1) One of the LOWEST TAX RATES in the world
With effect from 2010, Singapore corporate income tax rate has further reduced from 18% to 17%, being one of the lowest tax rates in the world. Singapore Government has declared a new start-up tax exemption for newly incorporated and partial tax exemption for existing companies:
Tax Exemptions for Newly Start-up Companies in Singapore
4.25% tax on first S$100K chargeable income
8.50% tax on chargeable income of above S$100K up to S$200K
Tax Exemptions for Existing Companies in Singapore
2) Engage in TRIANGULAR or TETRAGONAL trade
3) Government Incentives
Overview of government incentives
- 25% of M&A allowance (capped at S$10 million) of the total acquisition value capped at S$40 million per YA.
- Double Tax Deduction (DTD) on the transaction cost capped at S$100,000 incurred during the share acquisition process.
The qualifying expenditures include:
- Qualifying salary expenses incurred for employees posted overseas in an overseas entity
- Overseas business development trips and missions
- Overseas investment study trips and missions
- Overseas trade fairs
- Local trade fairs approved by Enterprise Singapore or STB
Automation Support Package (under Enterprise Singapore)
- Capability Development Grant (CDG)
- Investment Allowance (IA)
- Enhanced SME Equipment Loan
Qualifying projects may be eligible for an IA of 100% on the amount of approved capital expenditure, net of grants. The approved capital expenditure is capped at S$10 million per project.
Under Enterprise Financing Scheme (EFS), qualifying SMEs may receive up to 70% government’s risk-share with participating financial institutions for qualifying projects. SMEs can apply for fixed asset loans of up to S$30 million.
Supportable project costs include expenditure in the following:
- Manpower cost (up to 50% support)
- Equipment, materials, consumables and software (up to 30% support)
- Singapore-based professional services (up to 30% support)
- IPRs, e.g. licensing, royalties, technology acquisition (up to 30% support)
- Ship broking;
- Forward freight agreement (FFA) trading;
- Ship management;
- Ship agency;
- Freight forwarding and logistics services; and
- Corporate services rendered to qualifying approved related parties who are carrying on business of shipping – related activities.
Grant of up to 50% of the total qualifying project costs (inclusive of input GST), comprising of manpower and equipment either engaged or acquired for the purposes of the project, and other operating expenditure incurred for the purposes of the project.
4) TAX EXEMPTION ON DIVIDEND DECLARED FROM SINGAPORE
5) TAX TREATIES
6) AUDIT EXEMPTION of a Singapore Company
2. To consider a company as resident in Singapore, the control and management of the business must be exercised in Singapore. Though the term “control and management” is not clearly defined by authorities, a generally accepted consensus is that it refers to the policy level decision making at the level of Board of Directors and not the day-to-day decision making and operations.
3. Section 127 (1) – Exemptions from tax. Any income specified in Part 1 of Schedule 6 shall be exempt from tax. Part 1 Schedule 6, para 28 (1), Income of any person, other than a resident company carrying on the business of banking, insurance or sea or air transport, for the basis year of assessment derived from sources outside Malaysia and received in Malaysia Part 1 schedule 6, para 28(1), exempt income of any person derive from sources outside Malaysia and received in Malaysia (See also exception).
4. Existing safeguards will however be retained, such as requiring all companies to keep proper accounting records, and empowering shareholders with at least 5% voting rights to require a company to prepare audited accounts.