How Much Is Company Tax in Singapore?
Singapore is renowned for its stable, efficient, and business-friendly regulatory system. One of the biggest attractions for entrepreneurs and investors is its competitive corporate tax regime.
If you are asking, “How much is company tax in Singapore?” — the simple answer is: the corporate tax rate in Singapore is 17%, but the effective tax rate is often much lower due to various tax exemptions, incentives, and rebates.
In this article, we’ll explain the Singapore corporate tax rate, available exemptions, and how companies can legally reduce their effective tax burden.
Singapore Corporate Tax Rate: 17%
The standardized corporate income tax rate in Singapore is 17% on chargeable income. This flat rate applies to both resident companies and non-resident companies.
Key features of Singapore’s tax system include:
- Single-tier taxation: Corporate taxes are final, and dividends distributed to shareholders are tax-exempt.
- No double taxation on dividends: Shareholders do not pay additional tax on dividends received.
While 17% is the statutory rate, most businesses end up paying far less because of available tax exemptions and rebates.
Start-Up Tax Exemption (SUTE)
To support entrepreneurship, the Start-Up Tax Exemption Scheme (SUTE) offers generous tax relief for the first 3 years of assessment (YA) for eligible new companies.
From YA 2020 onwards, the exemptions are:
- 75% exemption on the first SGD 100,000 of chargeable income.
- 50% exemption on the next SGD 100,000 of chargeable income.
This means a newly incorporated company can enjoy tax savings of up to SGD 125,000 in the first three years.
Eligibility:
- Must be a Singapore tax resident.
- Registered with ACRA.
- Fewer than 20 shareholders (at least 1 individual holding 10% or more of shares).
❌ Investment holding and property development companies are not eligible.
Partial Tax Exemption (PTE)
For companies that don’t qualify for SUTE, the Partial Tax Exemption Scheme applies. From YA 2020:
- 75% exemption on the first SGD 10,000 of chargeable income.
- 50% exemption on the next SGD 190,000 of chargeable income.
This reduces taxable income by up to SGD 102,500, meaning most SMEs pay significantly below the headline 17% rate.
Corporate Tax Rebates & Effective Rates
The Singapore government also provides corporate tax rebates to further reduce tax burdens. For YA 2025:
- 50% Corporate Income Tax rebate, capped at SGD 40,000.
- Additional SGD 2,000 cash grant for eligible businesses.
Thanks to these reliefs, many companies end up with an effective tax rate of below 10%.
Other Key Tax Advantages in Singapore
- No capital gains tax: Profits from the sale of assets are tax-free.
- No withholding tax on dividends: Dividend payouts are exempt from additional tax.
- Foreign-sourced income exemptions: Branch profits, service income, and foreign dividends are exempt if already taxed at 15% or more overseas.
- Territorial tax system: Only income sourced in Singapore is taxable.
Example: Estimating a Tax Bill
Suppose a new company earns SGD 150,000 chargeable income in its first year. Under SUTE:
- First SGD 100,000 → 75% exempt = SGD 25,000 taxable.
- Next SGD 50,000 → 50% exempt = SGD 25,000 taxable.
Total taxable income = SGD 50,000
Tax payable = SGD 8,500 (17% of 50,000)
👉 Effective tax rate = 5.67%, instead of the full 17%.
Conclusion
The corporate tax rate in Singapore may be set at 17%, but thanks to tax exemptions, rebates, and start-up incentives, many businesses pay an effective rate of well under 10%. This competitive framework is a major reason why Singapore continues to be one of the world’s most attractive destinations for investors and entrepreneurs.
At Fast Accounting, we simplify tax compliance and corporate tax filing in Singapore. Our team of experts ensures your company enjoys all available tax reliefs and exemptions, so you can focus on growing your business.
📞 Contact us today to learn more about our Singapore corporate tax services and start saving on your taxes.
