Under the general tax principles, Singapore levies taxes based on the territorial principle. A Company or an individual is liable to pay tax in Singapore on income that is accrued in or derived from Singapore, received in Singapore from outside of Singapore or deemed to be received in Singapore and vice versa.
Singapore Tax Types and Incentives
Singapore Tax Types
The current main tax types in Singapore are corporate income tax, personal income tax, goods and services tax, property tax, stamp duty, motor vehicle taxes, etc. Besides, there are other taxes such as withholding taxes, customs & excise duties, betting taxes, and labour levies levied by Singapore companies that employ foreign workers. Prior to year 2008, there was also inheritance tax and subsequently removed by the government after 15 February 2008. Above that, there is no capital gain tax in Singapore (capital gains from sale of property, shares and financial instruments), as long as the trading in properties meets the capital criteria.
There are various types of tax incentives available for foreign investors and these are provided in the "Singapore Income Tax Act (ITA)" and "Economic Expansion Incentives Act (EEIA)". The government of Singapore also announces other tax incentives in the annual budget.
The several tax incentives taken by the Singapore government is mainly to attract investment, encourage exports, increase employment opportunities, research and development activities, boost the production of high-tech products that leads to a vibrant economy. Those special industries and services (such as high-tech, high-value-added enterprises), large multinational companies, research and development institutions, regional headquarters, international shipping and export companies are given a certain period of tax reduction and exemption or financial support. These various tax incentives are available for foreign-funded enterprises as well as the local enterprises.
With the purpose of encouraging and guiding enterprises to invest in advanced manufacturing and high-end service industries, and to increase their labour productivity, the Singapore Economic Development Board has launched the Pioneer Certificate Incentive, Development and Expansion Incentive, The Finance and Treasury Centre (FTC), IP development Incentive, and the financial subsidies such as The Research Incentive Scheme and The Training Grant for Companies.
Tax planning is a rigorous business practice. An experienced, professional and efficient team determines the effectiveness of the tax planning.
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