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Tax Incentives for Companies in Singapore

Tax incentives are exclusions from funds owed in taxes to the states. It is offered for businesses and corporations to encourage them in engaging economic activities that are beneficial for the community. Given the participation, programs would reduce poverty and improve the labor market. Tax exemption Singapore lowers the debt ratio in general.

Qualifications for Common Tax Relief

Tax exemptions and incentives are effective for start-up companies following the condition:

  1. Registered company in Singapore
  2. Must be a tax resident
  3. Number of shareholders with a maximum of 20 individuals in the assessment year

Industry-based Exemptions

The Singapore government ensures the progression of the State through inflicting competitive and efficient companies. Participating businesses and organizations for community growth would obtain tax exemptions in return. Here are the common tax reliefs in varying industries.

Service Companies

Enterprises that manufacture and release leading technological advancements may receive full tax exemption for years, depending on the significance and nature of the product. This goes the same for engineering and qualifying services. International programs with expertise in global relations while exceeding standard requirements would rate as low as 0%.

Shipping Logistics and Maritime Operations

Tax incentives are granted based on income derivation in terms of shipping and maritime operations. The exemption aims to bridge international relations while increasing the level of transshipment in Singapore. On the other hand, the Approved Shipping and Logistics Scheme (ASL) may receive the maximum 10% concessionary taxes.

Finance Management

The concessionary tax rate in finance services varies on the standard of the Financial Sector Incentive (FSI), including schemes and treatment. The Standard Tier receives the highest percentage (12%) followed by the Headquarter services (10%). More points are considered in terms of headcount and coverage of programs established.

Trading Industry

Companies in charge of international trading would tax incentives up to  10% concessionary. This applies to traders with an efficient shipment, above standard record, and well-established marketing activities.

Investment Sector

Tax incentives are usually deduction of incurred losses on liquidation. Opening company Singapore that participate in innovative and efficient programs may be approved once observed with substantial content. Moreover, the state qualifies tax exemptions on specific devices and pieces of machinery offered overseas.

Small Business Tax Incentives 

There are also tax credits and standard incentives available for small businesses, self-employed individuals, and minor start-up companies. The relief you could receive may add up to the previous credits. Considering small businesses are directly affected by the economic downturn, the Singapore government listed grants to help owners. Here are the following in accordance with Deskera.

  • Special Situation Fund for Start-Ups (SSFS)
  • Enterprise Development Grant (EDG)
  • Enterprise Financing Scheme – SME Working Capital Loan
  • Temporary Bridging Loan Program
  • Enhanced Rental Waiver
  • Providing Booster Packages
  • Job Support Scheme
  • Property Tax Rebate for Businesses

Meanwhile, according to the Inland Revenue Authority of Singapore (IRAS), the Task Force on the Digital Economy has considered the tax conflict concerning the emergence of the digital economy. The organization has been working on achieving a consensus-based solution. Moreover, some jurisdictions addressed these challenges by implementing measures and further taxes overseas.

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