Tax Incentives for Singapore BusinessesPosted by Cheryl Lee on December 14th, 2021
Singapore Government provides several incentives to promote entrepreneurship in the country. In collaboration with the Inland Revenue Authority of Singapore (IRAS) which is the tax authority of Singapore, it has implemented tax reduction schemes targeted at businesses, especially startups in Singapore. This article provides an overview of these provisions. Tax incentive applications are typically subject to an approval process during which the administering agency evaluates the applicant’s business plans in detail. Successful applicants are required to satisfy rigorous requirements and are expected to make significant economic commitments in Singapore. Below is a list of the various corporate tax incentives that you as a business owner may be eligible for. Manufacturing and Services IndustryYou may be eligible for a corporate tax incentive if you can demonstrate to the government that you have developed an innovative technology or skill set that will revolutionize your sector, and you are the first in Singapore to apply for the solution. You can also receive one if you can show that your business development will benefit Singapore’s economy. The two schemes are the Pioneer Certificate Incentive (PC) and Development Expansion Incentive (DEI). These incentives can be applied via the Singapore Economic Development Board. 1. Pioneer Certificate Incentive (PC)This incentive is available to businesses and companies who can demonstrate that their expertise is significantly more advanced than what is already available in Singapore. The corporate tax incentive is a concessionary tax rate of 5% for up to five years. 2. Development and Expansion Incentive (DEI)If you can demonstrate that your company’s expansion and development would boost Singapore’s economy, you can qualify for the Development and Expansion Incentive. For the next ten years, you will be subject to a 5% tax rate. Banks and InsurersSeveral tax incentive options are available for those within the banking and insurers industry. However, these are provided only for those companies that are significantly boosting the economy of Singapore. 1. Finance and Treasury Centre (FTC) IncentiveThe Finance & Treasury Centre (FTC) incentive is for businesses that provide services in corporate finance advisory, foreign exchange, management of interest rate, etc. The relief offered under this category is a reduced corporate tax rate of 8% on income. You will need to apply for this incentive at the Singapore Economic Development Board. 2. Financial Sector Incentive (FSI) SchemeThe Financial Sector Incentive (FSI) Scheme is available for financial institutions that are licensed, and that performs a mix of corporate and business functions. These are eligible to receive several concessionary tax rates for headquarter services, loans, and fund management. Applications are sent to the Monetary Authority of Singapore. 3. Insurance Business Development (IBD) SchemeThe Insurance Business Development (IBD) Scheme is for insurance companies and businesses that are licensed and that offer services in claims handling, risk consulting, etc. Those who qualify will receive a concessionary tax rate of up to 10%. Applications are also sent to the Monetary Authority of Singapore. Read mroe about Singapore Corporate Tax Incentives by Industry at Singapore Company Incorporation. Like it? Share it! More by this author |
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