Tax Rate for Different Business Entity Types in Singapore
There are several reasons why Singapore is ideal for setting up business operations here. One of the more prominent benefits that are not usually available in other countries is the tax rate.
There are no tax on overseas income, no capital gains tax, no dividend income tax, no tax on assets acquired as inheritance or as gifts and more such as Avoidance of Double Taxation via the bilateral treaties signed by with many countries.
Corporate Tax
Only income that is sourced from or received in Singapore is taxed. Singapore corporate tax is levied at a flat rate of 17% on chargeable income.
Sole Proprietorship / Partnerships
Generally in most cases, the type of tax rates applied to sole proprietors is linked with the Personal Income Tax. The rates applicable to this group range between 2% and 22% in the case of individuals.
Chargeable Income Income Tax Rate (%) Gross Tax Payable ($)
| Chargeable Income | Income Tax Rate (%) | Gross Tax Payable ($) |
|---|---|---|
| First $20,000 Next $10,000 | 0 2 | 0 200 |
| First $30,000 Next $10,000 | - 3.50 | 200 350 |
| First $40,000 Next $40,000 | - 7 | 550 2,800 |
| First $80,000 Next $40,000 | - 11.5 | 3,350 4,600 |
| First $120,000 Next $40,000 | - 15 | 7,950 6,000 |
| First $160,000 Next $40,000 | - 18 | 13,950 7,200 |
| First $200,000 Next $40,000 | - 19 | 21,150 7,600 |
| First $240,000 Next $40,000 | - 19.5 | 28,750 7,800 |
| First $280,000 Next $40,000 | - 20 | 36,550 8,000 |
| First $320,000 In excess of $320,000 | - 22 | 44,550 |
Extra tax benefits for newly registered Singaporean companies:
For the first 3 years of assessment, a Singapore tax-resident company may qualify for tax exemption under the Start-Up Tax Exemption Scheme. This scheme allows newly-incorporated companies to enjoy 75% tax exemption on the first S$100,000 of chargeable income and 50% tax exemption on the next S$100,000 of chargeable income starting from year of assessment 2020.
To discuss your tax rates – Contact us here for a free consultation with a taxation specialist