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Taxation in Singapore

The Singapore tax system: how to understand

2020-01-08
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Singapore is one of the most attractive jurisdictions for foreign investors and businessmen in Asia. The tax system of this country is one-stage, highly transparent and allows to carry over the received losses to any future tax period. Such an approach of the government allows entrepreneurs to make a profit absolutely legally and with minimum expenses. Taxes in Singapore in 2020 are divided into 7 large groups and each requires some attention.

Types of taxes in Singapore

  • Income tax. It is paid not only by individuals, but also by legal entities. The rate directly depends on the amount of income and ranges from 0% to 20%.
  • Profit tax. Profit is the income of companies received on the territory of Singapore. The base rate is 17%.
  • Withholding tax on income. It varies in the range of 10%-15% of the amount of income paid by the company outside the jurisdiction.
  • Stamp duty. It is charged on profits received from real estate, shares or securities transactions. No fixed rate is provided.
  • Domestic consumption tax. Is the analog of the Russian VAT, paid on turnover, the amount of which exceeds 1 000 000 local dollars. The rate is 7%.
  • Property tax. The rate is floating, from 0% to 20% and depends on the type of real estate and the purpose for which it is used.

Other taxes and duties (on real estate, vehicles, lottery, casino, customs, excise duties, airport fees, etc.).
There is no capital gains tax in Singapore, and for companies recently registered in Singapore, there are additional benefits in the form of exemption from first income tax. 

Tax system in Singapore in 2020

The main tax authority of the jurisdiction is IRAS, which has existed for over half a century. It successfully oversees all matters related to the payment of taxes and duties in the country and monitors innovations in world politics and economics, trying to maintain the attractiveness of Singapore for investors and foreign entrepreneurs.

IRAS provides companies registered in Singapore with documents confirming their tax residency and monitoring compliance with applicable laws. However, it does not work directly with company representatives and is advised by the Inland Revenue Authority of Singapore.

When cooperating with the tax authorities of Singapore, entrepreneurs may need the help of experts in the field. IT-OFFSHORE specialists will kindly provide extended advice on taxation issues or take on the troubles associated with paperwork, the formation and timely submission of reports.

Final financial and tax reports of companies registered in Singapore are submitted to the IRAS annually not later than November 30. The deadlines for submission of declarations for certain types of taxes are set individually. The report can be submitted to the IRAS by post, fax or online on a special portal myTaxPortal.

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