File Income Tax: Important Facts About The Singapore Taxation System


File Income Tax: Characteristics Of Corporate And Personal Income Tax

Singapore is an Asian powerhouse in terms of fiscal and economic realizations. As such, the income tax system is modelled to foster an attractive opportunity to companies and investors. The Singapore income tax system is considered to be one of the most efficient and less burdensome in the world.

Personal income tax rates in Singapore vary according to various factors. For instance, a Singapore resident is taxed differently from a non-resident. Moreover, tax rates are in a progressive structure; they start at 0% and are capped at 20%. The rates depend on the income of the individual. Singaporean residents and holders of an employment pass are required to file their personal income tax.
According to the Singapore corporate tax system, companies are taxed solely on the net income they generated or received in Singapore. The corporate tax rate is flat 17%. There are no withholding tax and capital gains tax. Shareholders’ profit shares are not subjected to dividend income tax.

Limited companies in Singapore enjoy various tax immunities. Starts up companies with a profit of up to S$100,000 are qualified for full tax exemption following the first three years of formation. New companies with a chargeable income of up to S$300,000 are subjected to only 9% corporate tax rate.

File Income Tax: Deadlines And Penalties

The Inland Revenue Authority Singapore (IRAS) is the main governing body responsible for collecting taxes. Apart from personal income tax and corporate tax, Singapore also imposes tax on properties, goods and services, vehicles, and betting, among others. Personal income taxes are based on taxable income made from January 1 to December 31. Deadline of filing is April 15th of the following year. Corporate tax returns, on the other hand, must be filed on or before November 30.

Failure to file income tax may lead to penalties and even legal action. Hence, it is always better to make sure that all computations and requirements are completed and filed on time. Having a tax and accounting service provider is advantageous in keeping up with income tax duties.

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