed on the tax payable after deducting the tax set-offs (e.g. foreign tax credit).

Example (1): Company with no chargeable income

Chargeable income

=

Nil

Tax payable

=

Nil

Corporate Income Tax Rebate does not apply as there is no tax to be paid.

Example (2): Company with income taxable at 17%

YA 2017

Chargeable income (after exempt amount)

$500,000

Tax payable at 17%

$85,000

Less: Corporate Income Tax Rebate ($85,000 x 50%, restricted to cap of $25,000)

$25,000

Net tax payable

$60,000

YA 2018

Chargeable income (after exempt amount)

$500,000

Tax payable at 17%

$85,000

Less: Corporate Income Tax Rebate ($85,000 x 20%, restricted to cap of $10,000)

$10,000

Net tax payable

$75,000

Example (3): Company with income taxable at 17% and a concessionary rate of 10%

Chargeable income @10%

$180,000

Chargeable income @17% (after exempt amount)

$500,000

YA 2016

Gross tax payable
($180,000 x 10% + $500,000 x 17%)

$103,000

Less: Corporate Income Tax Rebate
($103,000 x 50% = $51,500; restricted to cap of $20,000)

$20,000

Net tax payable

$83,000

YA 2017

Gross tax payable
($180,000 x 10% + $500,000 x 17%)

$103,000

Less: Corporate Income Tax Rebate
($103,000 x 50% = $51,500; restricted to cap of $25,000)

$25,000

Net tax payable

$78,000

YA 2018

Gross tax payable
($180,000 x 10% + $500,000 x 17%)

$103,000

Less: Corporate Income Tax Rebate
($103,000 x 20% = $20,600; restricted to cap of $10,000)

$10,000

Net tax payable

$93,000

SME Cash Grant for YA 2012

The SME Cash Grant is given to companies (including registered business trusts) to offset high costs during business slowdowns and is aimed at providing support for companies that face increased business costs.

For YA 2012, companies are granted a one-off SME Cash Grant pegged at 5% of total revenue*, up to a maximum of $5,000. The revenue refers to the main income source declared in the company's YA 2012 income tax return.

To be eligible for the SME cash grant, the company must have made CPF contributions for at least one employee during the basis period for YA 2012; the employee must not be a shareholder of the company.

* If the revenue as per your accounts is for a period that covers two YAs, one of which is YA 2011 or YA 2012, please provide a breakdown of your revenue for the basis period relating to YA 2011 and YA 2012 in your tax computation. This is to allow IRAS to compute the correct amount of SME cash grant/ rebate for the relevant YA.

Company A was incorporated in Singapore on 15 Apr 2010 and commenced business on the same day. The financial year end of the company is 30 Jun.
Company A's first set of accounts is prepared for the period from 15 Apr 2010 to 30 Jun 2011.
As the first set of accounts covered a period of more than 12 months, there are two relevant YAs as follows:

YABasis Period

2011 (1st YA)

15 Apr 2010 - 30 Jun 2010

2012 (2nd YA)

1 Jul 2010 - 30 Jun 2011

The company has to prepare tax computations for the two YAs for submission in 2012. It has to also provide a breakdown of its revenue for the basis period from 1 Jul 2010 to 30 Jun 2011 in the tax computation for YA 2012. Where the breakdown is not provided, IRAS may use the time apportionment basis to compute the applicable amount of revenue.


Payment of SME Cash Grant
Companies do not need to apply for the SME Cash Grant. Upon the company's filing of the YA 2012 income tax return, IRAS will compute and advise the SME Cash Grant amount. The YA 2012 SME Cash Grant has ceased on 31 May 2014 and no SME Cash Grant will be disbursed for any company's YA 2012 filing that is received after 31 May 2014.

New! Any enquiries or appeals regarding SME Cash Grant must be submitted to IRAS by 31 Mar 2018.

Corporate Income Tax Rebate and SME Cash Grant for YA 2011

To help companies cope with the rising costs of doing business, the Minister for Finance has announced in Budget 2011 that for Year of Assessment (YA) 2011, companies will receive:

  1. A Corporate Income Tax Rebate; or
  2. A SME Cash Grant,

whichever is the higher amount.

Corporate Income Tax Rebate

A 20% Corporate Income Tax Rebate, subject to a cap of $10,000, will be allowed to each company for YA 2011. The rebate will be computed on the tax payable amount after deducting tax set-offs (e.g. double tax relief and unilateral tax credit).

One-Off SME Cash Grant

Recognising that many small companies are not taxable and would not be able to benefit from the Corporate Income Tax Rebate, a one-off SME cash grant of 5% on total revenue for YA 2011*, subject to a cap of $5,000 will be separately given to them. Like the Corporate Income Tax Rebate, this SME cash grant initiative is aimed at providing one-off support for companies that face increased business costs.

* If the revenue as per your accounts is for a period that covers two YAs, one of which is YA 2011, please provide a breakdown of your revenue for the basis period relating to YA 2011 in your tax computation. This is to allow IRAS to compute the correct amount of SME cash grant/ tax rebate for YA 2011.

Please refer to the example above on how to provide a breakdown of its revenue for the basis periods for the two YAs.


Scope and Conditions

Corporate Income Tax Rebate

  • Corporate Income Tax Rebate will be given to all companies (including Registered Business Trusts) regardless of tax residency status and eligibility for concessionary corporate tax rate, except income of non-resident company that is subject to final withholding tax.

SME Cash Grant

  • To be eligible for the SME cash grant, the company or registered business trusts must have made CPF contribution for at least one employee during the basis period of YA 2011. If no CPF contribution is made, the company or registered business trust will only be eligible for the Corporate Income Tax Rebate;
  • Companies and registered business trusts will automatically receive the higher of Corporate Income Tax Rebate amount or the SME cash grant amount. Corporate Income Tax Rebate will be given if both amounts are the same.

Calculator
You may use this calculator (382KB) to estimate your YA 2011 Corporate Income Tax Rebate or SME cash grant.

Payment
Companies do not need to apply for the Corporate Income Tax Rebate or SME cash grant. IRAS will compute the amount of the Corporate Income Tax Rebate or the SME cash grant which a company will receive when companies file their YA 2011 income tax return (i.e. Form C) by the 30 Nov filing deadline.

New! Eligible companies would generally have received their SME Cash Grants. IRAS will process and pay SME Cash Grant to companies till 31 Dec 2017. Any enquiries or appeals regarding SME Cash Grant must be submitted to IRAS by 31 Mar 2018.

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