Corporate Tax in Singapore

Singapore uses a single-tier corporate tax system. This means the 17% tax paid by the company on its profits is the final tax. When those profits are distributed to shareholders as dividends, they are tax-exempt.

The 17% Headline Rate vs Effective Rate

While the headline rate is 17%, the effective rate is almost always lower due to partial exemptions.

1. Startup Tax Exemption (SUTE)

To encourage entrepreneurship, newly incorporated qualifying companies receive a massive tax break for their first three consecutive Years of Assessment (YAs).

Qualifying Criteria for SUTE:

• Incorporated in Singapore.
• Tax resident in Singapore for that YA.
• Total share capital held by no more than 20 shareholders.
• All shareholders must be individuals, OR at least one individual shareholder holds at least 10% of the issued shares.
• (Note: Investment holding companies and property development companies do not qualify).

The SUTE Exemption (YA 2020 onwards):

• 75% exemption on the first S$100,000 of normal chargeable income.
• 50% exemption on the next S$100,000.
• Maximum exemption: S$125,000 (on S$200,000 of income).

2. Partial Tax Exemption (PTE)

From the 4th year onwards, or if the company doesn't qualify for SUTE, it automatically falls under the Partial Tax Exemption.

The PTE Exemption:

• 75% exemption on the first S$10,000 of normal chargeable income.
• 50% exemption on the next S$190,000.
• Maximum exemption: S$102,500 (on S$200,000 of income).

Use our Corporate Tax Calculator to run your exact numbers.