Singapore Corporate Tax & Tax Benefits for Foreign Companies

Singapore offers one of the most competitive corporate tax rates globally at a flat 17%. This rate applies to both local and foreign companies, making it significantly lower than many European countries including Italy's 24% rate.

• Flat 17% corporate tax rate for all companies
• No capital gains tax
• No dividend withholding tax
• Single-tier tax system (dividends are tax-free to shareholders)
• Partial tax exemption for first SGD 200,000 of chargeable income

Budget 2025 announced significant support for businesses with a Corporate Income Tax (CIT) Rebate of 50% for Year of Assessment 2025.

• 50% CIT rebate on corporate tax payable for YA 2025
• Maximum benefit capped at SGD 40,000 per company
• Active companies with local employees receive minimum SGD 2,000 cash grant
• CIT Rebate Cash Grant distributed by Q2 2025
• Available to both tax resident and non-resident companies

Newly incorporated Singapore companies can enjoy substantial tax exemptions in their first three years of operation.

• 75% exemption on first SGD 100,000 of chargeable income
• 50% exemption on next SGD 100,000 of chargeable income
• Effective tax rate can be as low as 4.25% for qualifying startups
• Must be incorporated in Singapore (not available for branches)
• Company must have max 20 shareholders with at least one individual holding 10%+ shares

Singapore operates a territorial tax system, meaning companies are taxed on income derived from or received in Singapore. This creates significant advantages for international businesses.

• Foreign-sourced income may be exempt if not remitted to Singapore
• Even if remitted, exemptions apply if income was already taxed abroad at 15%+
• No tax on foreign dividends, branch profits, and service income under certain conditions
• Ideal structure for regional headquarters and holding companies

Singapore has signed over 90 comprehensive Avoidance of Double Taxation Agreements (DTAs), including with Italy, allowing businesses to avoid being taxed twice on the same income.

• Italy-Singapore DTA in effect
• Reduced withholding tax rates on dividends, interest, and royalties
• Tax credits available for foreign taxes paid
• Protection against discriminatory taxation

Singapore has enacted the Multinational Enterprise (Minimum Tax) Act 2024 implementing a 15% minimum effective tax rate for large MNEs.

• Applies to MNE groups with global revenue of EUR 750 million+
• Effective for financial years starting January 1, 2025
• Income Inclusion Rule (IIR) and Domestic Top-up Tax (DTT) implemented
• Small and medium businesses are not affected