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

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

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.

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.

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

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

YA 2018

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

YA 2016

YA 2017

YA 2018

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.

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.