Singapore: Quick Guide To Singapore Corporate And Individual Tax 2016

Last Updated: 1 July 2016
Article by Sivakumar Saravan and Adrian Kong

Liability to Tax

Singapore adopts a territorial basis of taxation in that income accrued in or derived from Singapore, or sourced outside Singapore but received or deemed received in Singapore, is taxable in Singapore subject to certain exceptions. This applies to both resident and non-resident persons. Receipts that are capital in nature are not taxable.

All foreign sourced income received by individuals are exempted from tax.

A Singapore resident company can enjoy tax exemption on its foreign-sourced dividends, foreign branch profits and foreign-sourced service income remitted or deemed remitted to Singapore if certain conditions are met.

Tax Residency

Companies

A company is regarded as resident in Singapore for tax purposes if its management and control are exercised in Singapore. What constitutes management and control is a question of degree and fact. As a general rule, the place where the directors of a company manage and control its business and hold their board meetings is the place where the company is deemed resident.

Individuals

An individual is regarded as a tax resident if, in the year preceding the year of assessment, the individual resides in Singapore, except for temporary absences from Singapore considered reasonable and not inconsistent with a claim by such a person to be resident in Singapore. In addition, a person who is physically present or who exercises employment (other than as a director of a company) in Singapore for 183 days or more during the year preceding the year of assessment is regarded as a Singapore tax resident.

Under an administrative concession, if an individual stays or work in Singapore for a continuous period of at least 183 days straddling over two years, the individual will be regarded as a tax resident for both the years. This concession applies to foreign employees and is not applicable to directors of a company, public entertainers or independent professionals.

Tax Year

In Singapore, income tax is charged on a preceding year basis. This means that the income from any source for any year of assessment is measured by the income from that source in the preceding year.

Year of assessment

The year of assessment is the year in which income tax is calculated and charged. Each year of assessment or statutory tax year begins on 1 January and ends on 31 December.

Basis period

The basis period for a year assessment is the period of income relevant to the year of assessment. The basis period for any year of assessment is the calendar year proceeding that year of assessment.

Example

The basis period for the year of assessment 2016 is the period from 1 January 2015 to 31 December 2015 and it is the income of this period that is charged to tax in the year 2016.

Companies are allowed to adopt a different financial year other than a calendar year. A different basis period applies to businesses whose accounts are made up to a date other than 31 December. This means that the basis period for such businesses for any year of assessment is the financial or accounting period ended in the preceding year.

Example

The basis period for the year of assessment 2016 for a company with a June year end is from 1 July 2014 to 30 June 2015. In this case, the income in the period 1 July 2014 to 30 June 2015 is subject to tax in the year of assessment 2016.

Tax Rates

Companies

The corporate tax rate is 17% for the year of assessment 2016. In addition, 75% of up to the first S$10,000, and 50% of up to the next S$290,000 of a company's chargeable income is exempt from corporate tax. Remaining chargeable income is taxed at 17%.

For a newly incorporated company, the first S$100,000 and 50% of up to the next S$200,000 of its normal chargeable income is eligible for tax exemption for each of its first three consecutive years of assessment. To qualify for this exemption, a company must meet the following conditions:

  • it is incorporated in Singapore
  • it is a tax resident of Singapore for the year of assessment of claim
  • it has no more than 20 shareholders throughout the basis period for that year of assessment, and
  • there is at least one shareholder who is an individual beneficially and directly holding at least 10% of the issued ordinary shares of the company.

The above exemption for newly incorporated companies will not apply to the following companies incorporated after 25 February 2013:

  • A company whose principal activity is that of investment holding; and
  • A company whose principal activity is that of developing properties for sale, for investment, or for both investment and sale .

For years of assessment 2016 to 2017, companies will receive a 50% Corporate Income Tax (CIT) rebate, capped at S$20,000 per year of assessment. The CIT rebate is given to all companies regardless of tax residency status and eligibility for concessionary corporate tax rate, except for non-resident companies whose income are subject to final withholding tax.

Individuals

Individuals are taxed at progressive tax rates. For the year of assessment 2017, individual tax rates start at 0% and is capped at 22% (for income above S$320,000) for residents as follows:

With effect from year of assessment 2018, the total amount of personal reliefs that a tax resident individual can claim will be capped at $80,000 per year of assessment.

Generally, non-resident individuals are taxed at a flat rate of 22%. However, employment income is taxed at 15% or the resident rate, whichever is higher. With certain exceptions, short-term employment income from an employment exercised in Singapore for 60 days or less can be exempt from tax.

Returns and Assessments

Companies

Estimated Chargeable Income (ECI)

All companies have to submit their ECI within three months from the end of their financial year end. ECI is an estimate of a company's chargeable income for a year of assessment. Companies with financial year ending Oct 2012 or after, will not need to file ECI for a particular financial year if:

  • the company's annual revenue is not more than $1 million for the financial year; and
  • the ECI is NIL.

Tax return

The income tax return, Form C, must be filed by 30 November of the year of assessment. For small companies with an annual turnover not exceeding S$1 million dollars, a simplified income tax return, Form C-S, can be filed, subject to meeting other conditions. If the Form C-S is e-filed, the deadline will be 15 December of the year of assessment.

Starting from year of assessment 2018, mandatory e-filing of CIT returns will be implemented in stages. By year of assessment 2020, e-filing of tax returns will be mandatory for all companies.

Payment

A notice of assessment (NOA) based on estimated chargeable income furnished by the taxpayer is raised by the Comptroller of Income Tax. The tax payable under the assessment must be paid within one month from the date of the NOA issued. When the tax assessment is revised subsequently based on tax computations and returns filed, an amended or additional NOA is issued by the Comptroller of Income Tax.

Where the taxpayer disagrees with the assessment, an objection must be raised within 2 months from the date of service of the NOA. In spite of any objection lodged against tax assessments, any additional tax payable must be paid within one month from the date of the NOA.

Individuals

Tax return

The income tax return, Form B1, must be filed by 15 April (for paper return) or 18 April (for e-filing) of the year of assessment.

Payment

Most taxpayers should receive a Notice of Assessment (NOA) for the Year of Assessment between end April and September. Income tax is payable within one month from the date of the NOA. Taxpayers who pay their income tax by GIRO can however enjoy up to 12 monthly interest-free installments.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.