General Rule for All Companies

A company is taxed on the income earned in the preceding financial year. This means that income earned in the financial year 2018 will be taxed in 2019.

Basis Period and Year of Assessment

In tax terms, using the same example as above, 2019 is the Year of Assessment (YA). In other words, the YA is the year in which your income is assessed to tax.

To assess the amount of tax, IRAS looks at the income, expenses, etc. during the financial year. This financial year is known as the "basis period".

The basis period is generally a 12-month period preceding the YA.

Examples Based on Different Financial Year Ends

Financial Year EndBasis PeriodYA
31 Mar of each year1 Apr 2017 - 31 Mar 20182019
30 Jun of each year1 Jul 2017 to 30 Jun 20182019
31 Dec of each year1 Jan 2018 - 31 Dec 20182019

The same rule applies to new companies.

Corporate Tax Rate

With effect from YA 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.

Tax Schemes to Lower Tax Payable

(1) Tax Exemption Scheme for New Start-Up Companies

Under the scheme, qualifying new companies are given the following tax exemption for the first three consecutive YAs where the YA falls in:

YA 2020 onwards

  • 75% exemption on the first $100,000 of normal chargeable income; and
  • A further 50% exemption on the next $100,000 of normal chargeable income.

YA 2010 to 2019

  • Full exemption on the first $100,000 of normal chargeable income; and
  • A further 50% exemption on the next $200,000 of normal chargeable income.

For more details on the tax exemption scheme for new start-up companies and the qualifying conditions, please refer to Common Tax Reliefs That Help Reduce The Tax Bills

(2) Partial Tax Exemption for all companies

All companies including companies limited by guarantee can enjoy the following tax exemption:

YA 2020 onwards

  • 75% exemption on the first $10,000 of normal chargeable income; and
  • A further 50% exemption on the next $190,000 of normal chargeable income.

YA 2010 to 2019

  • 75% tax exemption on the first $10,000 of normal chargeable income; and
  • A further 50% exemption on the next $290,000 of normal chargeable income.

 For more details on the partial tax exemption scheme, please refer to Common Tax Reliefs That Help Reduce The Tax Bills.

 (3) Corporate Income Tax Rebate

Corporate income tax rebate is given to all companies to ease business costs and support restructuring by companies and is applicable for YA 2013 to YA 2019.

All companies will receive a corporate income tax rebate of the following: 

  • 20% corporate income tax rebate, capped at $10,000 for YA 2019;
  • 40% corporate income tax rebate, capped at $15,000 for YA 2018;
  • 50% corporate income tax rebate, capped at $25,000 for YA 2017;
  • 50% corporate income tax rebate, capped at $20,000 for YA 2016; and
  • 30% corporate income tax rebate, capped at $30,000 per YA for YA 2013 to YA 2015.  

Corporate income tax rebate is computed on the tax payable after deducting tax set-offs (e.g. foreign tax credit).

For more details on corporate income tax rebate and how the corporate income tax rebate is computed, please refer to Corporate Tax Rates, Corporate Income Tax Rebates and Tax Exemption Schemes.

 

Attribution of Profits/ Losses for New Companies

For details on how to attribute the profits/ losses of new companies where the first set of accounts cover more than 12 months, please refer to the Basic Guide for New Companies.

 

Tax Forms That Companies Must Submit Yearly

All companies need to submit two corporate income tax returns to IRAS every year:

Key Milestones in a Corporate Income Tax Filing Season for a Company

This flowchart (75KB) summarises the key milestones and important dates to note in a corporate income tax filing season for a company.

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