Singapore is renowned for its business-friendly tax regime, offering a wide range of tax incentives and exemptions to attract foreign investment and stimulate economic growth. For new companies, Singapore provides a unique opportunity to start their business with minimal tax liabilities. In this article, we will explore the corporate tax exemptions available to new companies in Singapore, highlighting the benefits and eligibility criteria for each exemption.
Start-up Tax Exemptions
One of the most attractive tax exemptions available to new companies in Singapore is the Start-up Tax Exemption. This exemption allows new companies to enjoy a 75% tax exemption on their first $100,000 of normal chargeable income. The exemption is available for three consecutive years from the company’s first year of assessment.
To be eligible for the Start-up Tax Exemption, the company must be a new company, having been incorporated in Singapore for less than five years. The company must also have a minimum share capital of at least SGD 1,000. The exemption is available for companies across all sectors, making it an attractive option for startups and small businesses.
PIC Scheme
The Productivity and Innovation Credit (PIC) Scheme is another significant tax exemption available to new companies in Singapore. The PIC Scheme provides a range of tax deductions and credits to companies that invest in productivity and innovation-enhancing activities.
Under the PIC Scheme, companies can claim up to 400% tax deductions or allowances for expenditure on activities such as automation, training, and research and development. The PIC Scheme is available for a period of five years from the date of introduction.
To be eligible for the PIC Scheme, companies must meet certain criteria, including being a Singapore-based company and having a minimum annual employment income of SGD 300,000. The PIC Scheme is available for companies across all sectors, making it an attractive option for companies looking to enhance their productivity and innovation.
Autonomous Facilities
Autonomous facilities in Singapore, such as research and development facilities, are also eligible for tax exemptions. Autonomous facilities are facilities that are self-sufficient and do not require external funding to operate.
Companies operating in autonomous facilities can enjoy a 100% tax exemption on their qualifying activities, including research and development, testing, and manufacturing. The exemption is available for a period of five years from the date of approval.
To be eligible for the autonomous facilities tax exemption, companies must meet certain criteria, including being a Singapore-based company and having a minimum annual employment income of SGD 300,000. The exemption is available for companies across all sectors, making it an attractive option for companies operating in autonomous facilities.
Conclusion
In conclusion, Singapore’s business-friendly tax regime offers a range of tax exemptions and incentives to attract foreign investment and stimulate economic growth. For new companies, the Start-up Tax Exemption, PIC Scheme, and autonomous facilities tax exemption are just a few of the many tax exemptions available. By understanding these exemptions, new companies can optimize their tax liabilities and achieve significant cost savings.
With its business-friendly tax regime, Singapore is an attractive destination for new companies looking to start their business. Whether you are a startup or an established company, Singapore offers a range of tax exemptions and incentives to help your business thrive.
FAQs
Q: What is the Start-up Tax Exemption?
A: The Start-up Tax Exemption is a tax exemption available to new companies in Singapore, allowing them to enjoy a 75% tax exemption on their first $100,000 of normal chargeable income.
Q: What is the PIC Scheme?
A: The Productivity and Innovation Credit (PIC) Scheme is a tax exemption available to companies that invest in productivity and innovation-enhancing activities. Companies can claim up to 400% tax deductions or allowances for expenditure on activities such as automation, training, and research and development.
Q: What are autonomous facilities?
A: Autonomous facilities are facilities that are self-sufficient and do not require external funding to operate. Examples of autonomous facilities include research and development facilities, testing facilities, and manufacturing facilities.
Q: What are the eligibility criteria for the autonomous facilities tax exemption?
A: To be eligible for the autonomous facilities tax exemption, companies must meet certain criteria, including being a Singapore-based company and having a minimum annual employment income of SGD 300,000.
Q: How do I apply for the tax exemptions available to new companies in Singapore?
A: To apply for the tax exemptions available to new companies in Singapore, companies must file their tax returns with the Inland Revenue Authority of Singapore (IRAS) and provide supporting documentation for the exemption claimed.
Q: Can I claim multiple tax exemptions?
A: Yes, companies can claim multiple tax exemptions as long as they meet the eligibility criteria for each exemption.
