Singapore is the third largest trade and financial center in Asia and has a good business environment. Expanding Singapore's economic market can provide many development opportunities for enterprises.

At the same time, the Singapore government is very pro-business, and has introduced many preferential tax policies with high layout efficiency, thus attracting global investors to register Singapore companies in Singapore and expand the business map.

So, what are the characteristics of Singapore's taxation?

Characteristics of Singapore's tax revenue

1, single tax system

The United States, China and other countries have many taxes and adopt the principle of global taxation. Singapore, on the other hand, has few taxes and low tax rate, and adopts the principle of territorial taxation, and it is a single tax system. For example, after a Singapore company pays income tax, the dividends received by its shareholders are tax-free in Singapore.

2. Low tax rate

The corporate income tax rate in Singapore is 0- 17% (25% in China), while the personal income tax rate in Singapore is 22% (45% in China), and there are a series of tax incentives.

3. tax exemption

In Singapore, capital gains, dividends or income obtained from overseas are tax-free, and assets obtained by inheritance or gift are tax-free.

4. Exemption from double taxation

Singapore has signed agreements with more than 70 countries to avoid double taxation, and companies and individuals who benefit from foreign income and assets only need to pay taxes once.

What are the main taxes in Singapore?

1, corporate income tax in Singapore

Singapore adopts the principle of territorial taxation, that is, only income from or obtained in Singapore is taxed. Income of individuals or companies in other countries is tax-free in Singapore. Corporate income tax rate: 17%.

According to the company's establishment time and tax year, companies incorporated in Singapore can enjoy substantial income tax exemption, such as the first profit of S $6,543,800+,full income tax exemption, the last profit of S $200,000, 75% income tax reduction and so on.

In Singapore, the following corporate taxes are not levied: capital gains, dividends or income obtained from overseas are tax-free in Singapore.

2. Personal income tax in Singapore

Singapore's personal income tax adopts a progressive tax rate system. Except for tax exemption and many relief items, the personal income tax rate remains between 0-22%.

Exemption from personal income tax: capital gains made by individuals, income from overseas and dividends of Singapore companies are tax-free in Singapore.

Including a number of tax relief items: taxpayers have the right to enjoy more than ten personal income tax relief such as child support, elderly support, home care for the disabled, vocational training fees, insurance premiums, and provident fund contributions.

Citizens SC who live in Singapore, permanent residents PR (except for temporary departure) and foreigners who have lived/worked in Singapore for 183 days in a tax year (except for the income of company directors) are tax residents in Singapore.

3. Goods and Services Tax

In other countries, GST is usually called value-added tax (VAT), which is an indirect tax levied on goods or services purchased by consumers in Singapore. Singapore's current goods and services tax rate is 7%, which only taxes domestic consumption, and products and services sold to foreign consumers are exempt from goods and services tax.

4. Tariffs

Singapore is a duty-free port. Singapore does not impose tariffs on export products, but imposes import tariffs on a few commodities such as petroleum products, automobiles, tobacco products and alcohol. These taxes are levied according to the tax rate of specific imported goods, that is, ad valorem, that is, in proportion to the price of taxable goods.

5.stamp duty

Stamp duty applies to documents that transfer company shares and real estate. Singapore's stamp duty is also low, for example, the stamp duty on the transfer of company shares is two thousandths.

Property tax is paid by the owner according to real estate assessment. It is calculated as a percentage of the annual value of all houses, land, buildings and houses. The law distinguishes the taxes on residential land, property occupied by owners, commercial real estate and leased real estate.

6. Other miscellaneous taxes

There are a few other miscellaneous taxes in Singapore, such as foreign labor tax and airport passenger service fee. But in most cases, individuals or companies engaged in daily business in Singapore will not face any additional hidden taxes.

How do I judge whether I need to pay taxes in Singapore?

If offshore account's income is not generated locally in Singapore (that is, there is no contract with a Singapore company), and the income is not transferred to Singapore in any form, there is no need to pay taxes in Singapore.

This is determined by the principle of territorial taxation in Singapore, and only the income generated locally in Singapore or remitted to Singapore is taxed. Need to pay special attention to the tax situation:

1. The income generated overseas is used to repay Singapore's debts;

2. It is used for the company to purchase equipment or raw materials and bring the purchased assets into Singapore.

All the above are equivalent to the income remitted to Singapore, which is subject to normal taxes.

Paying taxes is not the same as filing taxes. First of all, you need to know that paying taxes and filing taxes are not the same concept. Offshore companies in Singapore may not have to pay taxes, but tax returns are necessary. From the compliance point of view, as long as 1 of the following items is met, it is necessary to make accounting and tax returns:

1, with business records left in the bank account;

2. Customs and logistics companies left import and export records;

3. Purchase and sale relationship with Singapore businessmen;

4. The employee has been employed in Singapore;

5. Allow or authorize the use of patents, trademark designs and other materials in Singapore;

6. Allow or authorize the use of real estate in Singapore, and collect rents, rental fees and other payments;

7. Entrusted sales in Singapore;

8. Other profits from or arising from Singapore.

In terms of tax declaration and payment, there is often confusion among enterprises, and they mistakenly think that since they don't have to pay taxes, they don't have to declare because they don't have to pay taxes.

J.J. reminded everyone not to have such a misconception, or they will face an investigation by the Singapore Taxation Bureau and even a huge fine. Therefore, the compliant business model of Singapore companies is to file tax returns on time.

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