Singapore taxes companies on income accrued in or derived from Singapore, and on foreign income received here. Tax is assessed on the preceding financial year, so income earned in financial year 2025 is assessed in Year of Assessment (“YA”) 2026.
The headline rate is a flat 17% on chargeable income, unchanged since YA 2010. Most companies pay materially less, because of the exemptions and rebates below.
Tax Exemption Scheme for New Start-Up Companies (SUTE)
Introduced in YA 2005, SUTE exempts part of a new company’s first $200,000 of normal chargeable income for each of its first three consecutive YAs:
- 75% of the first $100,000
- 50% of the next $100,000
To qualify, a company must be incorporated in Singapore, be a Singapore tax resident for that YA, and have its total share capital beneficially held directly by no more than 20 shareholders throughout the basis period, where either all shareholders are individuals, or at least one individual holds at least 10% of the issued ordinary shares.
Two types of company are excluded outright:
- a company whose principal activity is investment holding; and
- a company that undertakes property development for sale, for investment, or for both.
These percentages changed at YA 2020. Before then the scheme gave 100% on the first $100,000 and 50% on the next $200,000. If you are reading an older computation or an older guide, expect the larger figures.
Partial Tax Exemption (PTE)
Every company that does not qualify for SUTE gets partial exemption on its first $200,000 of normal chargeable income:
- 75% of the first $10,000
- 50% of the next $190,000
A company moves from SUTE to PTE after its third YA. Nothing needs to be claimed; IRAS applies whichever exemption applies.
Corporate Income Tax (CIT) Rebate
The rebate is set separately in each Budget, so it is a year-by-year figure rather than a standing feature of the system.
| Year of Assessment | CIT Rebate | Cap / maximum benefit |
|---|---|---|
| YA 2026 | 50% | $40,000 |
| YA 2025 | 50% | $40,000 |
| YA 2024 | 50% | $40,000 |
| YA 2021 to YA 2023 | None | n/a |
| YA 2020 | 25% | $15,000 |
| YA 2019 | 20% | $10,000 |
| YA 2018 | 40% | $15,000 |
| YA 2017 | 50% | $25,000 |
| YA 2016 | 50% | $20,000 |
| YA 2013 to YA 2015 | 30% | $30,000 |
For YA 2024 onwards the $40,000 is a cap on combined benefits: the CIT Rebate plus the CIT Rebate Cash Grant below.
CIT Rebate Cash Grant
From YA 2024, a company meeting the local employee condition receives a minimum benefit of $2,000 as a cash grant, paid automatically rather than claimed. The condition is met if the company made CPF contributions for at least one local employee, being a Singapore citizen or permanent resident, in the preceding calendar year. Shareholders who are also directors of the company do not count.
The grant is offset against the rebate rather than added to it: where the rebate exceeds $2,000, the company receives the rebate, capped at $40,000, less the $2,000 already paid.
The Budget revises this every year, and it is the figure in this guide most likely to change. IRAS’s Corporate Income Tax Rate, Rebates and Tax Exemption Schemes page is the authority for the rebate applying to your YA. The table above is a summary for orientation.
Double Tax Deduction for Internationalisation (DTDi)
DTDi allows a 200% deduction on qualifying costs of expanding overseas, so an eligible business deducts twice its qualifying expenditure.
Automatic DTDi needs no prior approval from Enterprise Singapore or the Singapore Tourism Board. Its expenditure cap per YA has moved over time:
| Period | Automatic DTDi cap per YA |
|---|---|
| From YA 2027 (announced Budget 2026) | $400,000 |
| YA 2019 to YA 2026 | $150,000 |
| 1 Apr 2012 to YA 2018 | $100,000 |
The scheme covers qualifying expenditure incurred to 31 December 2030.
No prior approval is needed for overseas business development trips and missions, overseas investment study trips and missions, overseas trade fairs, and local trade fairs approved by Enterprise Singapore or the Singapore Tourism Board. Expenditure above the automatic cap, or on activities outside those categories, needs Enterprise Singapore’s approval.
Relief on Foreign Income
Foreign income is taxable in Singapore when received here, which can mean the same income is taxed twice. Two forms of relief exist.
Foreign Tax Credit (FTC)
A company can credit foreign tax paid against the Singapore tax on the same income:
- Double taxation relief (DTR), where Singapore has a tax treaty with the source country; or
- Unilateral tax credit (UTC), where it does not.
The FTC pooling system lets a company elect to pool foreign taxes paid across qualifying income streams rather than compute credits income by income, which usually reduces the Singapore tax payable and simplifies the computation.
Foreign-Sourced Income Exemption (FSIE)
A Singapore tax resident company can receive specified foreign income free of Singapore tax: foreign-sourced dividends, foreign branch profits, and foreign-sourced service income. Three conditions apply:
- the headline tax rate of the source jurisdiction is at least 15%;
- the income has been subject to tax in that jurisdiction; and
- the Comptroller is satisfied the exemption benefits the company.
Section 10L changed the position for disposal gains. With effect from 1 January 2024, foreign-sourced gains from disposing of foreign assets can be taxed as income when received in Singapore, where the entity lacks adequate economic substance here. See Tax Treatment on Foreign-sourced Income.
Tax Residency
A company is a Singapore tax resident when its business is controlled and managed in Singapore. Place of incorporation does not decide it, and residency is assessed year by year.
Residency matters because three benefits depend on it:
- treaty benefits under Singapore’s tax treaties;
- FSIE; and
- the start-up tax exemption.
See Singapore Tax Residency Status for how control and management is assessed.
Withholding Tax on Payments to Non-Residents
Where a company pays a non-resident certain kinds of income, it must withhold tax and remit it to IRAS. Interest, commissions and fees connected with a loan, and royalties are the common cases. Rates depend on the nature of the payment, and a tax treaty may reduce them.
See Payments That Are Subject to Withholding Tax for the mechanics and deadlines.
This is a general guide. Exemption thresholds, rebate caps and scheme parameters are revised in most Budgets, so confirm the figures for your YA against IRAS before relying on them, and seek advice on your company’s specific circumstances.