Tax Matters

Tax Matters

Singapore Tax law has become more and more complex. Which means the filing of tax can be confusing and daunting.  You may overlook tax credits, allowable allowances even you are using a well-programmed system it cannot replace an experienced tax professional to interpret the complex tax provision.

Aven & Bill provides a comprehensive range of taxation services. Our clientage ranges from large to small-medium enterprise who need advice on taxation for a sole proprietor, partnerships and corporate tax, double taxation treaties and international tax arrangements to high net worth individuals looking for personal tax advice.

For more information on Tax Services, simply call us at 65-6235 3309 our respective staff in charge will get in touch with you at the earliest convenience.

Corporate tax

Singapore is on a single tier flat tax rate; the headline tax rate is currently at 17% applicable to Singapore tax residents’ corporations; which is one of the lowest tax rates across the world.

Single-tier system which means single tier exempt dividend that would be exempt in the hands of corporate shareholders.

Besides the low tax rate, there are many tax exemptions and incentives for Singapore tax resident corporations. As such, it further reduces the headline tax rate of 17% significantly.

The general rule is that a company is taxed on the income earned in the preceding financial year.

An overview of Exemptions/Incentives:

  • For newly incorporated entities, the tax rate for the first $100,000 the tax exemption rate is at 75%, next $100,000 @50% total amount exempted from tax is at $125,000 (where any of the first 3 Year o
  • Partial tax exemption for companies from YA 2020 Companies can enjoy the partial tax exemption and tax exemption for new start-up companies; chargeable income for the first $10,000 tax exemption @75%,

Internationalisation Double Tax Deduction Scheme

The scheme is to encourage internationalisation where business can claim double tax deduction with a specific cap on qualifying expenses up to the specific expenditure cap, without STB or Enterprise Singapore

  • Overseas business development trips/missions
  • Overseas investment study trips/missions;
  • Oversea trade fairs; and
  • Local trade fairs approved by Enterprise Singapore or STB

Withholding Tax

Under Singapore law, anybody makes payment(s) of a specific nature such as Technical Service Fee, Interest, Commission, Royalty, and Rent of Movable properties, fees in connection with loan or indebtedness, Distribution of real estate investment (REIT), etc. to non-resident companies.
The rate of withholding tax depends on the nature of the payment.

Overview of types of Withholding Tax Rates:

  • Interest, commission, fee or other payment in connection with any loan or indebtedness tax rate: 15%
  • Royalty or other lump sum payments for the use of moveable properties tax rate: 10%
  • Payment for the use of or the right to use scientific, technical, industrial or commercial knowledge or information, tax rate: 10%
  • Technical assistance and service fees, tax rate: Prevailing corporate tax rate.
  • Payment to Non-Resident Professional/Foreign Firms (unincorporated) tax rate: 15% on gross income
  • Non-resident director tax rate: 22% (20% for income due and payable prior to 1 Jan 2016) Director’s remuneration
  • Payment to Non-Resident Public entertainer tax rate: 10% on gross income (till31 Mar 2020)

Goods & Services Tax

Goods & Services Tax (GST) is a broad-based consumption tax. It is a tax levied on the importation of goods as well as nearly all supplies of goods and services in Singapore.

Most of the financial services, importation and local supply of investment precious metals and the sales and lease of residential properties are exempted from GST.

Goods that are exported and international services are zero-rated.

Businesses are required to register for GST when the taxable turnover exceeds $1 million.

However, you may choose to voluntarily register for GST if your business does not exceed $1 million.
Output Tax: The GST that is charged and collected is an output tax and must be paid to IRAS
Input Tax: The GST incur on business purchases; importation of goods and expenses is known as input tax. If it satisfies the claiming condition, input tax can be claimed.

Individual Income Tax

An individual who earned income in or derived from Singapore is chargeable to income tax.

Overseas income received in Singapore on or after 1 January 2004 is not taxable, except:

Income earns come from different sources, such as:

  • Income from Employment: Salary, Bonus, Director’s fee, Commission, Allowances, Gains from the exercise of stock options, Income received overseas, Pension, Retrenchment and Retirement benefits
  • Trade, business, profession or vocation: Income received as a self-employed person (commission agents, freelancers, taxi drivers, hawkers, etc.), Income received through a Partnership, Income received
  • Property or investments: Dividends, Gains from Sale of Property, Shares & Financial Instruments, Interest, Rent from property
  • Other sources for example; annuities, royalties, winnings, estate or trust income withdrawal from Supplementary Retirement Scheme (SRS)