Print this page

ONE TIER TAX SYSTEM

With effective from 1 January 2008, all company will be on a one tier tax system.

All dividends payable by companies in Singapore would be exempt from tax in the hands of shareholders;
All corporate shareholders receiving dividends paid by companies in Singapore can onward pay the dividends to their shareholders with no restriction on the shareholding and number of tiers for which such dividends can be flowed through;
All companies in Singapore are not required to maintain Section 44 accounts; unlike previously under the imputation system
All section 44 charge not utilised by 31st December 2007 would not be available for set-off against any tax assessed on or after 1st January 2008; and
All tax discharged after 31st December 2007 under the one tier tax system (net of any tax due to the Comptroller of Income Tax) may be refunded to companies at the point of tax discharge without the need to refer to companies’ section 44 balances as at 31 December 2002.

Dividends under the one tier tax sytem is tax exempt unlike the previous imputation system. It may benefit those who have a higher income to declare dividends.

Bookmark this page
Delicious Digg Facebook Stumbleupon