Singapore is a popular destination for startups and entrepreneurs, offering a range of benefits and incentives to attract new businesses. One of the most attractive benefits is the corporate tax exemption, which can help new companies save on taxes and grow their business. In this guide, we’ll explore the eligibility, application, and benefits of Singapore corporate tax exemptions for new companies, as well as answer some frequently asked questions.
Eligibility
To be eligible for the corporate tax exemption, a company must meet certain criteria. The company must:
- Be a new company, incorporated in Singapore with a minimum paid-up capital of SGD 1 million
- Have at least 20% of its shares held by a Singaporean citizen or a Singaporean permanent resident
- Have its core income derived from a trade or business carried on in Singapore
li>
If a company meets these criteria, it can apply for the tax exemption, which can result in significant savings on corporate taxes.
Applying for the corporate tax exemption is a straightforward process. The company must submit an application to the Inland Revenue Authority of Singapore (IRAS) and provide the required documents. The application must be made within 6 months of the company’s incorporation date.
The required documents include:
- A copy of the company’s registration certificate
- A copy of the company’s constitution
- A copy of the company’s audited financial statements
- A declaration that the company meets the eligibility criteria
The IRAS will review the application and verify the company’s eligibility. If the application is successful, the company will be granted the tax exemption for a period of 5 years.
Benefits
The corporate tax exemption can provide significant benefits to new companies, including:
- Savings on corporate taxes: The tax exemption can result in significant savings on corporate taxes, allowing companies to reinvest their profits and grow their business
- Increased competitiveness: The tax exemption can help new companies compete more effectively with established businesses, as they will have a lower tax burden
- Incentivizing entrepreneurship: The tax exemption can encourage more entrepreneurs to start new businesses in Singapore, contributing to the country’s economic growth and development
Conclusion
In conclusion, the corporate tax exemption in Singapore is an attractive benefit for new companies. By meeting the eligibility criteria and following the application process, companies can enjoy significant savings on corporate taxes and grow their business. The benefits of the tax exemption include increased competitiveness, savings on taxes, and incentivizing entrepreneurship. If you’re a new company looking to set up in Singapore, this guide has provided you with the information you need to take advantage of this valuable benefit.
FAQs
Q: What is the minimum paid-up capital required to be eligible for the corporate tax exemption?
A: The minimum paid-up capital required is SGD 1 million.
Q: What is the duration of the tax exemption?
A: The tax exemption is granted for a period of 5 years.
Q: Can a company apply for the tax exemption if it does not meet the eligibility criteria?
A: No, a company must meet the eligibility criteria to be eligible for the tax exemption. If a company does not meet the criteria, it cannot apply for the tax exemption.
Q: What documents are required to apply for the tax exemption?
A: The required documents include a copy of the company’s registration certificate, a copy of the company’s constitution, a copy of the company’s audited financial statements, and a declaration that the company meets the eligibility criteria.
Q: Can a company apply for the tax exemption after the 6-month deadline?
A: No, the application must be made within 6 months of the company’s incorporation date. If the application is made after the 6-month deadline, it will not be considered.
