Tel：+86 400 118 5939Address：Room 2810B, Block A, Tianli Central Plaza, Coastal City, Yuehai Street, Nanshan District, Shenzhen, Guangdong Province
Email：info@hyintern.com
+86 400 118 5939
牌照号：TC004750
Tel：+86 400 118 5939Singapore has always adhered to a pro business policy, which is reflected in its extremely low corporate and personal taxes. As a territorial taxation country, Singapore has a basic tax rate of 17% and is exempt from overseas gains tax. Taxation is based on the principle of territoriality. Singapore, like Hong Kong, only taxes profits originating from within Singapore. Whether it is income generated by companies or individuals in Singapore or sourced from Singapore, or income received in Singapore or deemed as Singapore, it is considered taxable income in Singapore and subject to taxation in Singapore. On the contrary, if the income comes from outside Singapore or is not received or deemed received in Singapore, there is no need to pay taxes in Singapore, which means it is tax-free.
Firstly, let's take a look at the tax-free benefits and conditions for overseas income in Singapore
1. Singapore tax companies can benefit from the Foreign Source Income Exemption Scheme (FSIE) and enjoy tax exemptions on the following specific overseas income:
(1) Dividends from overseas;
(2) Profits of overseas branches;
(3) Service revenue from overseas.
2. Singaporean companies must meet three conditions to obtain tax exemption:
(1) When receiving the income from overseas in Singapore, the highest corporate tax rate (headline tax rate) of the overseas country where the income is generated shall be at least 15%;
(2) This income has already been taxed overseas. The tax rate of foreign income tax may be different from the target tax rate;
(3) The authorities believe that tax exemption will benefit the resident company.
3. Tax exemption application materials:
(1) The nature and amount of income;
(2) The jurisdiction from which the income comes;
(3) Title tax rates in overseas jurisdictions;
(4) I have already paid taxes in the foreign jurisdiction where the income was obtained.
Next, let's focus on how to determine the source of revenue for a Singaporean company?
Due to the complexity and controversy of income sources. There is no universal rule that can be applied in every situation to determine whether the correct location of a source of income is Singapore or overseas.
1. The following points can be used as a guide to determine the source of a certain income:
(1) Identify the operations that generate relevant profits and determine the locations where these operations occur;
(2) Determine the place where the sales contract takes effect (the place where profits are earned from the traded goods), such as negotiating, signing, and executing the contract;
(3) For companies that earn commissions as their business, it is necessary to determine where their agents work. If these activities are conducted in Singapore, the income will be considered as coming from Singapore.
2. For income that has been confirmed to come from foreign sources, the next step is to determine whether the income was collected in Singapore. Income from outside Singapore is considered received in Singapore if:
(1) Remittance, sending or bringing into Singapore in the form of cash, check, interest, electronic transfer, etc;
(2) Used to settle any trade or commercial debts incurred in Singapore;
(3) Used to purchase any liquid assets brought into Singapore (such as equipment or raw materials related to your business).
Foreigners and foreign companies may be concerned about being taxed for using Singapore's banking and fund management facilities. However, overseas income collected in Singapore will only be taxed on individuals or entities residing in Singapore. Therefore, non resident individuals or foreign companies not operating in Singapore can bring their overseas income to Singapore without being subject to taxation.
Scan QR code to follow 【Hongyuan International WeChat】
Email: info@hyintern.com
Hotline: +86 400 118 5939
