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Tel：+86 400 118 5939Singapore levies taxes based on the principle of territoriality, and any income generated or derived from Singapore by any person (including companies and individuals), or income obtained or deemed to have been obtained in Singapore, is considered taxable income in Singapore and is subject to taxation in Singapore. That is to say, even if the income occurs or comes from outside Singapore, as long as it is obtained in Singapore, it needs to be taxed in Singapore. In addition, income earned overseas in Singapore is also subject to income tax, except for tax exemptions (such as dividends, branch profits, service income, etc.).
Singapore implements a unified corporate income tax policy for domestic and foreign enterprises. Singapore does not tax capital gains, and companies within the same group can merge for taxation. Loss recovery can be carried forward indefinitely or for one year. Singapore categorizes taxpayers into resident and non resident companies based on whether their control and management functions are located in Singapore. Resident company refers to a company whose control and management functions are located in Singapore. That is to say, as long as the control and management functions of the company are located in Singapore, regardless of whether the company is registered in Singapore according to Singaporean laws, it is considered a Singapore resident company. On the contrary, if the control and management functions of a company are not located in Singapore, even a company registered in Singapore under Singaporean law is considered a non resident company for taxation purposes.
Firstly, let's take a look at which companies in Singapore are required to pay taxes?
According to Singapore tax laws, the taxpayers of corporate income tax include enterprises registered in Singapore under Singaporean law, foreign companies registered in Singapore (such as branches of foreign companies in Singapore), and foreign companies not established in Singapore but having taxable income from Singapore based on their original territory (excluding partnerships and sole proprietorships).
1. Local companies in Singapore;
2. Foreign companies registered in Singapore;
3. And foreign companies that are not established in Singapore but have taxable income from Singapore (excluding partnerships and sole proprietorships);
What is the calculation of Singapore's corporate tax rate change?
At present, Singapore's corporate income tax rate is 17%, and new companies that meet the requirements are exempt from taxes for the first three years. The tax rate gradient is as follows:
|
Taxable income of enterprises |
tax rate |
|
Less than 10000 Singapore dollars |
4.25% |
|
SGD 100000-200000 |
8.50% |
|
Less than SGD 300000 |
17% |
1. 8.5% of corporate profits below SGD 300000 (inclusive);
2. 17% of corporate profits above SGD 300000;
3. The company's capital gains tax rate is 0%;
4. Shareholder dividend distribution 0%;
5. 0% of income from foreign sources but not brought into Singapore;
6. 0-17% of income from foreign sources and brought into Singapore (depending on the situation);
7. If the annual income is not more than 100000 RMB, there is no need to pay personal income tax (individual).
In addition, Singapore has reached double taxation agreements with over 80 countries worldwide, including Japan, China, Malaysia, Indonesia, and the United Kingdom. The double taxation agreement signed between Singapore and other countries aims to alleviate double taxation on income earned by residents of other countries in one country. Double taxation agreements stipulate the taxation rights between Singapore and treaty countries on certain cross-border income, and may also provide for tax reductions or exemptions. The main advantages of double taxation agreements include avoiding double taxation, reducing withholding tax, and offering preferential tax systems. These advantages help minimize the tax burden on Singaporean companies.
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