Tax Incentives for Singapore Businesses

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Singapore is well-known for offering a variety of tax breaks to encourage various sorts of enterprises to set up shop there.

The Inland Revenue Body of Singapore (IRAS) is Singapore’s major tax authority, in charge of developing various tax programmes and incentives for startups as well as multinational corporations in order to attract greater investment in Singapore.

In general, it is usually a good idea to engage the expert services of a Singapore accounting business to apply for the required tax breaks.

Furthermore, if you own a firm, you should be conversant with some of the key tax methods. In this post, you will learn about some of the important Singapore tax breaks that are beneficial to various sorts of businesses.

Tax Break for Startups

Singapore offers large tax breaks to startups in order to promote aspiring entrepreneurs. The startup tax system exempts startups from paying taxes for the first three years, allowing them to build a solid basis in the country.

Except for corporations whose primary job is to operate as investment holding or build properties for sale and investment, every form of Singapore startup can claim this tax exemption. The three conditions that startups must satisfy are as follows:

  1. The startup must be a Singapore-registered business.
  2. The registered firm must be a Singapore tax resident.
  3. The number of stockholders in the firm cannot exceed 20.

If the startup is eligible for the tax scheme, the first $100,000 is tax-free, and subsequent $100,000 is tax-free.

This substantial tax break assists startups in drastically lowering the cost of operation and establishing a profitable firm.

Double Tax Deduction

Singapore enterprises who seek to extend their company in foreign territories can apply for the double tax deduction programme, which allows them to claim a tax deduction of up to 200% on expenditures incurred via market expansion and development operations.

This significant Singapore tax advantage is available to organizations that promote the exchange of products and services.

A large-scale organization can claim a twofold tax deduction on the qualified costs listed below:

  • Fairs and overseas trade offices
  • Marketing via authorized publications
  • Expenses associated with sending personnel overseas.
  • Running marketing efforts on a global scale.
  • Market research and feasibility studies

Additional activities are eligible for a double tax deduction, as shown below:

  • ESG has authorized a virtual trade expo.
  • ESG has authorized product/service certification.
  • International advertising and marketing initiatives.
  • Packaging design for the international market.
  • Advertising in a local trade journal that has received permission.

Furthermore, from YA 2019 to 31 December 2025, a firm can immediately claim a 200% deduction on the first S$150k.

Keep in mind that if your spending exceeds S$150,000, you may need to get authorisation from the relevant tax authorities.

International Shipping Activities

If you own a company that requires international shipping, there is a good probability that you will be able to discover an appropriate tax break relating to the marine industry.

When a company earns money from transporting passengers, mail, cattle, and other items over international borders, it can seek an exemption under the international shipping operation tax incentives.

Singapore Tax Break for Charitable Contributions

Companies that promote charitable activities qualify for a tax break under the Business and IPC Partnership Scheme. This initiative was first introduced in the 2016 budget.

The proposal was developed by the Singapore government in collaboration with the Singapore Inland Revenue Authority (IRAS).

Under this scheme, Singapore firms may claim a tax deduction of up to 250% on salaries and costs paid to their employees if they send their employees to volunteer and give services to Institutions of Public Character (IPC).

This program’s principal purpose is to encourage generosity across the country.

Conclusion 

Singapore is a very business-friendly country due to its low tax rates. Furthermore, Singapore tax advantages enable all sorts of businesses to thrive in the country and eventually develop to become international corporations.

Singapore stands out from other countries due to its fair and transparent legal system and tax law.

Finding a specific tax scheme appropriate to your business, on the other hand, can be difficult, so you should rely on a competent accounting firm in Singapore to guarantee you are taking use of all available resources and tax benefits for the success of your business.

For more information about singapore taxation service, please visit https://www.accorp.com.sg/

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