Singapore’s Corporate Tax Benefits Every Company in Singapore Should Know


Singapore’s lower tax rates and incentives have always been big draws to different entrepreneurs around the globe, to set up their offices in Singapore and avail the corporate tax benefits on offer. There is a flat corporate tax rate of 17% on incomes above $300,000. Below that income level, the rate can be as low as 8.5%.

Singapore offers a single-tier corporate tax system. Companies are taxed once on their profits and not on their dividends. This is not the case in many countries. Different countries have different tax system for instance: in United States of America dividend is taxed at a rate from ten percent to thirty five percent depending on income level; while in the United Kingdom dividend tax rate reaches from zero person to 36.1 percent. Similarly, in Australia dividends are taxable at individual income tax rates and the Chinese dividend tax rate is at twenty percent. These run in stark contrast to Singapore’s tax exempted dividends.

Estate duty – An estate duty can be defined as a tax levied on the fair market value of an individual’s assets, (including both cash and non-cash items) at the time of his or her demise. Singapore is one of the many countries that have abolished estate duties. However, there are some countries still using vested duty regimes, for examples:

• In the United States inheritance tax starts from zero percent and reaches as high as thirty five percent. The first ten thousand dollars is free from tax, the next ten thousand suffers from an eighteen percent tax. This increases up to thirty five percent on income levels above five hundred thousand dollars;
• in the United Kingdom, an inheritance is free from tax for the first three hundred and twenty-five thousand pounds while the remaining value is taxable at forty percent;
• in Japan, inheritance tax varies, from ten to fifty percent;
• Australia, like Singapore, has also abolished inheritance taxes.

Capital gain is a profit that results in a disposal of assets in Singapore, which too is not taxable in Singapore. Here is a comparison on capital gain tax with other countries:

• in the U.S, the range for gain tax is from zero percent to thirty five percent;
• in United Kingdom tax rate is fixed at eighteen percent;
• In Australia, capital gains are treated as taxable income and taxed at individual tax rates starting from zero percent and up to forty-five percent;
• in Japan, capital gains are taxable as normal income.

In Singapore, corporate bodies are free from capital gain tax, dividend tax and estate duty tax. Singapore has only two types of taxes, which are income tax and goods and services tax (GST)- both of which are competitive with high-tech system. Many companies have been set up in Singapore to take the advantage of this. There are many available brands offered by the government making the Singapore an attractive place for business.

To know more about the tax incentive for corporate bodies, contact firms offering accounting services in Singapore for a closer look at this system.

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