Understanding General Corporate Income Tax Rules in Singapore: A Guide for Businesses

19 May 2025

Editor: ET

Staying informed about Singapore’s corporate income tax rules isn’t just about ticking boxes for compliance — it’s about building a resilient, efficient business.

Singapore's business-friendly tax regime is one of the key reasons why the country remains a leading hub for global investment. At the heart of this system is the Corporate Income Tax (CIT) — a flat and transparent model designed to support enterprise growth. Whether you're running a local startup or managing a branch of a foreign company, understanding the core rules of corporate taxation is essential to staying compliant and financially efficient.

In collaboration with corporate service providers like Expede Tech Pte Ltd, Singapore-based companies can gain clarity and confidence when navigating their annual tax responsibilities.

Further Reading: New CSP Act 2024: What Singapore Businesses Need to Know Before 9 June 2025

What Is Considered a Company Under Singapore Tax Law?

According to the Income Tax Act, a "company" includes:

• Entities incorporated or registered under the Companies Act 1967 in Singapore (e.g., “Pte Ltd” or “Ltd” companies)

• Foreign companies with registered branches operating in Singapore

• Foreign-incorporated entities without a Singapore branch (subject to local taxation when income is sourced or received here)

Note: Sole-proprietorships and partnerships are not regarded as companies and are taxed under personal income tax rules instead.

Basis Period and Year of Assessment (YA)

Corporate income tax in Singapore is assessed on a preceding year basis. This means:

• Income earned in Financial Year (FY) 2024 will be assessed in Year of Assessment (YA) 2025

• The basis period refers to the 12-month financial period preceding the YA

For example, if your company’s financial year ends on 31 December 2024, then YA 2025 will cover the period from 1 Jan 2024 to 31 Dec 2024.

What Is the Corporate Income Tax Rate?

Singapore adopts a flat corporate income tax rate of 17% on chargeable income. This rate is consistent across local and foreign companies.

While the headline rate is 17%, many companies enjoy tax exemptions and rebates — particularly start-ups in their first three YAs — effectively lowering their payable tax.

Defining Chargeable Income

Chargeable income is the net income after allowable deductions such as:

• Business expenses (e.g., employee wages, office rent, utilities)

• Capital allowances for qualifying fixed assets

• Unutilised losses and donations

• Approved tax exemptions or rebates

Accurately determining chargeable income ensures you don’t overpay or underreport, both of which can trigger penalties or lost savings. Expede helps businesses track, record, and claim relevant deductions while remaining compliant with IRAS requirements.

Compliance and Strategic Planning with Expede

As regulatory updates evolve, so do the risks and opportunities for companies in Singapore. Partnering with a knowledgeable corporate advisor like Expede Tech Pte Ltd ensures that your business is not only compliant, but also positioned to optimise tax benefits legally and ethically.

Further Reading: The Role of Corporate Secretaries in Managing Annual General Meetings (AGMs)

Expede offers services such as:

• Corporate tax planning and filing

• Compliance support for Year of Assessment deadlines

• Strategic structuring to maximise tax efficiency

Staying informed about Singapore’s corporate income tax rules isn’t just about ticking boxes for compliance — it’s about building a resilient, efficient business. With the right guidance and smart planning, your company can thrive in a tax-friendly environment while meeting every legal requirement.