The Different Taxes A Company Has To Pay In Singapore

In Singapore, the taxes a company is liable to pay can be generally be broken down into 5 types.

Here’s a general overview of the 5 types of taxes you should be aware of when setting up a company in Singapore.

1. Corporate Income Tax

Corporate income tax is the income tax payable on the profits earned by a company. Corporate income tax rate in Singapore is fixed at a flat rate of 17%. However, there are many tax incentives and partial exemptions available to qualifying companies.

2. Goods And Services Tax (GST)

A company that has a revenue in of S$1 million or above for the preceding year must apply to be GST registered. As a GST registered company, it is then compulsory to charge output tax on the goods and services supplied.

GST is 7% standard rated. For exports and prescribed international services, these are 0% rated.

The purchases, the company may be able to claim on the GST paid to suppliers.

While the GST is fixed at 7% currently, it has been announced by the government that there is plan to revise the GST to 9% in the future.

3. Stamp Duty

Stamp duty is due when there is a transfer of unlisted shares or real property to a company. For purchase of unlisted shares, the stamp duty payable is 0.2% of the consideration or valuation whichever is higher.

For the purchase of real property, the stamp duty payable is:

  • 1% on the first $180,000
  • 2% on the next $180,000
  • 3% on the balance thereafter

For the purchase of residential property valued more than $1 million, 4% is levied on the amount in excess of $1 million.

Do note that companies buying residential properties are also required to pay an additional buyer stamp duty (ABSD) of 25% on the value of the property. There is also seller stamp duty payable for residential properties if the company sells within a stipulated time frame.

4. Property Tax

For the duration of owning the property, the company is obliged to pay yearly property tax. For non-residential properties, the property tax is a flat rate of 10% levied on the annual value of the property. For residential properties owned, it is a progress rate of 10% to 20% levied on the annual value.

5. Personal Income Tax

Personal income tax is levied on the income of individuals. A company only has to take note of this if it is bearing the tax on behalf of it’s employees.

Personal income tax for a tax resident in Singapore ranges from 2% to 22% with the first S$20,000 exempted.

 

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