Tax rate and Tax Exemption for FYI 2008

Information on Tax Exemption when preparing tax return and tax planning

Tax rate 2008

From 2008 onwards, the tax rate is 18%

Tax Exemption

The Partial Tax Exemption is enhanced as follows:

 Tax Exemption Scheme for New Start-up Companies (Enhanced)

 Potential tax saving for newly form companies eligible for full tax exemption is $8,640 per year and a total tax saving of $25,380 for three years.

The tax exemption is granted on up to $300,000 of the normal chargeable income (excluding Singapore franked dividends) of a qualifying company, for any of its first three consecutive YAs. The first YA refers to the YA relating to the basis period during which the company is incorporated.

With effect from YA 2009, if at least 10%  of the shares are held by individualm it qualify for full tax exemption. Prior to YA 2009, all the shareholders must be individual. Any company that does not meet the qualifying conditions for any of its first three consecutive YAs would still be eligible for partial tax exemption.

Tax exemption for foreign source income

Foreign-sourced dividends, foreign branch profits and foreign-sourced service income remitted into Singapore on or after 1 June 2003 by a Singapore resident company will be tax exempt if:

  * the tax rate of the foreign country from which income is received from is at least 15% in the year the income is received; and
  * the foreign income had been subjected to tax in the foreign country from which they were received.

We will be pleased to assist you with the services for tax preparation and tax planning

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