<p>  Economists often point to Singapore as the leading example of a country that continues to reduce corporate tax rates and introduces various tax breaks to attract and retain global investment. There is a single-level territorial system of taxation with a uniform corporate income tax rate in Singapore. Effective tax rates as one of the lowest in the world and a friendly attitude towards business in Singapore are the two most important factors that contribute to economic growth and the inflow of foreign investment into the city-state of Singapore.</p><p><span><em><strong>One-tier system of taxation</strong></em></span></p><p>  Since January 1, 2003, Singapore has adopted a single-level tax system for corporate income tax, which means that there is no double taxation in Singapore for stakeholders. The tax paid by the Singapore company with its taxable income is the final tax, and all dividends paid by the Singapore company to its shareholders are exempt from further taxation.</p><p>  In Singapore there is no capital gains tax. For example, in many other developed countries, the capital gains tax is levied on the income from the sale of fixed assets, the profit from foreign currencies resulting from the manipulation of your own capital. In Singapore, there are no such taxes.</p><p>  Corporate income tax rates in Singapore and general principles of exemption from the need to pay taxes in Singapore for Singapore companies.</p><p> </p><p><span><em><strong>The Highest Corporate Tax Rate</strong></em></span></p><p> The main corporate tax rate in Singapore is a flat tax rate of 17%. To make Singapore attractive for investment, income tax rates in Singapore have gradually declined. We can hope that the main corporate tax rate in Singapore will eventually go down even lower. The trend in the above plate allows us to hope for it. But the main rate of corporate income tax in Singapore (as in many other countries) does not necessarily reflect the actual indication of the corporate income tax applicable for your Singapore company. The current tax rate on corporate profits is usually lower due to various tax exemptions, tax benefits.</p><p> </p><p><strong><span><em>Basic Tax Benefits</em></span></strong></p><p>  Below I will list all the main tax benefits and opportunities to get rid of taxes altogether, which are currently available in Singapore for Singapore resident companies. Once these benefits and exemptions are applied to the taxable income of Singapore resident companies, the effective rate of corporate income tax for small and medium-sized companies in Singapore will be significantly reduced.</p><p>  A corporate income tax of 0% is available for the first 100,000 SGD of taxable corporate profits during each of the first three years for new Singapore companies that meet the following standards:</p><ul><li>Registered in Singapore</li><li>Are tax residents of Singapore</li><li>They have no more than 20 shareholders, of which at least one shareholder (an individual) holds at least 10% of the shares.</li></ul><p>  8.5% tax on taxable income up to 300,000 SGD.</p><p>  All Singapore resident companies are entitled to a partial exemption from tax, which in fact becomes a 8.5% tax on the taxable tax to 300,000 SGD. Taxable corporate income of over 300,000 SGD will be taxed at an ordinary corporate rate of 17%.</p><p> </p><p><span><em><strong>Deadlines for filing income tax reports</strong></em></span></p><p>  Since 2009, the deadline for submission of reports in Singapore is November 30.</p><p>  The Singapore company must file a full package of reports: Form C (tax declaration), audited / unlisted accounts, and tax calculation. Calculation of taxes is the confirmation of the income and expenses of the company according to the accounts from which the taxable income is deduced.</p><p> </p><p><span><em><strong>Basic corporate income tax period</strong></em></span></p><p>  In Singapore, corporate income is estimated based on the previous year. This means that the main period for any evaluation year (YA) actually refers to the end of the fiscal year (FYE) for the year that preceded the year of the valuation (YA). The company's accounting and reports will be prepared at the end of your company's fiscal year on an annual basis.</p><p> </p><p><span><em><strong>Exemption from corporate tax audit</strong></em></span></p><p>  In order to reduce the burden on small businesses in Singapore, private companies with an annual income of less than 5,000,000 SGD, may not conduct an audit. Remember that private Singapore companies should not have corporate shareholders, and shareholders of individuals should be less than twenty.</p><p>  Also, "sleeping companies" that have not had any transactions for an annual period are exempt from audit reports and can file reports without an audit. If the fiscal year is less than one year, the amount of 5,000,000 SGD must be recalculated according to the calendar period. Some service providers call them - Exempt Private Company (EPC).</p><p>  In the Singapore Companies Act, private Singapore companies are defined in Section 4 (1) (Section 4 (1)), as a company in which only individuals can be shareholders and they must be less than 20 people. It is important to understand that all Singapore companies (whether they are exempt from audit or not) must file a C form, a tax calculation and an accounting report (with or without an audit).</p><p> </p><p><span><em><strong>Tax deductible (withheld)</strong></em></span></p><p>  Singapore introduced a law on the withholding tax (on some types of income) to ensure the collection of a tax that must be paid by non-residents of Singapore to income generated in Singapore. Withholding tax does not apply to resident companies or individuals. Under the law, when a certain payment is made in relation to a non-resident company or individual, the payment percentage must be withheld and paid by the tax. The deductible amount is called the withholding tax.</p><p> </p><p><span><em><strong>Tax residency of Singapore companies</strong></em></span></p><p>  The company is considered a resident of Singapore, if the control and management of business are performed from Singapore. Although the term "control and management" is not clearly defined by the Singapore authorities, but in practice the opinion is used that "control and management" refers to the development of a general policy of the company's actions and decision-making at the level of the board of directors rather than the daily everyday adoption of small administrative decisions and operations.</p><p>  Generally speaking, a Singapore company is considered non-resident if the directors control and manage the business, and also hold meetings of the board of directors outside Singapore. And the non-residence of the Singapore company remains in force, even if operations of the lowest level are conducted in Singapore! By the way, the residence of Singaporean companies from year to year can vary, depending on the circumstances. Branches of foreign companies in Singapore are most often considered non-resident companies, as control and management is conducted directly from the foreign parent company - the holding company.</p><p>  Taxation for resident and non-resident companies in Singapore is the same, with the exception of certain benefits that are available only to resident companies in Singapore:</p><p>1. The Singapore resident company has access to a corporate income tax exemption scheme that is available for new companies registered in Singapore</p><p>2. The Singapore resident company is exempt from tax on dividends received from a foreign source, income from foreign affiliates and on income from payment for services rendered abroad Singapore, pursuant to paragraph 13 (8) Income Tax Act.</p><p>3. Singapore resident companies can enjoy the bonuses of international treaties on avoidance of double taxation.</p><p> </p><p><strong><em><span>The double taxation treaties signed by Singapore</span></em></strong></p><p>  The agreement on avoidance of double taxation signed by the two countries is usually an agreement that determines how the earned income will be taxed by the authorities of each country if the company is a resident of one of the countries earning income in both. The main benefit of double tax treaties and their main purpose is to help companies and businesses in their country get rid of double taxation of income.</p><p>  At the moment, Singapore has concluded agreements on avoidance of double taxation with more than 70 countries and this list continues to grow. The list of double tax treaties signed by Singapore reflects Singapore's continued efforts to ease the burden of double taxation for its businessmen and the sincere interest of the state in stimulating international trade and the flow of foreign investment.</p><p>  Since 2008, Singapore has made a huge step forward and provides Singaporean companies with unilateral tax incentives. According to the new policy, all Singapore companies that have earned income in countries that do not have double taxation agreements with Singapore will be allowed to receive a tax credit from their tax from a foreign source received from such countries. I would like to discuss the issue of double taxation agreements signed by Singapore in a separate article, which I will soon write. Under the Singapore treaties on avoidance of double taxation, you can write a whole guide, how reasonably they are compiled. You can get some idea of the tremendous benefits that such contracts give, on the example of Singapore and Kazakhstan.</p><p>  </p><p><span><em><strong>Actual net income as opposed to taxable income in Singapore</strong></em></span></p><p>  According to the tax laws of Singapore - the corporate income tax is supposed to be paid in two cases:</p><p>A) If the income is received in Singapore or is of Singaporean origin;</p><p>B) Received in Singapore from abroad. On this point, there are many exceptions, which completely free from the need to pay tax on corporate profits received from a foreign source. I will dedicate a separate article to the taxation of income received from a foreign source in Singapore.</p><p>  The company's revenues and expenses by themselves do not provide a complete picture for the calculation of taxable income. For example, some of your company's expenses may not be deductible for tax purposes, or some income from the proceeds may not be taxed at all, or may be taxed separately, as non-commercial income.</p><p>  Certain income of Singapore companies can be exempted from tax due to certain points of tax law - the Singapore Income Tax Act.</p><p>  In general, companies in Singapore can deduct expenses from revenues for tax purposes. Expenses must be deducted from the next year, when a legitimate profit appears. However, expenses can be used for tax purposes only if there have been no significant changes in the composition of shareholders.</p>