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An Overview of Some Common Taxes Applicable on Businesses in Singapore

Over the years, Singapore has been recognized as a business hub for global businessmen, investors, and entrepreneurs, who have creative business ideas too. Apart from that, the country diverts the attention of small to midsize enterprises (SMEs) due to varied corporate benefits such as lower tax rates, economic stability, political support, infrastructure, etc. Among all such profits, most of the SMEs do like to prefer lower tax rate in Singapore, which is a treat for them to earn more revenue for their small organizations and grow their ventures at international level too.

The foreigners doing business in Singapore, they also need to be aware of various types of taxes applicable to them to pay on time. However, the collection of Singapore taxes consist of different types of taxes such as Singapore corporate tax, personal tax, income tax, service tax, property tax, etc. So, every foreigner businessman needs to have proper knowledge of taxes applied to his business as per the Inland Revenue Authority of Singapore (IRAS) norms in Singapore.

Let’s take a brief about different kinds of taxes applied to businesses and on personal income of individuals in Singapore such as:

Personal Income Tax Rates in Singapore

The Singapore personal income tax rate depends upon the progressive tax structure of an individual’s personal income. Here, one needs to identify that his or her personal income lies under which taxable slot? For foreigners, the Singapore income tax will follow the progressive resident tax rate to be paid that starts from 0% to 22%. Besides, the individual will not get a profit of any capital gain or inheritance tax in Singapore. Besides, it is necessary to file for personal income tax by an individual resident in Singapore, if his or her annual income is S$22,000 or more. If your resident personal income is less than the same amount, you will be relaxed to pay personal tax to the IRAS authority.

Corporate Tax Rates in Singapore

Since 2010, the Singapore corporate tax rate has been fixed by the government up to 17%.  No matter what you are a local businessman or a foreigner in Singapore, you are eligible to pay the fixed 17% corporate tax in the country only. But, still, there are eligibility criteria that need to follow by the corporate businesses in Singapore to pay their business taxes such as:

  • Your company should not have more than 20 individual shareholders.
  • For corporate shareholders, the individual should be the owner of 10% of the offered shared capital.
  • The corporate tax is not applicable for property and investment holding companies in Singapore.

 Goods and Service Tax (GST) Rates in Singapore

 This is one of the major profits that fascinates the global companies to do business in Singapore, as the goods and service tax rates in Singapore is set up to 7% for all level businesses. The GST charges are applied to the businesses, which are engaged in goods and services activities in Singapore. No matter what, you have a local business or a foreigner company in Singapore you still have to pay 7% GST tax for the same without fail. For paying GST tax of business, you also need to make its registration by ACRA authority of Singapore government. Also, you need to file do right calculate of exact GST tax amount of business and file for the same timely. For more details about GST tax filing and paying, you can consult with charted accountants or approach to the leading accounting service agencies in Singapore too.

Property Tax Rates in Singapore

No matter what type and size of property you have in Singapore, you have to pay property tax too that depends upon the actual Annual Value (AV) of the property with property tax rates that apply to you. One can easily calculate the property tax in Singapore. For instance, if your property’s Annual Value is $30,000 and your tax rate is 10%, you need to pay property tax $30,000 x 10%==$3,000. However, this is the method to calculate your property tax rate annually and pay for it time too.

Thus, above are some commonly known business and personal taxes that every foreigner or local businessman has to pay to the government authorities in Singapore on time to get rid of any legal hassles in the business.