The 17% headline rate is not what most companies actually pay
Singapore taxes company profits at a flat 17%. That single number is why the country keeps showing up on “best place to start a business” lists. It’s also the number that trips people up, because almost no small company pays the full 17% on every dollar it earns. Exemptions, a rebate, and the difference between profit and chargeable income all pull the real figure lower.
This guide covers what your company will actually owe after those reliefs, when the return is due, and what you can and cannot deduct. Two worked examples at the end run the maths line by line, from profit to final tax bill.
Corporate Tax in Singapore at a Glance
| Highlights | Details |
|---|---|
| Headline rate | Flat 17% on chargeable income, one tier, no brackets |
| What most SMEs pay | Well below 17% after exemptions and the rebate |
| New company relief | Start-Up Tax Exemption — up to S$125,000 exempt a year, first 3 years |
| Established company relief | Partial Tax Exemption — up to S$102,500 exempt a year |
| YA 2026 rebate | 50% of tax payable, capped at S$40,000, plus a S$2,000 cash grant for eligible employers |
| ECI deadline | Within 3 months of your financial year-end |
| Tax return deadline | 30 November each year (Form C-S / C-S (Lite) / C) |
Miss a filing deadline and the penalties are real: IRAS can issue an estimated assessment and impose penalties of up to S$5,000 for continued non-filing. But the reliefs are automatic once you file correctly, so the job is mostly filing on time with clean numbers.
Table of Contents
- How much is corporate tax in Singapore?
- How corporate tax works in Singapore
- What counts as taxable income
- What your company can deduct
- How to lower corporate tax in Singapore legally
- Who is exempt from corporate tax?
- How to calculate corporate tax: two worked examples
- When to file and pay corporate tax in Singapore
- Corporate tax for foreign companies
- Corporate tax vs the other taxes your company pays
- FAQs
How Much Is Corporate Tax in Singapore?
Singapore’s corporate income tax rate is a flat 17% on chargeable income, with no brackets and no separate rate for small companies. Chargeable income is your profit after allowable deductions, capital allowances, and exemptions, not your revenue, so the effective rate a company pays is almost always lower than 17%.
The 17% flat rate
There is one rate, and it has not moved for years. A company with S$1,000,000 of chargeable income and no reliefs would owe S$170,000. The reason so few companies pay that proportion is that the exemptions below carve out the first chunk of income before the rate is applied.
Why your effective rate is lower than 17%
Two things bring the real rate down. First, the exemption schemes shield the first S$100,000 to S$200,000 of chargeable income, depending on which scheme your company qualifies for.
Second, a rebate is applied to the tax that remains. Stack both and a profitable SME can end up paying an effective rate in the single digits on its first couple of hundred thousand dollars of profit.
The YA 2026 Corporate Income Tax Rebate
For the Year of Assessment (YA) 2026, companies get a Corporate Income Tax Rebate of 50% of the tax payable, capped at S$40,000. This was raised from the 40% first announced at Budget 2026, enhanced in April 2026 to help companies with higher energy costs.
Companies that were active and employed at least one local employee in the preceding calendar year also receive a minimum S$2,000 cash grant, disbursed automatically from the second quarter of 2026. Where a company receives the S$2,000 grant, the rebate portion is capped so the two together do not exceed S$40,000.
💡 A “Year of Assessment” is the year in which income is taxed. YA 2026 covers the financial year ended in 2025. So the rebate applies to the profits your company earned in its 2025 financial year.
📖 Related reading: new to filing? Our complete guide to YouBiz covers the account side of running a Singapore company.
How Corporate Tax Works in Singapore
Singapore taxes income on a territorial basis. Income earned in Singapore is taxed when it arises, and foreign income is taxed only when it is received in Singapore, not when it is earned abroad. That distinction matters for any company with overseas customers or accounts.
Singapore-sourced income
Income accruing in or derived from Singapore is taxable. If your company bakes cakes in Singapore and sells them here, that is Singapore-sourced income. Interestingly, if you bake them in Singapore and ship them to a customer in Malaysia, the income is still Singapore-sourced, because the trade is carried out here. The place of the work, not the location of the customer, is what counts.
Foreign income and the remittance rule
Foreign-sourced income becomes taxable when it is received in Singapore. Say your company holds a fixed deposit in another country. The interest sits offshore untaxed until the day it is remitted here, at which point it enters your chargeable income. Foreign income can qualify for exemption or foreign tax credits in some cases, so if your company earns meaningfully abroad, this is worth a proper look with your accountant.
Why capital gains are not taxed
Singapore does not tax capital gains. If your company sells an asset it held for its business, such as its own premises, the profit is generally not taxable, because it is capital in nature rather than trading income. The line between the two is not always obvious, which is what the “badges of trade” test in the next section sorts out.
Year of Assessment vs financial year
Your financial year is your company’s own accounting period. The Year of Assessment is the calendar year in which that period’s profits are taxed, and it runs one step behind. Profits from a financial year ending in 2025 are taxed in YA 2026. Getting these two straight is the single most common source of confusion in company tax.
What Counts as Taxable Income
Only income of a revenue nature is taxable. Trading profits, service fees, rental income, and interest are all revenue and therefore taxable. One-off gains on the sale of a capital asset are not.
Revenue vs capital: the badges of trade
When a transaction is a one-off and it is not obvious whether the gain is trading profit or a capital gain, IRAS applies the “badges of trade”: a set of factors weighed together, with no single one being decisive. The main ones are:
- The nature of what was sold
- How long the company owned it
- How often it buys and sells similar things
- Whether it did work on the item to make it more saleable
- The circumstances and the reason behind the sale
- How the purchase was financed
A company that buys and flips properties for profit is trading, so its gains are taxable. A company that sells the shop it has traded from for a decade to move somewhere bigger is realising a capital asset, so that gain is not. The test looks at all the factors in the round, not any one in isolation.
What Your Company Can Deduct
A business expense is tax-deductible only if it meets four conditions set out by IRAS. Get these right and every qualifying dollar of cost reduces your chargeable income.
The four conditions every deductible expense must meet
- It is wholly and exclusively incurred in producing income. Private and personal costs do not qualify.
- It is revenue, not capital, in nature: the day-to-day cost of running the business (rent, utilities, supplies), not the cost of buying a long-term asset.
- It has been incurred, meaning the liability to pay is real, not merely estimated or provisional.
- It is not specifically prohibited from deduction under the Income Tax Act.
Staff salaries pass all four and are deductible. A director’s family holiday charged to the company does not, because it is private. Legal fees to buy a new shop are capital, so they are not deductible either, even though the fees themselves are a real cost.
What is prohibited under Section 15
Section 15 of the Income Tax Act names specific costs that can never be deducted, regardless of the four conditions. Common ones include private car expenses (such as running an S-plated car), and fines and penalties. A late-payment fine from a statutory board, for instance, is not deductible even though the company really did pay it.
Overseas spending and the real cost of FX
Foreign-currency business costs (an overseas supplier invoice, a cloud subscription billed in US dollars, an advertising spend charged in euros) are deductible in the same way as local costs, at the Singapore-dollar amount your company actually paid.
Here is the part worth thinking about: if the card or account you paid with added a foreign exchange markup, that markup inflates the cost you recorded.
A deduction only ever returns your tax rate on the dollar.
At 17%, spending an extra S$1 to claim it back later saves you 17 cents, not the whole dollar. So the bigger lever on overseas costs is not the deduction at all. It is not paying the markup in the first place.
That is where a multi-currency business account earns its place. YouBiz charges real 0% FX fees on card spend across 150+ currencies at the Mastercard wholesale rate, so the cost you record is the true cost. Every transaction also lands cleanly in a statement you can hand to your accountant.
For a fuller breakdown of what overseas payments cost through the banks, see our guide to telegraphic transfers in Singapore.
How to Lower Corporate Tax in Singapore Legally
The most reliable way to reduce corporate tax in Singapore is to claim the reliefs your company is already entitled to. The two exemption schemes below do most of the work, and both are applied automatically when you file correctly.
Start-Up Tax Exemption: up to S$125,000 exempt
The Start-Up Tax Exemption (SUTE) is granted to qualifying new companies for their first three consecutive Years of Assessment. It exempts:
- 75% of the first S$100,000 of normal chargeable income (up to S$75,000 exempt)
- 50% of the next S$100,000 (up to a further S$50,000 exempt)
That is up to S$125,000 of chargeable income shielded from tax each year, for three years running. It’s the single biggest reason a young, profitable Singapore company pays so little in its early life.
Partial Tax Exemption: up to S$102,500 exempt
Once the three start-up years are up, or if your company does not qualify for SUTE, the Partial Tax Exemption (PTE) applies instead. Every company gets it. It exempts:
- 75% of the first S$10,000 of normal chargeable income (up to S$7,500 exempt)
- 50% of the next S$190,000 (up to a further S$95,000 exempt)
That is up to S$102,500 shielded each year, with no time limit.
Who does not qualify for the start-up scheme
SUTE has three conditions. The company must be incorporated in Singapore, be a tax resident here for that YA, and have no more than 20 shareholders throughout the basis period, where all shareholders are individuals, or at least one individual holds at least 10% of the ordinary shares.
Two types of companies are shut out entirely: those whose main activity is investment holding, and those developing property for sale, investment, or both. Companies in either group fall back to the Partial Tax Exemption.
Claim the deductions and allowances you are owed
Beyond the exemption schemes, the ordinary levers still apply: deduct every qualifying business expense (see above), claim capital allowances on equipment and machinery, and carry forward unused losses to offset future profits.
Certain sector and innovation incentives, such as enhanced deductions for qualifying R&D and innovation activities, can go further, though they suit some companies more than others. None of this is exotic. It’s simply making sure your filing reflects what your company is entitled to.
👉 Setting up the spending side? See our guides to the best corporate card in Singapore for SMEs and how to write a company expense policy.
📖 Related reading: keeping clean expense records is what makes these claims painless. Our guide to the best expense management software for Singapore SMEs compares the options.
Who Is Exempt From Corporate Tax?
No profitable Singapore company is fully exempt from corporate tax, but qualifying new companies come close in their early years thanks to the Start-Up Tax Exemption. Beyond that, the exemptions are partial: they shield a slice of income, not all of it.
- Truly dormant companies (those carrying on no business and with no income) do not pay tax, but they may still need to file a return unless IRAS has waived it.
- Charities and certain not-for-profit bodies have their own separate treatment.
- For an ordinary trading company, the honest answer is that you reduce the bill through the schemes above rather than escape it.
How to Calculate Corporate Tax in Singapore: Two Worked Examples
The useful part of corporate tax is the arithmetic, so here are two full calculations, from chargeable income to final tax bill, using the YA 2026 rules.
Example 1: a start-up on S$120,000 chargeable income
A three-year-old Singapore company qualifies for the Start-Up Tax Exemption. Its normal chargeable income for the year is S$120,000.
| Step | Amount |
|---|---|
| Normal chargeable income | S$120,000 |
| Less: 75% exemption on first S$100,000 | – S$75,000 |
| Less: 50% exemption on next S$20,000 | – S$10,000 |
| Chargeable income after exemption | S$35,000 |
| Tax at 17% | S$5,950 |
| Less: 50% CIT Rebate (YA 2026) | – S$2,975 |
| Tax payable | S$2,975 |
On S$120,000 of profit, the company pays S$2,975, an effective rate of under 3%. That is the start-up scheme and the rebate doing their work together.
Example 2: an established company on S$500,000 chargeable income
An older company no longer qualifies for SUTE, so it gets the Partial Tax Exemption. Its normal chargeable income is S$500,000.
| Step | Amount |
|---|---|
| Normal chargeable income | S$500,000 |
| Less: 75% exemption on first S$10,000 | – S$7,500 |
| Less: 50% exemption on next S$190,000 | – S$95,000 |
| Chargeable income after exemption | S$397,500 |
| Tax at 17% | S$67,575 |
| Less: 50% CIT Rebate (YA 2026, within cap) | – S$33,787 |
| Tax payable | S$33,788 |
On S$500,000 of profit, the tax bill lands at S$33,788, an effective rate of about 7%. The rebate here is S$33,787, still under the S$40,000 cap.
⚖️ Both examples ignore the S$2,000 cash grant for simplicity. An eligible employer would net a little more relief, with the grant and rebate together capped at S$40,000. These figures are illustrative; your own numbers depend on your deductions, allowances, and any losses carried forward.
When to File and Pay Corporate Tax in Singapore
Singapore companies face two filing deadlines each year: the Estimated Chargeable Income (ECI) early in the cycle, and the full tax return by 30 November. Payment comes after, once IRAS issues the bill.
ECI: the Deadline Most Companies Overlook
ECI is your company’s estimate of its chargeable income, and it is due within three months of your financial year-end. A company with a 31 December year-end files ECI by 31 March; a 30 September year-end files by 31 December. It is one of the most commonly missed corporate filing requirements, partly because it comes so early and partly because some companies mistake it for the actual return. It is not; it is the estimate that comes first.
Companies can be exempt from filing ECI if annual revenue is not more than S$5,000,000 and the ECI is nil, but check your own position before assuming you qualify.
Form C-S, Form C-S (Lite) and Form C
The full return is filed on one of three forms, by 30 November:
- Form C-S — a simplified return for smaller companies that meet the qualifying conditions
- Form C-S (Lite) — the lightest version, for companies with annual revenue of S$200,000 or below
- Form C — the full return, for companies that do not qualify for the simplified forms
Most SMEs file Form C-S or the Lite version. All three are filed electronically through IRAS’s myTax Portal.
What happens if you file late
Late or non-filing has consequences. IRAS may issue an estimated Notice of Assessment based on its own figures (usually higher than reality), and can impose penalties. For continued non-filing, penalties can reach up to S$5,000, and in serious cases IRAS can take further enforcement action. Filing on time, even with an estimate you later revise, is always cheaper than not filing.
How and When to Pay Your Tax Bill
Once you file, IRAS sends a Notice of Assessment, which is your final tax bill. Payment is due within one month of that date, even if you have filed an objection.
The easiest way to pay is by GIRO, which splits the bill into up to 10 interest-free monthly instalments, and filing your ECI early earns you more instalments. You can also pay by PayNow QR or internet banking.
Miss the deadline and a 5% late-payment penalty applies on the unpaid amount.
Corporate Tax for Foreign Companies
Foreign companies are taxed on their Singapore-sourced income at the same 17% rate. What differs is residency and access to reliefs.
Branches and non-resident companies
A company is tax-resident in Singapore if its control and management are exercised here. A Singapore branch of a foreign parent is generally treated as non-resident, because the strategic decisions are usually made overseas.
Non-resident companies are still taxed on income sourced in Singapore, but they typically cannot claim the Start-Up Tax Exemption and may not access certain treaty benefits. Residency is a facts-based test, so a foreign-owned company that runs from Singapore can still be resident.
The global minimum tax for large groups
Large multinational groups now face a separate layer under the OECD’s global minimum tax rules (BEPS Pillar Two), which set a 15% minimum effective tax rate for in-scope groups with global revenues of at least 750 million EUR.
Singapore has moved to apply a domestic top-up tax so that any shortfall is collected here rather than abroad. This affects only very large multinationals. The overwhelming majority of Singapore SMEs are well outside its scope and continue under the ordinary 17% regime.
Corporate Tax vs the Other Taxes Your Company Pays
Corporate income tax is not the only tax a Singapore company deals with. The main others:
- GST — a 9% tax on most goods and services. Registration is compulsory once your taxable turnover exceeds S$1,000,000, and voluntary below that. GST is separate from income tax and works quite differently.
- Property tax — payable if your company owns property, based on the property’s annual value.
- Stamp duty — payable on certain documents, most commonly the purchase or lease of property and transfers of shares.
- Withholding tax — payable on certain payments to non-residents, such as interest, royalties, and some service fees.
Corporate income tax is the one that catches every profitable trading company, though, which is why it is worth getting right first.
📖 Related reading: sorting out the account your company runs on is step one. See our roundup of the best business account in Singapore for the fee and feature comparison.
FAQs
Singapore’s corporate income tax rate is a flat 17% on chargeable income. There are no brackets and no small-company rate. Most companies pay a lower effective rate once the exemption schemes and the Corporate Income Tax Rebate are applied. A young company under the Start-Up Tax Exemption can pay an effective rate in the low single digits on its first S$200,000 of profit.
No. 25% is not a Singapore rate. It is the headline company tax rate in some other countries, such as the UK, and it often bleeds into Singapore search results. Singapore’s corporate income tax has been a flat 17% for years.
No profitable company is fully exempt, but qualifying new companies get the Start-Up Tax Exemption for their first three Years of Assessment, shielding up to S$125,000 of chargeable income a year. All other companies get the Partial Tax Exemption, worth up to S$102,500 a year. Genuinely dormant companies pay no tax but may still need to file.
Claim what your company is already entitled to: the exemption schemes, every qualifying business deduction, capital allowances on equipment, and any losses carried forward. The exemptions and the rebate are applied automatically when you file correctly, so accurate filing does most of the work. Aggressive schemes are rarely worth the risk.
Two deadlines. Estimated Chargeable Income (ECI) is due within three months of your financial year-end. The full tax return (Form C-S, C-S (Lite), or C) is due by 30 November each year. Both are filed through IRAS’s myTax Portal.
No. Corporate income tax is charged on your company’s profits at 17%. GST is a 9% tax on the goods and services your company sells, and only applies once you are GST-registered. They are separate taxes with separate rules and separate filing.
The Tax Is Fixed. Keep the Rest Clean
Corporate tax in Singapore rewards companies that keep good records and file on time. The rate is fixed, the exemptions are generous, and the rebate is automatic, so most of the work is administrative: accurate numbers, the right form, and the two deadlines met.
That is where the account your business runs on quietly matters. YouBiz gives your company free multi-currency corporate cards, real 0% FX fees on card spend across 150+ currencies, unlimited 1% cashback on eligible spends, and downloadable statements that connect to Xero. So when filing season comes around, your expense data is already clean and categorised, not a shoebox of receipts. It does not file your taxes for you, but it makes the year that feeds them a lot tidier.
Applying takes under five minutes via Singpass, with approval in one to two business days and a virtual Mastercard live in the app straight after.
This guide is general information, not tax advice. Rates, thresholds, and deadlines can change, so confirm your company’s position with IRAS or a qualified tax adviser before filing.
