Tax Exemption Scheme for New Incorporated Companies (First 3 YAs)
From the year of assessment (YA) 2010, the corporate income tax rate in Singapore is at 17% for both domestic and foreign businesses.
From YA 2005, the Tax Exemption Scheme for new Incorporated Company aims to promote entrepreneurship and support business to develop. Refer to the tax information from IRAS
Now, businesses get many other support sources to develop, from YA 2020, it will be changes in the above policy.
With the changes, qualifying companies will be given the following tax exemption for the first three consecutive YAs where the YA falls in:
YA 2020 onwards
- 75% exemption on the first $100,000 of normal chargeable income; and
- A further 50% exemption on the next $100,000 of normal chargeable income.
Example: suppose your company has the amount of Profit is SGD 230,000, tax payable is calculated as follow:
|
SINGAPORE ($) |
TOTAL ($) |
TRADE |
230,000 |
230,000 |
TOTAL INCOME/LOSS |
230,000 |
230,000 |
CI BEFORE DEDUCTING EXEMPT AMOUNT |
230,000 |
|
LESS: EXEMPT AMOUNT |
|
|
First 100,000 (75%) |
75,000 |
|
Next 100,000 (50%) |
50,000 |
125,000 |
CI AFTER DEDUCTING EXEMPT AMOUNT |
|
105,000 |
Tax on 105,000 (17%) |
|
17,850 |
TAX ASSESSED |
17,850 |
|
LESS: Tax Rebate YA2020 (20%) (Note: Tax rebate will be changed base on YA) |
|
3,570 |
TAX PAYABLE |
|
14,280 |
LESS: Previous Assessment |
|
|
TAX DISCHAGRED AS PER THIS ASSESSMENT |
14,280 |
YA 2010 to YA 2019
- Full exemption on the first $100,000 of normal chargeable income; and
- A further 50% exemption on the next $200,000 of normal chargeable income.
Example: suppose your company has the amount of Profit is SGD 230,000, tax payable is calculated as follow:
|
SINGAPORE ($) |
TOTAL ($) |
TRADE |
230,000 |
230,000 |
TOTAL INCOME/LOSS |
230,000 |
230,000 |
CI BEFORE DEDUCTING EXEMPT AMOUNT |
230,000 |
|
LESS: EXEMPT AMOUNT |
|
|
First 100,000 (100%) |
100,000 |
|
Next 130,000 (50%) |
65,000 |
165,000 |
CI AFTER DEDUCTING EXEMPT AMOUNT |
|
65,000 |
Tax on 105,000 (17%) |
|
11,050 |
TAX ASSESSED |
11,050 |
|
LESS: Tax Rebate YA 2019 (20%) (Note: Tax rebate will be changed base on YA) |
|
2,210 |
TAX PAYABLE |
|
8,840 |
LESS: Previous Assessment |
|
|
TAX DISCHAGRED AS PER THIS ASSESSMENT |
8,840 |
Tax Exemption Scheme for the Companies (From 4 YA)
Except for enterprises that have enjoyed tax exemption scheme for newly New Incorporated Companies, all enterprises can enjoy Tax Exemption Scheme for enterprises as follows:
YA 2020 onwards
- 75% exemption on the first $10,000 of normal chargeable income; and
- A further 50% exemption on the next $190,000 of normal chargeable income.
Example: suppose your company has the amount of Profit is SGD 230,000, tax payable is calculated as follow:
|
SINGAPORE ($) |
TOTAL ($) |
TRADE |
230,000 |
230,000 |
TOTAL INCOME/LOSS |
230,000 |
230,000 |
CI BEFORE DEDUCTING EXEMPT AMOUNT |
230,000 |
|
LESS: EXEMPT AMOUNT |
|
|
First 10,000 (75%) |
7,500 |
|
Next 190,000 (50%) |
95,000 |
102,500 |
CI AFTER DEDUCTING EXEMPT AMOUNT |
|
127,500 |
Tax on 105,000 (17%) |
|
21,675 |
TAX ASSESSED |
21,675 |
|
LESS: Tax Rebate YA2020 (20%) (Note: Tax rebate will be changed base on YA) |
|
4,335 |
TAX PAYABLE |
|
17,340 |
LESS: Previous Assessment |
|
|
TAX DISCHAGRED AS PER THIS ASSESSMENT |
17,340 |
YA 2019 and before
- 75% exemption on the first $10,000 of normal chargeable income; and
- A further 50% exemption on the next $290,000 of normal chargeable income.
Example: suppose your company has the amount of Profit is SGD 230,000, tax payable is calculated as follow:
|
SINGAPORE ($) |
TOTAL ($) |
TRADE |
230,000 |
230,000 |
TOTAL INCOME/LOSS |
230,000 |
230,000 |
CI BEFORE DEDUCTING EXEMPT AMOUNT |
230,000 |
|
LESS: EXEMPT AMOUNT |
|
|
First 10,000 (75%) |
7,500 |
|
Next 220,000 (50%) |
110,000 |
117,500 |
CI AFTER DEDUCTING EXEMPT AMOUNT |
|
112,500 |
Tax on 105,000 (17%) |
|
19,125 |
TAX ASSESSED |
19,125 |
|
LESS: Tax Rebate YA2020 (20%) (Note: Tax rebate will be changed base on YA) |
|
3,825 |
TAX PAYABLE |
|
15,300 |
LESS: Previous Assessment |
|
|
TAX DISCHAGRED AS PER THIS ASSESSMENT |
15,300 |