Unlocking Singapore’s Tax Advantages for Your Business
Singapore offers incredible advantages for those keen to launch a business thanks to a favourable commercial environment and strategic location. Its position in the heart of Southeast Asia makes it a gateway to an emerging region of more than 600 million people. Meanwhile, its strong focus on education and training has produced a highly skilled local workforce, making it an attractive destination for businesses seeking top-notch talent.
But to make the most of these advantages, you need to understand Singapore's tax incentives.
Here are five tax incentives that draw investors and entrepreneurs each year:
Avoidance of Double Taxation: Singapore has signed comprehensive double taxation agreements with over 90 countries, whereby a resident of another country can avoid double taxation when earning income in Singapore. This incentivises internationalisation, as companies overseas expanding to Singapore can avoid being taxed in two jurisdictions.
Corporate Income Tax (CIT) Rates: Companies in Singapore are taxed at a flat rate of 17% of their chargeable income. However, new start-up companies are eligible for the tax exemption scheme, granting them tax relief on the first S$100,000 of normal chargeable income for each of their first three consecutive years.
Foreign-Sourced Income Exemption (FSIE): Singapore-based companies that generate income outside of Singapore can enjoy tax exemption on this income if it is subject to tax in the country where it is generated. This means foreign investors will not be double-taxed on their foreign-sourced income.
Research and Development (R&D) Tax Incentives: To encourage entrepreneurs to build innovative capabilities in Singapore, companies can claim tax deductions on in-house and outsourced research, development, and innovation activities. According to Singapore’s Budget Statement for the fiscal year 2023, tax deductions for qualifying R&D expenses will increase from 250% to 400% in 2024, boosting competitiveness among SMEs and reducing operating costs.
Global Trader Programme (GTP): The GTP is an incentive program that promotes Singapore as an international trading hub. The GTP provides a reduced corporate tax rate of 5% or 10% on qualifying trading income for three or five years.
Accela Finance: Your Partner in Navigating the Tax Landscape
Launching your business in Singapore might seem overwhelming at first glance, especially when it comes to knowing what tax exemptions you can benefit from. From the start, Accela Finance helps newly established businesses capitalise on applicable incentives. Once you’re set up and running, our experienced professionals can provide accounting and bookkeeping services, or advise you on Singapore's corporate income tax and exemptions.
Reach out to us at hello@accela.asia to learn how we can support you.
