Setting Up a Business in Singapore

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• Many investors are now turning to Singapore for the establishment of their operations due to various grounds. The ease of operating and setting up a business is a key motivator. Another vital determinant is Singapore’s popular tax regime-famously known for its eye-catching personal and corporate tax rates, lack of capital gains tax, tax relief measures, widespread double tax treaties and one-tier tax system. Brief History of Singapore Taxation Income tax was introduced in Singapore in the year 1947, under the British colonial rule. The Income Tax was later imposed in 1948. This Act was founded on Model Colonial Territories Wages Ordinance that was devised for British colonies during the time. Thus, Singapore’s tax decrees share familiar historical roots with those from Australia, South Africa, Malaysia and New Zealand. Singapore Tax Governing Power Singapore’s Income Tax Act is the governing law involving individual and corporate taxation issues. Previously known as the Inland Revenue Department, Inland Revenue Authority of Singapore or IRAS was founded in the year 1960. It included all key revenue collection organizations in one body that enabled collection and administration processes become better managed and streamlined. This department has made its mark as a service-friendly tax collector and efficient tax administrator too. IRAS is the key department accountable for collecting the different taxes paid to the government. They include property tax, income tax, goods and services tax, stamp duties and betting taxes. As the major tax manager, the department plays a major role in tax policy creation by giving policy inputs and technical implications in every policy. It also actively monitors major developments on external... ... middle of paper ... ... is never imputed to the shareholders. Singapore follows a territorial taxation basis Singapore personal levy rates begin at 0% and are also capped at 20% for citizens and a flat rate of about 15% for non-residents. Singapore has no capital profits tax All personal taxes are paid according to the calendar year, which starts at January 1st and ends at December 31st. Singapore has completed more than fifty bilateral tax treaties to assist resident companies reduce their tax burden too. Singapore’s tax rates have become one of the lowest among all developed countries. This is an attractive feature for outsiders working here. It has also attracted foreign ventures in the country, thereby creating more job opportunities and stabilizing the economy. When compared to other countries in Asia, taxation in Singapore remains relatively fair and favourable for businesses.

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