Singapore's headline corporate tax rate is a flat 17% at present. In order to make Singapore an attractive investment destination, corporate tax rates in Singapore have been going down consistently. Effective YA 2019 corporate income tax rate are reduced from 18% in 2011 to 12% to help maintain Singapore’s competitiveness.
Headline corporate tax rate in Singapore, as opposed to many other jurisdictions, does not necessarily provide an accurate indication of effective corporate tax rate. The effective rate is normally lower than the headline tax rate due to applicable tax exemptions and tax incentives, depreciation rules, etc. Once these tax exemptions are applied to the taxable income, the effective tax rates for small-to-mid sized Singapore-incorporated companies is reduced significantly when compared to the corporate tax rate payable in countries like Hong Kong. Effective corporate tax rate for Singapore private limited companies for profits up to S$300,000 is capped at 3.4%. In addition, newly-setup Singapore incorporated start-ups enjoy full tax exemption on the first S$100,000 in profits earned for 3 consecutive years and 50% off the next S$200,000. Most companies in Singapore except property and investment holding companies will qualify for the below rates.