Understanding tax and accounting in Singapore

Since 1 January 2003, Singapore has adopted a single-tier corporate income tax system. Under this system, the tax paid by your company on chargeable income is considered the final tax, and dividends distributed to shareholders are exempt from further taxation. 

To maintain the status of an attractive business hub and stay competitive, Singapore’s corporate tax rate has remained at 17%.  

Depending on the tax exemptions your business is eligible for, your effective tax rate may be lower than the headline rate. You may also be able to benefit from the various industry-specific tax incentives and concessionary tax rates available. 

Additionally, there is no tax on capital gains in Singapore unless such gains arose from the sale or disposal of foreign assets from 1 January 2024 onwards and subject to further conditions. This is a new law under Section 10L and is effective from 1 January 2024. Examples of capitals gains that are not taxable include gains on the sale of fixed assets and gains on foreign exchange on capital transactions.

In Singapore, corporate income is assessed on a preceding year basis. This means that the basis period for any year of assessment (YA) refers to the financial year ending (FYE) in the year preceding the YA.

For example, in 2025, you will be filing a corporate tax return for your company’s financial year that ended anytime between 1 January 2024 to 31 December 2024. Your company’s accounts should be prepared up to the FYE each year.

The due date for corporate tax filing for Singapore companies is 30 November. You must file a complete set of returns that includes Form C/Form C-S, audited or unaudited accounts and tax computation with the Inland Revenue Authority of Singapore (IRAS).

The IRAS will then review your submission. In most cases, the filed return is accepted as final, and the IRAS will issue a Notice of Assessment (NOA) reflecting your company’s chargeable income and the corresponding tax payable.

Payment of the corporate income tax is typically due within one month from the date of the NOA. The tax amount and deadline will be specified on the NOA. Should you disagree with the assessment, you will have up to two months from the NOA date to lodge an objection to IRAS, stating the grounds.

Once the tax assessment is finalised, you can make payment via various methods, the most common being the General Interbank Recurring Order (GIRO). GIRO will allow either a one-time deduction or up to 12 monthly interest-free instalments for the tax amount. You can easily verify your outstanding balance and payment status via the IRAS’ myTax Portal.

It's worth nothing that companies in Singapore are considered either tax resident or non-resident. If your company is tax resident, you may enjoy access to the country’s network of double tax treaties and qualify for tax exemption schemes.

Tax residency is determined based on where the business is controlled and managed, typically where your board of directors meets to make strategic decisions. If those board meetings take place outside of Singapore, your company is likely to be treated as non-resident.

A foreign-incorporated company can qualify as Singapore tax resident if key management and decision-making functions are exercised here. This is therefore an important consideration for groups running regional headquarters or holding structures.

In cases of doubt, the IRAS will assess a range of factors, including where board meetings are held, the residency of directors and whether key employees are based in Singapore.

There are a range of tax exemption schemes available as a form of support, especially if you are operating a small business or have just set up a new company. By default, the company will qualify for the partial tax exemption (PTE), unless it qualifies for the start-up exemption. Under the PTE, 75% of the first SG$10,000 of chargeable income and 50% of the next SG$190,000 is exempt from tax.

If the company is newly incorporated, it may be eligible for the tax exemption scheme for new start-up companies (SUTE), which offers a slightly higher exemption in the first three YAs. Under the SUTE, the company qualifies for 75% exemption on the first SG$100,000 of chargeable income and 50% exemption on the next SG$100,000.

Besides exemptions, the government occasionally introduces corporate income tax rebates. In the Singapore Budget 2025, a rebate of 50% of tax payable (capped at SG$40,000) was granted for YA 2025. If you’d like to learn more, our team can help you assess your eligibility for the relevant schemes and assist with your corporate tax filing. 

Transfer pricing compliance is an important requirement in Singapore, especially if you are part of a multinational group. Transfer pricing refers to the prices you set for transactions with related parties such as subsidiaries and affiliates.

Singapore applies the arm’s length principle, meaning these related-party transactions must be priced as though they were conducted between independent parties, reflecting fair market value.

If you manage cross-border transactions with related entities, you will need to do the due diligence and maintain contemporaneous transfer pricing documentation. This involves keeping the records and information used to determine your transfer prices, prepared before or at the time the transactions occur.

This documentation is mandatory if your company’s gross revenue exceeds SG$10 million, or if you were required to prepare it in the previous year (unless the company qualifies for exemption based on the existing transfer pricing guidelines). While you will not need to file the documentation with your annual tax return, you must have it ready and completed before the tax filing due date.

The IRAS may request to review your transfer pricing documentation at any time. They also have the authority to adjust your reported profits or losses and impose a 5% surcharge on any upward transfer pricing adjustment. It is therefore important for your related-party transactions to be priced at arm’s length to maintain compliance.

Bear in mind accounting records, invoices, receipts and other source documents must be retained for at least five years from the relevant YA. For example, records for the financial year 2024 (YA 2025) must be kept until at least the end of 2029.

This retention rule applies even if your company has ceased operating. If the company is struck off or wound up, an appointed officer or liquidator must ensure records are securely maintained for five years after dissolution.

You may choose to store your records in either physical or digital form, although the use of accounting software is preferred. Important documents to retain include sales invoices, purchase receipts, bank statements, contracts, payroll records and accounting ledgers.

A “body of persons” refers to an entity that is not a company or partnership, but still an entity or collective that earns income in Singapore. This typically includes clubs, associations, trade bodies and management corporations for condominiums.

Since YA 2020, the income of bodies of persons is taxed at the prevailing corporate tax rate of 17%. From a compliance standpoint, bodies of persons must file a Form P1 tax return instead of the Form C. Filing must be completed by 15 April each year, earlier than companies. As with companies, there are penalties for late filing or non-filing.

For effective employee management and compliance in Singapore, understanding the personal income tax regulations is essential.

Tax residents in Singapore are taxed on a progressive rate from 0% to 24%. Filing of personal income tax returns is mandatory if their annual income is SG$20,000 or more. Tax residents do not need to pay tax if their annual income is less than SG$20,000.

On the other hand, non-residents are taxed at a flat rate of 15% on their employment income or at resident rates, whichever results in a higher tax amount. Other types of income, such as directors’ fees, are taxed at 24%.

If your company has five or more employees, you will need to join the Auto-Inclusion Scheme (AIS). This involves submitting your employees’ income details to the IRAS, which will simplify the filing process for them. Moving forward, they will only need to verify and submit their personal income tax returns.

Also known as value added tax (VAT) in other countries, the goods and services tax (GST) is a consumption tax that is levied on the supply of goods and services, as well as the import of goods into Singapore. Currently set at 9%, GST is an indirect tax applied to the selling price of goods and services provided by GST-registered businesses.

Bear in mind that companies incorporated in Singapore are not automatically registered to charge GST. You will need to continually assess the need to be registered for GST. Registration is compulsory when:

• Your taxable turnover exceeds SG$1 million at the end of the calendar year; or
• You are currently making sales and can reasonably expect your business turnover to exceed SG$1 million in the next 12 months.

You may also voluntarily register for GST. For registrations made on or after 1 April 2026, this will come with the added requirement to adopt e-invoicing through the InvoiceNow system. This means your company must be able to issue and receive e-invoices once registered. Our team can work with you on the integration process if your company is not yet connected to the InvoiceNow network.

Subsequently, you will need to e-file your GST return to the IRAS on a quarterly basis. If there is no tax due for the relevant period, you can submit a ‘nil’ return. Penalties will be imposed if you file the GST return late.

Withholding tax is another crucial aspect of Singapore’s tax system, particularly affecting non-resident companies. A company is considered non-resident if its control and management are conducted outside of Singapore, including:

• Companies incorporated outside Singapore that have operations in Singapore
• Singapore-incorporated offices that are managed and/or controlled outside Singapore
• Singapore branches of foreign companies

As a non-resident company, you may be subject to the withholding tax on certain types of income. Withholding tax requires a payer to deduct tax from payments, such as royalties, interest, or technical services fees made to a non-resident company. The payer then remits this tax to the IRAS. This ensures that tax is collected on income earned in Singapore by non-resident entities.

The withholding tax rate will vary based on the type of payment. The primary impact is that it may reduce the net income received by your non-resident company. To provide relief, Singapore has double tax treaties with various countries to prevent companies from being taxed by both jurisdictions.

Property tax in Singapore is a yearly tax on ownership, calculated based on the property’s annual value (AV). The AV reflects the estimated annual rent your property could earn if rented out and is assessed by the IRAS using rental data from similar properties nearby. This tax applies regardless of whether your property is occupied or vacant.

For owner-occupied residential properties, progressive rates apply. The first SG$12,000 of AV is exempt, followed by 4% on the next SG$28,000, 6% on the next SG$10,000, with rates gradually increasing to a maximum of 32% on AV above SG$140,000.

Non-owner-occupied residential properties, such as investment properties, are subject to higher rates. These start at 12% on the first SG$30,000 of AV, rise to 20% on the next SG$15,000, 28% on the following SG$15,000, and reach 36% on AV above SG$60,000.

For all other properties, including commercial and industrial premises, a flat 10% of AV applies.

The property tax bill is typically issued by the IRAS in December for the year ahead. For example, the bill for 2026 (covering January to December) would be released in late 2025. As with the income tax, you can arrange for payment to be made over 12 months through a GIRO instalment plan.

Stamp duties are taxes on certain legal documents and transactions, most significantly on property transfers and share acquisitions. As a business, you are most likely to encounter stamp duty in two situations:

• When buying or acquiring property
• When purchasing shares in another company

Buying or acquiring property

For real estate transactions, two types of stamp duty may apply: Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD).

The BSD follows a tiered rate structure and is calculated on either the purchase price or the market value of the property, whichever is higher. As of 2025, BSD rates for residential properties are:

• 1% on the first SG$180,000 of price
• 2% on the next SG$180,000
• 3% on the next SG$640,000
• 4% on the next SG$500,000
• 5% on the next SG$1,500,000
• 6% on any value above SG$3 million

For non-residential property, such as commercial or industrial units, the BSD is capped at 5%.

In addition to the BSD, the ABSD applies in certain cases. For example, Singapore citizens pay 20% ABSD on their second property and 30% on a third or subsequent property. Permanent Residents (PR) pay 5% on their first property, 30% on the second and 35% on the third.

For a foreign company or individual considering Singapore residential real estate, however, transaction costs can be high due to the ABSD. Foreigners purchasing any residential property must pay 60% ABSD while companies face an even higher rate of 65%.

It’s important to note that stamp duties must be paid promptly, either within 14 days of signing the purchase agreement (if in Singapore) or 30 days if signed overseas. Payment is made to the IRAS, and stamping can be done electronically via IRAS’ e-Stamping portal.

Buying shares in another company

When you transfer stocks or shares in a Singapore-incorporated company that is not listed on the Singapore Exchange, stamp duty is charged at 0.2% of the purchase price or market value, whichever is higher. This generally applies to private limited company share transactions.

For instance, if your company acquires another company’s shares for SG$1 million, stamp duty of 0.2% (SG$2,000) would be payable on the transfer documents. The duty is typically borne by the buyer. It's worth noting that shares in foreign companies and publicly traded Singapore stocks are exempt from stamp duty.

For share transfers, stamping must be completed within 14 days of executing the transfer form.

If you are a large multinational enterprise (MNE) with global revenue of at least €750 million and operations in Singapore, take note that from 2025 your effective tax rate will be raised to a minimum of 15%.

This adjustment reflects Singapore’s adoption of global tax reforms, with two key measures introduced: the Income Inclusion Rule (IIR) and the Domestic Top-up Tax (DTT).

Under the IIR, your home jurisdiction may impose tax on the profits of overseas subsidiaries if those profits were taxed below the 15% minimum abroad. The DTT allows Singapore to collect a top-up locally, ensuring your entities here meet the 15% effective rate.

For example, if your Singapore subsidiary enjoys incentives or exemptions that reduce its effective tax rate to 5%, a 10% top-up will apply.

It is important to note that this regime applies only to large MNEs. Smaller companies remain unaffected and will continue under the standard 17% corporate tax rate with access to existing reliefs and incentives. Given the complexity of these rules, our team is on hand and ready to help you understand how they may affect your group structure and tax planning.

If your organisation is registered under the Charities Act and approved by the Commissioner of Charities, it will generally be exempt from income tax in Singapore.

To strengthen your fundraising efforts, you may also consider applying for the Institution of a Public Character (IPC) status. This allows your donors to claim tax deductions, making your charity more appealing to potential supporters.

That said, being a registered charity does not automatically exempt you from all tax obligations. If your charity conducts business activities and its annual taxable supplies exceed SG$1 million, you will still need to register for GST and comply with the relevant requirements.

In Singapore, the tax treatment of trust income depends on how the income is managed. If you retain the income within the trust, it will be taxed at a flat rate of 17%.

Once the income is distributed, the tax liability will shift to the beneficiary. If the beneficiary is a Singapore tax resident entitled to trust income under the trust deed, their portion will be taxed at personal income tax rates. They may also claim the usual exemptions and reliefs available to resident taxpayers.

Where beneficiaries are non-residents, you remain responsible for the tax. Their share of trust income is taxed at 17%, with you as trustee required to file and pay on their behalf.

As of 2025, Singapore remains estate-duty free, having abolished estate duty back in 2008. The country remains attractive high net worth families and individuals looking to set up family offices.

A double taxation agreement (DTA) is a bilateral agreement between two countries to prevent double taxation that may occur due to the application of their respective domestic tax laws. Only residents can benefit from the application of the DTA. The definition of a resident will be outlined in the relevant DTA and referred to for application purposes. This applies to both individuals, as well as corporates/bodies of person.

The types of income typically covered under a DTA include:

• Income from immovable property
• Shipping and transport
• Royalties
• Dividends
• Capital gains
• Interest income
• Director fees
• Employment income
• Professional fees

For foreign income earned from a treaty country, you are entitled to claim relief under the relevant tax treaty by submitting a Certificate of Residence (COR) to the foreign country. This is proof of your Singapore tax residency.

On the other hand, if you are a tax resident of a treaty country, you will need to provide IRAS with a completed COR, duly certified by the tax authority of the treaty country.

The SFRS for Small Entities is an alternative framework to the FRS and SFRS(I) for eligible entities in Singapore. The SFRS for Small Entities provides an optional financial reporting standard, with the objective to provide some relief to smaller private companies while maintaining quality, transparency and comparability. This ensures the investment community and other users of financial statements still have reliable information for decision-making.

The SFRS(I) and FRS requires more comprehensive reporting and is mainly used by medium to large companies. In comparison, the SFRS-SE allows for simpler statements with reduced disclosures, which can lower compliance costs. However, its lighter level of detail may not always meet the expectations of investors or other stakeholders.

You may consider the SFRS-SE if your business:

• Is not publicly accountable
• Publishes general-purpose financial statements for external users
• Is a small entity – an entity qualifies as a small entity if it meets at least two of the three following criteria:
  • Total annual revenue does not exceed SG$10 million
  • Total gross assets do not exceed SG$10 million
  • Total number of employees is 50 or less

You can then use the SFRS-SE until your business exceeds the thresholds for two consecutive reporting periods. At this point, you will need to transition to the full SFRS.

If you have just incorporated in Singapore, the SFRS-SE may be adopted right from the first two years of operation, provided your company is not publicly accountable.

Each year, you are required to submit a complete set of financial statements to the Accounting and Corporate Regulatory Authority (ACRA). To provide a full picture of your company’s financial performance and position, this will include a:

• Statement of financial position: To show assets, liabilities and equity
• Statement of profit or loss and other comprehensive income: To report profit or loss, as well as other comprehensive income for the period
• Statement of cash flows: To detail cash movements from operating, investing and financing activities
• Statement of changes in equity: To explain changes in owners’ equity (for example, opening balance, profit, dividends)

You’ll also need to provide explanatory notes on your accounting policies and financial statement preparation.

If your organisation is a registered charity or an approved IPC in Singapore, you will need to follow a specific accounting framework known as the Charities Accounting Standard (CAS).

Under the CAS, your financial statements must include a statement of financial activities, a balance sheet, and a statement of cash flows. These differ slightly from the financial statements prepared by companies, but they serve the same purpose of giving a clear view of your charity’s resources and expenditures.

However, if you have significant non-charity subsidiaries, you must apply the full SFRS instead.