It is the Government’s policy to keep our tax regime competitive to make Singapore an attractive business hub to encourage new investments and spur entrepreneurship. In Singapore, there is only one rate of tax imposed on companies. This is currently set at 17%. 

As new companies are the lifeblood of a more entrepreneurial economy, the Government seeks to provide start-ups with every opportunity to thrive and succeed in a low-tax environment.  In this regard, a start-up tax exemption scheme was introduced in 2004 to provide newly incorporated companies generous exemption on their taxable profits. 

The Government recognises that small and medium-sized businesses are an important component of a vibrant economy. To help such companies further grow and establish themselves in Singapore, the Government has put in place a partial tax exemption scheme, which would lower the taxable profits of these companies. While the partial tax exemption scheme would benefit the small and medium-sized companies more, it is a scheme that is available to all companies.

The Government appreciates that that as companies grow, they tend to organise themselves into multiple holding companies, subsidiaries and associate companies to accommodate different business units and to limit liabilities. To facilitate risk taking and entrepreneurial activities for such companies, the Government introduced the loss transfer system of group relief. Under the loss transfer system, losses of related companies could be transferred to related companies within the group. This will reduce the overall tax burden for the whole group.

Singapore has a territorial system which taxes income received on a remittance basis.  Double taxation is eliminated either through the provision of a foreign tax credit for taxes suffered by the taxpayer abroad on the remitted income, or under the foreign-sourced income exemption regime since 1st June 2003. 

The corporate income tax regime with its low corporate tax rate and various features underline the Government’s commitment towards making Singapore a place where enterprises may thrive.