Singapore - Tax and Accounting Regulations
A coherent offshore tax planning strategy is essential to maximize the effectiveness of offshore companies. Eltoma can assist by structuring the most tax efficient strategy to satisfy your requirements. Eltoma will guide you as to which jurisdictions offer the best tax structure by identifying the types of tax payable as well as applicable exemptions and incentives. Eltoma will provide tax planning advice that will identify which is the most favourable tax efficient jurisdiction in which to incorporate.
Below is an overview of the tax and accounting regulations for an Offshore Singapore Company
Corporation Tax – Corporate income tax rate in Singapore is 18% for 2009 and 17% for 2010.
Income Tax - Singapore operates a territorial taxation principle therefore income derived in Singapore is subject to tax.
Sales proceeds originating from outside Singapore but received in Singapore are also subject to tax. Prior approval must be obtained by the Singapore Inland Revenue Authority before profit can be classified as non-Singapore Income (i.e. not derived from Singapore) and therefore be exempt from Singapore Income Tax.
Difference of tax treatment for income from different sources - Foreign source income is exempt from income tax if it is not remitted into Singapore. Income is not considered to be derived from Singapore if:
- A contract is concluded and signed outside of Singapore
- Services rendered are outside of Singapore
- Capital is employed outside of Singapore
- If the title of goods is passed outside of Singapore
- Receipt of sales proceeds are outside of Singapore
- Payment of expenses incurred in the provision of services or delivery of goods done outside of Singapore
- Place where goods are stored and maintained is outside of singapore
Corporation Tax – Corporate income tax rate in Singapore is 18% for 2009 and 17% for 2010.
Capital Gain Tax (CGT) – There is no capital gains tax in Singapore.
Stamp Duty - Stamp duty on transactions with securities is 0.2% Stamp duty exemption applies to offshore loan agreements and some other documents.
Interest - Interest received is subject to Income Tax. The tax system of Singapore does not have a separate tax treatment for foreign or Singapore source interest income. Interest paid to non-residents of Singapore is subject to withholding tax of 15% unless it is regulated under a Double Tax Treaty.
Royalties – Royalty income received is subject to income tax. Foreign source royalty income is exempt from income tax unless remitted to Singapore. Royalty paid to non-residents of Singapore is subject to withholding tax of 15% unless it is regulated a Double Tax Treaty.
Dividends – Foreign dividend income is exempt from income tax.
Exemptions - Partial tax exemption is available for new start-up companies (for first three consecutive years). The exemption is calculated as following: 100% on first S$100,000 of chargeable income, 50% on next S$200,000 of chargeable income
International Aspects of Cyprus Taxation –
- Anti-avoidance regulation is in place and the Singapore Tax Code is following OECD recommendations.
- Transfer pricing - There is no specific legislation in Singapore tax code. However, arm’s length test will apply to related party transactions.
- Double Taxation Treaty - Singapore has signed more than 60 Double Tax Agreements (DTA) which can be successfully used for international tax planning.
Annual Reporting Requirements:
- Every company in Singapore has to keep accounts. Accounts of the Singapore Company have to be audited on an annual basis. Some exemptions apply for exempt private companies.