Key Features of Singapore Corporate Taxation 2017

1. DOING BUSINESS IN SINGAPORE
SEMINAR SERIES:
- CORPORATE TAXATION
PRESENTED BY:
- WENNY SHI, CA(SG)
Overview of Corporate
Tax
Key Features & Tax
Exemptions/Tax Rebates
Others (individual tax, property
tax, tax evasion/avoidance)
AGENDA:

2. Introduction to Singapore Tax Authority
The Inland Revenue Authority of Singapore (IRAS) is a
statutory board under the Ministry of Finance (MOF) and act
as an agent of the Government in providing services to
administer, assess, collect and enforce payment of taxes.
The Comptroller of Income Tax who head the IRAS is
responsible to oversee the administration and management of
IRAS.
Fundamental principle of Singapore tax policy
• To keep Singapore tax rates competitive.
• Competitive corporate tax rate will…
• Competitive individual tax rates will…

3. Different types of taxes in SG:
1. Income Tax: - Personal Income Tax, Corporate Income Tax
2. Property Tax
3. Goods & Services Tax (GST)
4. Betting Taxes
5. Casino Tax
6. Stamp Duty
7. Motor Vehicle Tax
8. Custom & Excise Duties
Singapore Basis of Taxation:
• Territorial Basis of Taxation
• Under Section 10(1) of Singapore Income Tax Act, tax is
levied on
- Income accruing in or derived from Singapore
- Income received in Singapore from outside Singapore
(foreign-sourced income)

4. Overview of Corporate Income Tax (CIT):
 All companies in Singapore need to report income to IRAS annually by
filing Income Tax Returns (Form C)
 Current Corporate Income Tax Rate: 17%
 A company is taxed on the income earned in the preceding financial
year. This means that income earned in the financial year 2016 (known
as the “basis period”) will be taxed in 2017.
 In tax terms, the Year of Assessment (YA) is the year in which your income
is assessed to tax
 The basis period is generally a 12-month period preceding the YA:
Financial Year End Basis Period YA
31 Dec of each year 1 Jan 2016 - 31 Dec 2016 2017
31 Mar of each year 1 Apr 2015 - 31 Mar 2016 2017
30 June of each year 1 Jul 2015 - 30 Jun 2016 2017
Key Features:
Corporate tax rate: 17%
- Territorial and remittance basis of taxation
Tax exemption for foreign dividends, branch
profits and service income
- Provided certain conditions are met
No capital gain tax
- Subject to “badges of trade” test
Carry back of unabsorbed tax losses and
capital allowances

5. Carry forward of unabsorbed tax losses and
capital allowances
Group relief system
No thin capitalisation rule
……
Key Features:
DISCUSS SOME OF THE DIFFERENCES IN KEY
FEATURES OF SINGAPORE VS INDONESIA
CORPORATE TAX
DISCUSSION

6. Corporate Income Tax (CIT) Calculation:
 A Company is taxed at a flat rate of 17% on its
chargeable income
 Tax payable is subject to tax adjustments which include
non-taxable income and disallowable expenses.
 Example of non-taxable income: capital gain
 Example of disallowable expenses: depreciation,
private car expenses
 Currently there are 2 Tax Exemption Schemes:
1. Tax Exemption Scheme for New Start-Up Companies
2. Partial Tax Exemption
TAX EXEMPTION SCHEME FOR NEW START-UP COMPANIES

7. Test of Tax Resident for Companies
• A company is tax resident in Singapore if the control
and management of its business is exercised in
Singapore [section 2 ITA]
• General rule – the place where the company will be
deemed resident is the place where its directors
manage and control its business and where they hold
their board meetings.
PARTIAL EXEMPTION FOR COMPANIES
Where the New Start-Up Exemption is not granted,
partial exemption is applicable
Companies with normal chargeable income (CI)
Exemption is capped at $300,000 of CI

8. Corporate Tax Rebates:
Rebate on Tax Payable
YA 2016: 50% rebate on tax payable, cap: $20K
YA 2017: 50% rebate on tax payable, cap:$25K
YA 2018: 20% rebate on tax payable, cap: $10K
CIT Calculation - Illustration:
YA2017 $'000
Total income 500
Total expenses (200)
Net accounting profit 300
Deduct: Non-taxable income (50)
Add back: Disallowable expenses 150
Chargeable income 400
Less: New Start-up tax exemption
-100% of $100k
-50% of $200k (200)
Net Chargeable Income 200
Tax payable (17% CIT) 34
Less: CIT rebate (at 50%) (17)
Net tax payable 17
(effective tax rate = 5.7%)

9. QUIZ 1. TAX COMPUTATION
Corporate Income Tax (CIT) Computation
Question: Compute Net Tax Payable for YA 2017 & YA2018
YA2017 YA2018
$'000 $'000
Total income 700 700
Total expenses (150) (150)
Net accounting profit 550
Deduct: Non-taxable income (50) (50)
Add back: Disallowable expenses 100 100
Chargeable income 600
Less: New Start-up tax exemption
-100% of $100k
-50% of $200k (200) (200)
Net Chargeable Income
Tax payable
Less: CIT rebate
Net tax payable
Tax
Consideration
Permanent
Establishment
Risk
Corporate &
Withholding
Tax
Indirect Tax
(GST/VAT)
Personal
Tax
Customs
duties and
Free Trade
Agreements
Tax
treaties
Local
incentives
Transfer
Pricing
CROSS-BORDER TAX CONSIDERATIONS

10. BENEFITS
AVOID
DOUBLE-
TAX
LOW TAX
NO
Currency
Controls
100%
Foreign-
ownership
allowed
Ease of
Incorporation
Government
Support &
Incentives
Good
Infrastructure
No
Corruption
Good
Branding
STABLE
& SAFE
Good
Healthcare
ADVANTAGES OF DOING BUSINESS & LIVING IN SINGAPORE:
BONUS TOPIC

11. THANK YOU
Contact us:
Wenny Shi
Founder & CEO
wenny@winaccountingservices.com
WA: +65 97662656
www.winaccountingservices.com
Corporate establishment, tax advisory & planning,
intellectual property, accounting & finance, marketing,
human-resource, work-visa, business strategy.