Accounting and tax
Healy Consultants assists our Clients’ timely discharge their annual legal, accounting and tax obligations.
- Singapore corporation tax is 17% for tax resident Singapore companies for i) local sourced income or ii) foreign sourced income remitted to Singapore;
- The government does not levy a capital gains tax. Even the GST is charged at a low rate of just 7%;
- Personal income tax in the country follows a progressive system and ranges between 2% and 20%;
Tax exemptions and rebates
- A company incorporated in Singapore but deemed as non-resident by the authorities is legally tax exempt if all income and profits are derived from overseas. Consequently, a properly structured Singapore company can be an excellent entity to legally book global income. If certain criteria is met, it is possible for the foreign income of a Singapore resident company to be legally tax exempt;
- If a company is managed and controlled in Singapore, then it is considered tax resident. However, if it is managed and controlled by directors and members residing outside Singapore, then it is considered as non-tax resident. Therefore, foreign sourced income which is not remitted to Singapore, is completely exempt under the Singapore tax law;
- For a new registered Singapore resident company that have no more than 20 shareholders throughout the basis period for that year where all of the shareholders are individuals holding the shares in their own names, or at least one shareholder is an individual holding at least 10% of the issued ordinary shares of the company, entrepreneurs enjoy tax rebate on the profit in the first three financial years. A 100% tax exemption is possible on the first S$100,000 (US$78,000) and 50% tax exemption on the next S$200,000 (US$157,000). The effective rate for a company with S$300,000 of annual income during this period is 5.7%. Click here to access our corporation tax calculator;
- Singapore tax resident companies benefit from the country’s 76 double taxation treaties which minimize global withholding tax;
- Singapore’s recent budgets (2008-2014) have introduced a number of tax reductions and credits for research & development activity. Singapore’s tax authorities released the latest R&D tax guide in January 2015. Find out more about Singapore tax incentives;
Tax reporting, accounting and auditing considerations
- Singapore tax reporting is easy, all returns can be submitted online. The Singapore tax authority are extremely efficient and organized;
- All Singapore incorporated companies must file their Corporate Tax Return by the filing deadlines: 15 Dec for e-file and 30 Nov for paper file. Thereafter a notice of assessment will be issued to the Singapore company for corporate tax settlement. The Singapore company can pay the tax bill over 12 months, interest-free monthly installments;
- Healy Consultants is happy to assist our Client to discharge their annual accounting and tax obligations, Healy Consultants estimate annual professional fee for such service is US$2,300. Singapore-registered companies;
- In accordance with GST Law, a Singapore Company is obliged to register for GST if annual sales exceeds or is expected to exceed S$1 million in any calendar year. Healy Consultants will be happy to assist you with GST registration for a one time fee of US$550;
- Annual unaudited financial statements are submitted to the Accounting and Corporate Regulatory Authority (ACRA) within 6 months of the end of the accounting year. Our firm is a specialist in accounting and bookkeeping services;
- An annual statutory financial audit is not required if corporate turnover is less than US$4 million and there is no corporate shareholder;
- In accordance to Section 197(1)(b) the Accounting and Corporate Regulatory Authority (ACRA) imposes a penalty of S$300 for late filing of the annual return. The company director(s) are responsible to ensure an Annual General Meeting is timely held and the Annual Return is filed within 1 month of the same. Failure to comply is considered an offense and can lead to prosecution of the director(s).
Singapore company tax exemption package
- If properly structured, a Singapore company can be legally tax exempt if certain criteria are met;
- Press this tab to view a sample draft invoice for our standard Singapore offshore package.
Healy Consultants fees for accounting and tax support
Singapore accounting and tax task US$ Singapore active company unaudited annual tax and accounting 2,300 Singapore dormant company unaudited annual tax and accounting 950 Singapore active company audited annual tax and accounting 5,950 Singapore GST quarterly reporting 550 Singapore annual personal tax return 1,950 Singapore company residence certificate 950 IRAS written confirmation of legal tax exemption 1,500 Average monthly bookkeeping services 550
Monthly bookkeeping serviceHealy Consultants monthly book keeping fee US$550 includes i) receive in dropbox the monthly invoices from our Client ii) label monthly bank statement transactions iii) preparation of monthly income and expenses statement iv) highlight anomalies v) monitor monthly profit levels to minimize annual tax.
Tax exemption for start-ups
- To stimulate entrepreneurship, the Singapore government offers an extremely attractive tax exemption scheme for start-up companies. For the first three years, Singapore startups are exempt from corporate tax on the first S$100,000 and the next S$200,000 is 50% tax exempt;
- This scheme is applicable to tax resident companies that i) have less than 20 shareholders and ii) are not investment holding nor property development companies;
- Year four onwards, partial tax exemption will apply to all tax resident companies as follows: 75% on the first S$10,000 and 50% on the next S$290,000.
It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
Legal and compliance
Singapore company laws
- The Singapore online public register records details of a Singapore company directors and shareholders, including names and addresses and passport numbers. Some of our Clients’ ask Healy Consultants to be the professional passive nominee shareholder or director;
- Every company must lodge an annual return confirming relevant details of the company for the public register including names and addresses of all directors, address of principal place of business and details of shareholders and their shareholdings;
- Singapore has an efficient, transparent legal system. All parties, regardless of their nationality, will be offered the right to due process under the law. Singapore is party to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards; arbitration in other countries that also follow the convention will be enforceable in Singapore;
- The Constitution of the country bars all resident firms from discriminating against employees on the grounds of religion, race, descent and place of birth. All resident companies are barred from releasing private information about individual without his/her consent;
- The Competition Act mandates all resident firms to gain approval from the Government in regards to M&A matters;
- A Singapore company is exempt from the annual statutory independent audit if i) corporate turnover is less than US$4 million and ii) there are no corporate shareholders;
- The process of deregistering a company is dictated by the Government will take a minimum of 6 months. Healy Consultants fee to project manage company de-registration is US$1,450. During this 6 months period it is mandatory to maintain a resident company secretary and a legal registered office. Following legal company de-registration, our Client is i) no longer allowed to conduct business through that entity ii) no longer obliged to submit annual tax returns and iii) no longer to prepare annual financial statements;
- The Memorandum of Association is a contract between the shareholders and comprises i) company activities ii) registered office address iii) shareholder and director details iv) share capital v) profit distribution method;
- A private Singapore company is required to maintain both a local registered address and a local resident company secretary, who must be appointed within 6 months of incorporation.
Singapore employment regulations considerations
- In accordance with Singapore’s Employment Act of 1955, employment contracts must always state: i) the employee and employer’s full name ii) job title, main duties of the employee iii) start date of employment and duration iv) working hours and rest day(s) v) basic salary and overtime rate of pay vi) numbers of public holiday, annual leave, sick leave, maternity leave and childcare leave vii) probation viii) CPF contributions (if any) and ix) notice period for contract termination;
- There is no minimum wage in Singapore. However, salaries in Singapore for skilled employees tend to be high. The median gross salary income (including CPF contributions) reached S$3,800 in 2014, according to the Statistics Bureau of Singapore;
- In accordance with Singapore regulations, employers must also register all Singapore nationals and permanent resident employees no later than 1 week from the commencement of their contracts with the Central Provident Fund (CPF);
- For each citizen or permanent resident employee, employers’ monthly contributions to CPF represents 17% of the employee’s gross salary. The employer must also deduct each month employee’s gross salary contributions of 20% and remit the corresponding amount to the CPF. These rates vary slightly for new permanent residents and employees over 55 years old;
- The standard working time is i) 9 hours per day and ii) 44 hours per week. Overtime work must be compensated by an extra payment of at least 50% of the standard rate of pay. All starting employees are entitled to at least i) 14 days of paid sick leave ii) 11 days of paid national holidays and iii) 7 days of paid annual leave per year. See this page for further details on employee paid leave practices in Singapore. However, most local employers offer 14 days of paid annual leave per year;
- When terminating a contract for other reasons than disciplinary ones, both employer and employee must provide a notice period (or equivalent payment) of at least 1 week for employees who have been with the company less than a year. After the first year, the notice period increases to two weeks for employees with less than 5 years’ tenure, then one month thereafter;
- Wages of employees working in Singapore will be subject personal income tax. Prevailing rates for residents are progressive from 0% to 20%. For non-residents, salary income is taxed at a flat 15% rate and directorship fees are subject to a 22% flat rate.
Click here to calculate your Singapore corporate tax
Fill in the form below and see the total tax your company may have to pay and the effective tax rate: