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Corporate Tax FAQs

I am a startup company, will I get taxed?

No, for the first three years, you can avail full tax exemption on profits up to S$100,000. In addition, the new start-up companies can avail a partial tax exemption of 50% on the next S$200,000 income for the first 3 years.

What is the income tax assessment period?

In Singapore, corporate income gets assessed on a preceding year basis. This means that the assessment period for any Year of Assessment (YA), is the financial year ending (FYE) in the year preceding the YA. For example, in year 2014 you will be filing corporate tax return for your company’s financial year that ended anytime between January 1, 2013 to December 31, 2013. Your company’s accounts are prepared up to the FYE of each year.

Can a Singapore branch of a foreign company avail tax exemptions?

Normally, Singapore branch office is non-tax resident in Singapore and therefore, there is no tax exemption or advantage, which they can avail of as compared to a Singapore resident company. However, Singapore branch of a foreign company is considered resident in Singapore, if the control and management of its business are exercised in Singapore. Such companies are do not have to pay the taxes on foreign-sourced income under the Double Taxation Agreements (DTAs).

What is PIC and CIT scheme?

The PIC scheme started in 2010, it was done to encourage and enhance the innovation and productivity quotient of companies. By participating in the PIC scheme, companies can avail attractive incentives i.e. up to 400% tax deductions and 60% cash payouts on the qualifying expenditure of the company. The intention of introducing this scheme is to promote the SMEs, who are cash-starved, to increase their productivity, and innovate. The corporate income tax (CIT) rebate has been introduced to help companies effectively deal with the increasing costs of business operations. All the Singapore companies can claim 30% CIT rebate subject to a cap of S$30,000 as of 2013.

Are Singapore companies taxed for receiving capital gains?

All types of capital gains in Singapore are tax exempt.

My company did not make any profit in this year. Do I still need to file my company’s tax returns?

Yes, even if your company did not make any profit, you will have to file a tax return. However, in the form, you will have to mention your estimated chargeable income (ECI) as ‘nil’.

What is the taxation regime for royalty income?

When a person gets money for allowing the use of his patents, trademarks, or copyrights, that income is known as royalty income. It does not matter, if a person gets the royalty income derived in Singapore, or earns it from outside Singapore and receives it in Singapore; it is taxable in both ways.
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