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Singapore Corporate Tax Guide

Last Updated: Feb 2026

Singapore’s corporate tax system is often described as simple and business-friendly, but understanding how it actually works requires more than just knowing the headline tax rate.

This guide explains how corporate tax applies to Singapore companies in practice, from what income is taxable and who is taxed, to how exemptions, incentives, and rebates reduce the final tax payable. Whether you are running a startup or an established business, the goal is to help you understand the logic of the system, avoid common misconceptions, and see clearly how your company’s corporate tax is calculated.

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Table of Contents

Key Takeaways

How Singapore Corporate Tax Works: Overview

What Is the Corporate Tax Rate in Singapore?

Who Is Taxed in Singapore

What Income Is Taxable in Singapore

Tax Incentives, Exemptions, and Rebates in Singapore

How to Calculate Taxable Income

Singapore Corporate Tax Examples

FAQs

Singapore Corporate Tax explained

Key Takeaways

Singapore operates a single-tier corporate tax system. Profits are taxed at the company level, and dividends paid to shareholders are not taxed. Singapore does not impose a capital gains tax, subject to income-versus-capital principles.

Singapore taxes profits, not revenue, so corporate tax applies only to net income after allowable deductions and reliefs.

The headline corporate tax rate is 17%, but most companies pay a lower effective rate due to tax exemptions, incentives, and periodic rebates.

Singapore uses a territorial tax system. Companies are taxed on income earned in Singapore. Foreign income is generally not taxed unless received in Singapore, and tax-resident companies may qualify for foreign-sourced income exemptions.

Tax residency matters because it affects access to treaty benefits and foreign-sourced income exemptions.

Business losses can generally be carried forward to offset future taxable profits, subject to certain conditions.

Singapore has an extensive network of double tax treaties, which helps reduce withholding taxes and avoid double taxation on cross-border income.

How Singapore Corporate Tax Works: Overview

Singapore’s corporate tax system is structured to be straightforward once you understand the underlying logic. Instead of taxing every dollar that comes in, Singapore focuses on taxable profits and applies tax at the company level, with clear rules on what falls within the Singapore tax net.

Corporate tax is charged on a company’s chargeable income, which is broadly the company’s profits after allowable deductions, capital allowances, and applicable reliefs. In practical terms, this means a company is taxed on what it earns after business costs, not on gross revenue. The tax computation starts from the company’s accounting results and is then adjusted under tax rules to arrive at the final taxable amount.

A second defining feature is Singapore’s one-tier approach to corporate taxation. Profits are taxed once at the company level, and when those after-tax profits are distributed to shareholders as dividends, there is generally no further Singapore tax on the dividend. This design avoids double taxation and keeps the system predictable for founders and investors.

Singapore is also a territorial tax jurisdiction, which means the tax outcome depends heavily on where income is sourced and how it is received. Income that arises from activities carried out in Singapore is generally within scope. Income that arises outside Singapore is generally outside scope unless it is received in Singapore, and specific exemptions may apply depending on the facts and the company’s tax residency status. This is why sourcing and “receipt in Singapore” become central concepts for companies with overseas customers, regional teams, or foreign subsidiaries.

To support cross-border business, Singapore maintains an extensive network of double tax treaties. These treaties are designed to prevent the same income from being taxed twice and often reduce or eliminate foreign withholding taxes on dividends, interest, royalties, and service income. Access to treaty benefits generally depends on the company being tax-resident in Singapore, which is why tax residency plays a key role in international tax planning.

With this framework in mind, the sections below walk through who is taxed, headline vs effective tax rate, what income is taxable, how tax incentives work, and how to calculate tax payable with practical examples.

What Is the Corporate Tax Rate in Singapore?

Singapore applies a flat corporate tax rate of 17% on a company’s chargeable income. This rate applies uniformly to both resident and non-resident companies on income that falls within Singapore’s tax scope.

However, the headline rate does not reflect what most companies actually pay. Various tax exemption schemes, reliefs, and periodic corporate tax rebates can significantly reduce the effective tax rate. As a result, understanding how taxable income is calculated and which exemptions apply is often important to understand the final applicable tax rate.

Who Is Taxed in Singapore?

Singapore corporate tax applies to companies that have taxable income within Singapore’s tax net. In practice, the “who” comes down to two related questions: (1) where the income is sourced, and (2) whether the company is tax-resident in Singapore. These two factors determine both the company’s exposure to Singapore tax and the benefits it may be able to claim.

All companies are taxed on Singapore-sourced income

A company that has a Singapore presence (set up in Singapore or registered as a branch office in Singapore) can be tax-resident or non-resident, but if it earns Singapore-sourced income, that income is generally taxable in Singapore. This is why “tax residency” does not decide whether Singapore-sourced income is taxable; it primarily affects what additional reliefs and benefits the company can access.

Tax residency affects access to benefits, not the existence of tax

A company is generally treated as tax-resident in Singapore if its control and management are exercised in Singapore. In simple terms, this refers to where key strategic decisions are made, typically where the board and senior management direct the company’s business and policies. Company tax residency is assessed year by year, so a company may be resident in one year and non-resident in another depending on where decision-making occurs.

Tax residency matters because tax-resident companies are more likely to qualify for important benefits, including:

  • Double Tax Agreement (DTA) relief, which can reduce foreign withholding tax and help avoid double taxation on cross-border income
  • Foreign-sourced income exemptions in situations where foreign income is received in Singapore and the relevant conditions are met
  • Certain tax incentives and reliefs that are limited to or designed around tax-resident companies

Non-resident companies generally cannot access treaty benefits through Singapore and typically do not qualify for foreign-sourced income exemptions, which can lead to higher overall tax friction for international operations.

Non-resident companies may face withholding tax on certain Singapore-source payments

For some types of Singapore-sourced payments, tax may be collected through withholding tax. This commonly arises when Singapore payers make certain payments to non-resident companies, such as interest, royalties, or specific categories of service-related payments. The key point for founders is that non-resident status can change how tax is collected, even when the underlying income is Singapore-sourced.

The practical takeaway

If your company earns income connected to Singapore, it may have a Singapore corporate tax position regardless of where the shareholders live or where customers are based. Tax residency then becomes a second-layer consideration: it often determines whether you can reduce tax through treaty relief and whether foreign-sourced income can remain tax-efficient when received in Singapore.
In the next section, we turn to the most important operational question founders face: what business income is taxable in Singapore, and how Singapore distinguishes Singapore-sourced from foreign-sourced income.

What Income Is Taxable in Singapore?

Singapore taxes companies based on where income is sourced and, for foreign income, whether it is received in Singapore. This is the core idea behind Singapore’s territorial tax system. For founders, the most important takeaway is that the tax outcome is driven by the underlying facts of how and where the business operates, not simply where customers are located or where payments come from.

At a high level, income can be grouped into two buckets:

  • Singapore-sourced income: income arising from business activities carried out in Singapore
  • Foreign-sourced income: income arising from business activities carried out outside Singapore

Singapore-sourced income is generally within Singapore’s taxing scope. Foreign-sourced income is generally outside Singapore’s taxing scope unless it is received in Singapore, and even then, exemptions may apply depending on the company’s tax residency and the nature of the income.

Singapore-sourced income

Singapore-sourced income is broadly income that arises from activities performed in Singapore. The key concept is “source”: Singapore looks at where the income-producing operations and decision-making occur. If the work is performed, managed, or fulfilled from Singapore, the income is typically treated as Singapore-sourced, even if the customer is overseas.

This is where founders often get it wrong. An overseas client does not automatically mean foreign-sourced income. What matters is where your company actually performs the work and runs the business that generates the income.

Foreign-sourced income

Foreign-sourced income arises from activities carried out outside Singapore. Common categories include:

  • Overseas branch profits
  • Foreign dividends (for example, dividends from an overseas subsidiary)
  • Foreign service income tied to operations performed outside Singapore

In general, foreign-sourced income is not taxed in Singapore unless it is received in Singapore. “Received” is broader than a simple bank transfer. If the income is brought into Singapore or used for Singapore-related purposes, it may be treated as received in Singapore.

When foreign income becomes relevant for Singapore tax

Foreign income becomes relevant to Singapore tax when it is received in Singapore. At that point, the tax treatment depends on the facts and the company’s status. In many practical cases, tax-resident companies may qualify for exemptions on foreign-sourced income received in Singapore, provided the relevant conditions are met and documentation is maintained. Non-resident companies generally have fewer pathways to claim such exemptions.

This is why tax residency and sourcing are closely linked in cross-border situations: sourcing determines whether income is local or foreign, and residency often determines whether exemptions and treaty benefits are available.

Practical takeaway

For companies operating only in Singapore, most business income will generally fall within Singapore’s tax net. For companies with cross-border operations, the tax outcome depends on where income is generated, whether foreign income is received in Singapore, and whether exemptions or treaty relief apply. Understanding these distinctions is essential before moving on to tax incentives, exemptions, and how final tax payable is calculated.

Tax Incentives, Exemptions, and Rebates

Singapore’s headline corporate tax rate is 17%, but in practice many companies pay a lower effective rate. This is because the tax system includes built-in schemes that reduce taxable income or reduce the final tax payable. The key point for founders is that the headline rate is only the starting point. What you actually pay depends on which exemptions apply and whether there are rebates in the relevant year.

Start-Up Tax Exemption (SUTE)

SUTE grants partial exemptions on the first S$200,000 of chargeable income for qualifying new tax-resident companies in their first three Years of Assessment.

Eligible startups receive:

  • 75% exemption on the first S$100,000 of normal chargeable income
  • 50% exemption on the next S$100,000

This results in an effective tax rate of about 6.4 percent on the first S$200,000 of chargeable income.

Eligibility criteria:

  • The company must be incorporated in Singapore
  • Must be a Singapore tax resident
  • Must have no more than 20 shareholders, with at least one individual holding 10% or more
  • Cannot be an investment-holding or property development company

Partial Tax Exemption (PTE)

PTE Exemption provides partial exemptions on the first S$200,000 of chargeable income for companies that do not qualify for SUTE.

PTE offers:

  • 75% exemption on the first S$10,000 of normal chargeable income
  • 50% exemption on the next S$190,000

This brings the effective tax rate on the first S$200,000 of income to about 8.3 percent.

Eligibility criteria:

  • Applies to all companies except those claiming SUTE
  • No special conditions or shareholder requirements

Corporate Tax Rebates

From time to time, the government introduces corporate tax rebates for specific Years of Assessment. A rebate reduces the final tax payable, typically calculated as a percentage of the tax bill, sometimes subject to a cap. Unlike SUTE or PTE, which reduce taxable income, a rebate reduces the amount of tax due after the tax computation has been done.

Because rebates are announced and adjusted periodically, companies should treat them as “prevailing” benefits that may apply in a given year, rather than permanent features of the system. When a rebate is available, it can significantly lower tax payable, especially for companies with larger tax bills.

Business Losses and Loss Carry-Forward

Loss-making years are common for startups, and Singapore’s rules generally allow business losses to be carried forward and used to offset future taxable profits, subject to conditions. For founders, this means that losses are not “wasted.” They can reduce tax in later profitable years, which is helpful for long-term planning and cash flow forecasting.

Double Tax Relief and Foreign Tax Credits

Singapore’s extensive network of Double Taxation Agreements (DTAs) helps avoid the double taxation of foreign income. If tax has already been paid overseas, companies may claim:

  • Double Tax Relief (treaty-based credit) when a DTA exists, or
  • Foreign Tax Credit (unilateral relief) when no treaty exists

In both cases, the company receives a credit for foreign taxes paid, up to the amount of Singapore tax payable on the same income.

How to Calculate Taxable Income?

Corporate tax in Singapore is charged on a company’s chargeable income, not on its revenue. In practical terms, taxable income starts with your company’s business results for the financial year and is then adjusted under tax rules to arrive at the amount that is subject to corporate tax. Founders should understand this flow because it explains why two companies with the same revenue can end up with very different tax bills.

At a high level, the logic looks like this:

Profit before tax (from accounts) + non-deductible expenses and non-taxable adjustments − allowable deductions and capital allowances = Chargeable income (taxable income)

The sections below explain the key moving parts.

Start from your accounting profit

Singapore corporate tax computations typically begin with the company’s profit before tax as shown in the financial statements. These accounts are generally prepared on an accrual basis, meaning income and expenses are recognised when earned or incurred, not only when cash moves. The tax computation then adjusts this accounting profit to reflect what is deductible or taxable under Singapore tax rules.

Deductible vs non-deductible business expenses

A core principle is that expenses are generally deductible only if they are wholly and exclusively incurred in the production of income. In other words, the expense must be incurred for business purposes, and you must be able to support it with proper records.

In practice, this means:

  • Typically deductible: ordinary operating costs incurred to run the business, such as staff costs, rent, utilities, professional fees, and business-related software subscriptions.
  • Typically not deductible: expenses that are private or personal in nature, capital in nature (because they are dealt with through capital allowances instead), or not sufficiently supported by documentation.

This is also where founders most often create avoidable problems. If an expense is real but poorly documented, it may still be disallowed. Good record-keeping is not just compliance, it directly affects the tax outcome.

Capital expenditure and capital allowances

Certain spending is treated as capital expenditure, meaning it relates to acquiring or improving long-term assets (for example, equipment or certain business assets). Capital expenditure is generally not deducted as an immediate expense for tax purposes. Instead, Singapore allows tax deductions over time through capital allowances, which are tax deductions specifically designed for qualifying capital assets.

Founders should also note that accounting depreciation and tax capital allowances are not the same thing. Your accounts may show depreciation, but for tax purposes you typically claim capital allowances based on tax rules.

Other common tax adjustments

Beyond expenses and capital allowances, taxable income can also be affected by other adjustments depending on the company’s facts. Examples include the treatment of certain provisions, timing differences, and income items that are not taxable or are taxed differently. The practical takeaway is that taxable income is not always identical to accounting profit, even when the business is straightforward.

From taxable income to final tax payable

Once taxable income is determined, the corporate tax rate is applied, and then relevant schemes (such as SUTE or PTE) and any prevailing rebates are taken into account to arrive at the final tax payable. This is why the calculation is best understood as a sequence: first compute taxable income, then apply the schemes that reduce what you pay.

Singapore Corporate Tax Examples (YA 2026)

The examples below illustrate how Singapore corporate tax is calculated in practice. They are simplified for clarity and are based on Year of Assessment (YA) 2026. Where corporate tax rebates are shown, they reflect the prevailing YA 2026 rebate rules, which are announced on a year-by-year basis and may change in future years.

Example 1: Tax-Resident Company, 2nd Year of Operation (YA 2026)

Scenario:

  • Tax residency: Singapore tax-resident
  • Year of operation: 2nd year (eligible for Start-Up Tax Exemption)
  • Year of Assessment (YA): YA 2026
  • Revenue: S$400,000 (all Singapore-sourced)
  • Profit before tax: S$150,000
  • Corporate tax rebate: Assumes YA 2026 rebate of 50% of tax payable, capped at S$40,000

Simplified Tax Calculation:

  • Chargeable income of S$150,000 reduces to S$50,000 after applying Start-Up Tax Exemption (SUTE)
  • Corporate tax at 17%: S$8,500
  • YA 2026 corporate tax rebate (50%): −S$4,250
  • Final tax payable: S$4,250
  • Effective tax rate: ~2.8% on S$150,000 of profits

    Example 2: Tax-Resident Company, 5th Year of Operation (YA 2026)

    Scenario

    • Tax residency: Singapore tax-resident
    • Year of operation: 5th year (no longer eligible for Start-Up Tax Exemption)
    • Year of Assessment (YA): YA 2026
    • Revenue: S$2,000,000 (all Singapore-sourced)
    • Profit before tax: S$600,000
    • Corporate tax rebate: Assumes YA 2026 rebate of 50% of tax payable, capped at S$40,000

      Simplified Tax Calculation

      • Chargeable income of S$600,000 reduced under Partial Tax Exemption (PTE) to S$497,500
      • Corporate tax at 17%: S$84,575
      • YA 2026 corporate tax rebate (50%, capped): −S$40,000
      • Final tax payable: S$44,575
      • Effective tax rate: ~7.4%

        Example 3: Tax-Resident Company, 5th Year of Operation, With a Subsidiary in Malaysia (YA 2026)

        Scenario

        • Tax residency: Singapore tax-resident
        • Year of operation: 5th year (not eligible for Start-Up Tax Exemption)
        • Year of Assessment (YA): YA 2026
        • Group structure:
          • Singapore parent company
          • Wholly owned operating subsidiary in Malaysia
        • Profit before tax:
          • Singapore operations: S$300,000
          • Malaysia subsidiary: S$700,000
        • Treatment of Malaysian profits:
          • Earned and retained at the Malaysian subsidiary level
          • Not remitted to Singapore in YA 2026
        • Corporate tax rebate: Assumes YA 2026 rebate of 50% of tax payable, capped at S$40,000

        Key tax position (before calculation)

        • Only Singapore-sourced profits (S$300,000) fall within Singapore’s tax net.
        • Profits earned by the Malaysian subsidiary are not taxable in Singapore in this year because they are not received in Singapore.
        • Any Malaysian corporate tax paid by the subsidiary is outside the scope of this example.

          Simplified Tax Calculation

          • Chargeable income of S$300,000 reduced to S$197,500 under Partial Tax Exemption (PTE)
          • Corporate tax at 17%: S$33,575
          • YA 2026 corporate tax rebate (50%): −S$16,787.50
          • Final Singapore tax payable: S$16,787.50
          • This example assumes that foreign profits are earned through a separate overseas subsidiary and are not remitted to Singapore in the relevant Year of Assessment. Different facts may lead to different tax outcomes.
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