All Singapore companies are required to file annual income tax returns to the Inland Revenue Authority of Singapore (IRAS) and pay income tax at the prevailing Singapore corporate tax rate charged on chargeable income. A one-off corporate tax rebate may be granted for each Year of Assessment (YA) to reduce the final tax bill amount payable to IRAS.

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Singapore’s corporate income tax rate has been maintained at a flat 17% over the last 10 years. By applying a 17% corporate tax rate to the chargeable income of SGD100,000, the tax payable before tax rebate would amount to SGD17,000 (17% x SGD100,000).

If the tax filing was made in YA2019, a 20% corporate tax rebate is automatically granted, and the final tax bill would come up to SGD13,600 (80% x SGD17,000) as SGD 3,400 (20% x SGD17,000) is deducted from the SGD17,000 tax payable before rebate. For a more detailed explanation of Singapore company tax rates, see our guide to Singapore corporate income tax.

Singapore Corporate Income Tax (CIT) Rebate

Singapore has grown to be a financial haven for Small and Medium-sized Enterprises (SMEs) and a leading economic hub in the Southeast Asian region with its own set of business-friendly tax policies and incentives. Corporate income tax rebates are meant to lessen the burden of companies’ cash flows by reducing the tax payable.

It can be viewed as a stimulus policy by the government to relieve a company’s overall tax liability in order to tide through periods of economic downturn or recession where cash conservation is paramount for continuing operations and investing for future growth.

All Singapore companies are eligible for corporate income tax rebate regardless of profit levels or paid up capital amount. The following table lists the corporate income tax rebate over the last seven years. The corporate tax rebate for YA2020 has not yet been granted but may soon be subject to updates in the upcoming Budget 2020 announcement on 18 February 2020.

Years of Assessment

Corporate Income tax Rebate rate

YA2013

30%, capped at SGD30,000

YA2014

30%, capped at SGD30,000

YA2015

30%, capped at SGD30,000
YA2016

50%, capped at SGD20,000

YA2017

50%, capped at SGD25,000

YA2018

40%, capped at SGD15,000

YA2019

20%, capped at SGD10,000

YA2020

No rebate granted yet

 

Income Tax Rebates claim Tax Filing

In YA2019, companies were granted 20% Corporate Income Tax rebate, which is capped at a maximum of SGD10,000. If a Singapore company’s tax payable for the previous year exceeds SGD50,000, it is thus entitled to the full CIT rebate allowable for the specified YA.

For example: if a Singapore business’ tax payable amounts to SGD60,000 in 2019, then an SGD10,000 tax rebate is automatically deducted and the final tax bill would be SGD50,000.

Companies need not factor in the CIT rebate when filing their ECI for the respective years of assessment as IRAS will compute and apply the rebate automatically. The relevant rebate applied will be reflected in the Notice of Assessment (NOA) issued by the Authority.

Responsible Singapore business owners and companies may still seek the assistance of a tax expert to avoid costly mistakes in the ECI filing process and to maximize tax benefits claimable. Professional tax agents are trained to accurately compute a client’s final tax bill via ECI filing to claim the appropriate tax rebate due from IRAS for every year of assessment.

PWCO is a qualified tax professional services firm with over 30 years of experience in the industry. The firm keeps up to date with latest IRAS legislative changes and is able to ease your corporate tax filing procedures to ensure Singapore companies enjoy the maximum benefits of IRAS tax incentives and remain in full compliance with the local tax legislation.

Esther Mok
Esther Mok Tax Principal , Paul Wan & Co.
Esther Mok is a Fellow member of The Association of International Accountants, UK and an Approved Accredited Tax Advisor specializing in both Income Tax and GST with Singapore Institute of Accredited Tax Professionals (SIATP). She has behind her more than 20 years of tax experience dealing with international and local clients.
em@pwco.com.sg
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Esther Mok
Esther Mok Tax Principal , Paul Wan & Co.
Esther Mok is a Fellow member of The Association of International Accountants, UK and an Approved Accredited Tax Advisor specializing in both Income Tax and GST with Singapore Institute of Accredited Tax Professionals (SIATP). She has behind her more than 20 years of tax experience dealing with international and local clients.
em@pwco.com.sg
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