Singapore Tax Incentives for Businesses 2023 Guide
Singapore is one of the most business-friendly nations in the world because it offers a wide range of tax incentives and schemes. The extensive range of Singapore tax incentives encompasses all major types of businesses and organizations, making it an integral economic hub in Asia.
The investor community is also active in Singapore due to its transparent tax and legal system. The government and its relevant authorities introduce new tax incentives from time to time to promote business activity.
In this article, we’ll discuss the major Singapore incentives and how different sectors can benefit from them. Keep reading to learn all about them.
Corporate Income Tax Rate
Singapore has a flat corporate income tax rate of 17% of the chargeable income. This flat tax is applicable to both local and foreign companies operating in Singapore.
Nevertheless, there are also some significant corporate income tax incentives to reduce operating costs and support business restructuring.
The corporate income tax rebates are also applicable to the income generated through non-resident companies, Registered Business Trusts, and companies that are not subject to a final withholding tax.
Singapore offers a significant number of incentives to the aviation industry, especially since the COVID-19 pandemic.
In 2022, the Ministry of Transport introduced the One Aviation Resilience Package to support aviation companies by providing them with up to S$500 million. This scheme is applicable for the 2022 and 2023 financial years.
Startup Tax Exemption
As stated before, Singapore is considered one of the best places to do business. This is the reason why Singapore tax incentives include a variety of schemes for startups and growing businesses.
The Startup Tax Exemption (SUTE) tax exemption scheme is one such incentive that was introduced way back in 2005 to support new businesses and encourage entrepreneurs in Singapore.
Since 2020, SUTE has been offering a 75% tax exemption to qualifying companies for the first S$100,000 of chargeable income made during the first three consecutive years of the startup.
Even after the 3-year period, companies have the option of applying for the partial tax exemption scheme (PTE) to enjoy tax incentives while the business is growing.
An audit firm in Singapore can help businesses and entrepreneurs to qualify for such tax incentives and support their businesses.
Generally, to qualify for startup tax exemption, you must be a tax resident of Singapore or have less than 20 shareholders. Moreover, the company must not belong to the property development industry and not act as an investment holding company.
Enterprise Financing Scheme
Singapore has a large variety of loans, tax incentives, and rebates under the Enterprise Financing Scheme. It has a trade loan option in which your company can get a maximum loan of up to S$10 million at a low-interest rate.
Moreover, a project loan incentive is also available to facilitate Singaporean countries in getting financing throughout their business growth stages.
These loans are typically meant for domestic projects and construction companies. A domestic project can win a maximum loan of up to S$30 million, while an international project can get a loan of up to S$50 million.
Tax schemes meant to facilitate investment in domestic and overseas assets are also available so that companies can buy any required equipment and machines they need for business growth.
The amount allocated towards such a loan is up to S$30 million, with a repayment period of 15 years.
SME Working Capital Loan Scheme
As the name suggests, the SME Working Capital Loan Scheme is meant to facilitate SMEs by easing their expenditure costs. The exact value of such loans can greatly vary as per the nature and scale of the company. Generally, you can apply for a loan of up to S$300,000 under this scheme.
Another significant feature of this loan scheme is that it has a repayment period of five years. Hence, SMEs can get this loan to expand their working procedures and come up with a suitable repayment plan with the help of an audit firm in Singapore.
In a Nutshell
Overall, this huge variety of Singapore tax incentives and schemes prove why Singapore is one of the favourite spots of the business community.
Tax incentives are available for all types of businesses. Startups, growing businesses, SMEs, and enterprises can all get some kind of incentive from the government and tax authorities.
To ensure that you obtain the benefits of all relevant tax incentives, it is advisable to rely on professional audit firms in Singapore. This way, experts will be able to assist you in qualifying for the appropriate scheme and obtaining maximum tax relief.