(1) Tax Exemption Scheme for New Start-Up Companies

Under the scheme, qualifying new companies are 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.

YA 2010 to 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.

For more details on the tax exemption scheme for new start-up companies and the qualifying conditions, please refer to Common Tax Reliefs That Help Reduce The Tax Bills.

(2) Partial Tax Exemption for all companies

All companies including companies limited by guarantee can enjoy the following tax exemption:

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.

YA 2010 to 2019

  • 75% tax exemption on the first $10,000 of normal chargeable income; and
  • A further 50% exemption on the next $290,000 of normal chargeable income.

For more details on the partial tax exemption scheme, please refer to Common Tax Reliefs That Help Reduce The Tax Bills.

(3) Corporate Income Tax Rebate

Corporate income tax rebate is given to all companies to ease business costs and support restructuring by companies and is applicable for YA 2013 to YA 2020.

All companies will receive a corporate income tax rebate of the following:

  • New! 25% corporate income tax rebate, capped at $15,000 for YA 2020;
  • 20% corporate income tax rebate, capped at $10,000 for YA 2019;
  • 40% corporate income tax rebate, capped at $15,000 for YA 2018;
  • 50% corporate income tax rebate, capped at $25,000 for YA 2017;
  • 50% corporate income tax rebate, capped at $20,000 for YA 2016; and
  • 30% corporate income tax rebate, capped at $30,000 per YA for YA 2013 to YA 2015.

Corporate income tax rebate is computed on the tax payable after deducting tax set-offs (e.g. foreign tax credit).

For more details on corporate income tax rebate and how the corporate income tax rebate is computed, please refer to Corporate Tax Rates, Corporate Income Tax Rebates and Tax Exemption Schemes.

TAX FORMS THAT COMPANIES MUST SUBMIT EVERY YEAR

All companies need to submit two corporate income tax returns to IRAS every year:

  1. Estimated Chargeable Income (ECI) within three months from the company’s financial year end except for (a) companies that fulfil the conditions under the Administrative Concession; and (b) certain entities that are not required to file ECI; and
  2. Corporate Income Tax Returns commonly known as Form C-S or Form C by 15 Dec 2020 for YA 2020, and 30 Nov from YA 2021 onwards except dormant companies for which IRAS has waived the requirement to file.

IRAS provides a wealth of useful resources, some of which we have reproduced or hyperlinked here for your ease of reference and convenience.

To watch the full video on Corporate Tax Filing Obligations and Basis of Assessment (12m 42s), please click here.

HOW CAN SETTING UP A CORPORATE ENTITY HELP?

You may wish to manage your property portfolio through the use of a corporate vehicle in order to reduce your overall tax obligations.

*This does not constitute legal advice. Please consult your own independent legal advice.

Alternatively, read more about your personal tax matters here.

Income Tax – Ultimate Guide to Ace it