What is the Domestic Top-up Tax and Multinational Enterprise Top-up Tax?

From financial years starting on or after 1 January 2025, in-scope MNE groups are subject to a 15% minimum effective tax in Singapore via DTT and MTT.

Does the 15% minimum change the 17% statutory rate?

No. The statutory rate remains 17%. The DTT and MTT operate as top-up taxes for large MNE groups.

Is there a corporate tax rebate for YA 2025?

Yes. A 50% CIT rebate capped at SGD 40,000 applies for YA 2025 and is computed automatically.

Within 3 months from financial year end unless the waiver applies (annual revenue ≤ SGD 5 million and ECI is nil).

What annual returns must be filed?

Companies must file Form C-S, Form C-S (Lite), or Form C for each Year of Assessment by the IRAS filing deadline.

Do dormant companies have to file?

Dormant companies may use simplified filing for the relevant YA, but should check IRAS conditions before relying on any concession.

What are the consequences of late or non-filing of ECI?

IRAS may issue an estimated assessment. Taxes may become immediately payable and penalties can apply.

How do tax treaties affect withholding and double taxation?

Treaties may reduce withholding tax and provide relief from double taxation, subject to eligibility and certificate of residence.

How is a company’s tax residence determined?

By where control and management are exercised (e.g., where key board decisions are made).

Understanding Singapore corporate tax

Q: What is the corporate income tax rate in Singapore?

The corporate income tax rate is 17% on chargeable income. Effective tax may be lower due to exemptions and reliefs.

Q: Who qualifies for the start-up exemption?

A Singapore tax-resident company with ≤20 shareholders and at least one individual holding ≥10% ordinary shares, excluding investment holding and property development companies, for the first three consecutive Years of Assessment.

by KNOWLEDGE CENTER | Jan 22, 2023 | Corporate Structuring

Foreign investors and international entrepreneurs understand Singapore corporate taxes – Luxembourg

A low headline tax rate, generous tax exemption, and a host of other tax schemes and incentives are some of the reasons for incorporating a company in Singapore.

Also, the Singapore government‘s effort to sign Double Taxation Agreements with several other countries has made it possible to register a company in Singapore and expand globally without the obligation of paying extra taxes on foreign-sourced income.

To make Singapore more attractive for investment, income tax rates in this country have been going down consistently.

Currently, the corporate income in Singapore is imposed at a flat rate of 17% (with an effective tax rate frequently lower due to several tax incentives and tax exemptions available in Singapore). This applies to both local and foreign companies in Singapore.

The single-tier income tax system in Singapore

To make the country more attractive for investors, Singapore adopts a one-tier taxation system, in which all dividends paid by Singapore-resident companies are tax-exempt in the shareholder’s hands.

General tax incentives in Singapore

Once the tax exemptions stated below are applied to the taxable income, the income tax rate for most Singapore companies will be reduced significantly.

Tax exemption scheme for new start-ups in Singapore

A partial tax exemption plus a three-year start-up tax exemption for qualifying start-up companies are available in Singapore.

The qualifying conditions are for the company to be incorporated as being tax resident in Singapore. Also, the company must not possess more than 20 shareholders with at least one of the shareholders being an individual shareholder holding a minimum of 10% of ordinary shares.

Note that this start-up exemption is not available to property development and investment holding companies in Singapore.

Partial tax exemption (PTE) scheme for companies in Singapore

All companies in Singapore qualify for PTE unless the company already claims under the tax exemption scheme for new startups. Under the Singapore PTE, companies enjoy a 75% tax exemption on the first $10,000 of normal chargeable income and a 50% tax exemption on the next $190,000 of normal chargeable income.

Tax exemption for foreign-sourced income in Singapore

Specific types of foreign-sourced income are tax-exempt. These include foreign-sourced dividends, foreign branch profits, and foreign-sourced service income.

Withholding tax in Singapore

The withholding tax doesn’t apply to Singapore resident companies or individuals.

In addition to the general tax incentives listed above, there are specific industry and special purpose income tax incentives and concessionary tax rates offered under the Singapore Income Tax Act.

Tax return filing in Singapore

A company’s chargeable income is asserted in its Corporate Income Tax Returns (Estimated Chargeable Income (ECI) and Form C). And the due date for corporate tax filing for Singapore companies is 30 November for hard copy forms, and 15 December for electronic filing.

To finalize corporate tax returns, a company must submit the filings with the Inland Revenue Authority of Singapore (IRAS).

In Singapore, corporate income is evaluated on a preceding-year basis.

Tax residency in Singapore

A company established in Singapore is not automatically considered a tax resident of the country. In order to be considered a tax resident of Singapore, the company must be controlled and managed from the country.

Also, a company is considered a non-resident of Singapore if board meetings and pivotal management personnel are situated outside of the country.

The benefits of being a tax resident in Singapore

Companies with Singapore tax residency enjoy the benefits provided under Avoidance of Double Taxation Agreements (DTAs), tax exemption on foreign-sourced dividends and service income, and foreign branch profits. Also, a Singapore tax residency enjoys tax exemption as a new startup.

Singapore tax treaties

Singapore has signed Avoidance of Double Taxation Agreements (DTAs) with over 80 jurisdictions. These DTAs reduce or eradicate taxes on foreign income that has already been taxed in a foreign jurisdiction. This has further asserted Singapore as one of the most ideal countries in the world to do business.

And for non-treaty countries, a unilateral tax credit is given concerning the foreign tax on all foreign-sourced income. With respect to the new policy, all companies in Singapore that earned income from countries that don’t have a double tax agreement with Singapore will be permitted a tax credit on their foreign-sourced income from those countries.

Do you want to establish a business in Singapore and benefit from these tax incentives? – Let’s go ahead and contact your Damalion experts now.

Understanding Singapore corporate tax in 2025 — core rate, start-up and partial exemptions, Pillar Two (15% minimum for large groups), filing duties, and practical points for investors and entrepreneurs

For entrepreneurs, family offices, private equity, venture capital, and international groups • This page is general information only. Always obtain independent Singapore tax advice.

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Quick overview

Corporate income in Singapore is taxed at a flat 17%. Effective tax can be lower due to the partial tax exemption (PTE) and the start-up exemption for qualifying new companies. From financial years starting on or after 1 January 2025, large multinational enterprise (MNE) groups are subject to a 15% minimum effective tax in Singapore through the Domestic Top-up Tax (DTT) and the Multinational Enterprise Top-up Tax (MTT). Filing duties include Estimated Chargeable Income (ECI) within three months after financial year end (unless waiver conditions are met) and annual Form C-S/C-S (Lite)/C by the statutory deadline.

Headline rate and common exemptions

Topic	Key points
Corporate Income Tax (CIT)	Flat 17% on chargeable income.
Partial Tax Exemption (PTE)	75% exemption on the first SGD 10,000 of normal chargeable income and 50% exemption on the next SGD 190,000. Applies to most companies.
Start-up exemption (first 3 YAs)	Enhanced relief for qualifying new companies during the first three consecutive Years of Assessment (YAs), subject to conditions. Investment holding and property development companies do not qualify.
Dividends	Singapore follows a one-tier system. Dividends paid by Singapore-resident companies are tax-exempt in shareholders’ hands.
Foreign-sourced income	Specific foreign-sourced dividends, branch profits, and service income may be exempt when received in Singapore if statutory conditions are met.
Withholding taxes	Apply on certain Singapore-sourced payments (e.g., interest, royalties, service fees to non-residents). No WHT on dividends.
Pillar Two (large MNEs)	DTT/MTT top up the group’s effective tax rate in Singapore to 15% for in-scope MNE groups (revenue ≥ EUR 750 million in at least two of the four preceding financial years) for financial years starting on/after 1 Jan 2025.
YA 2025 CIT rebate	For YA 2025, a 50% CIT rebate applies, capped at SGD 40,000 per company. It is computed automatically in the assessment.

Compliance timeline

ECI: File within 3 months after the end of the financial year, unless you meet the waiver (annual revenue ≤ SGD 5 million and ECI is nil).
Annual return: File Form C-S, Form C-S (Lite), or Form C by the deadline for the relevant YA.
Payment: Taxes are due within 1 month from the Notice of Assessment. Monthly GIRO instalments are available when conditions are met.
Books and records: Maintain proper records and tax computations to support returns and any claims.

Frequently asked questions

1) What is the corporate income tax rate in Singapore?

The rate is 17% on chargeable income. Effective tax may be lower where reliefs and exemptions apply.

2) How does the one-tier dividend system work?

Corporate profits are taxed at the company level. Dividends paid by a Singapore-resident company are exempt from further tax in shareholders’ hands.

3) Who qualifies for the start-up exemption?

A qualifying new company that is Singapore-tax-resident, with no more than 20 shareholders and at least one individual holding ≥10% of ordinary shares. Investment holding and property development companies are excluded. The relief applies for the first three consecutive YAs.

4) How does the partial tax exemption (PTE) work?

75% exemption on the first SGD 10,000 of normal chargeable income and 50% on the next SGD 190,000. Applies where the start-up exemption is not claimed.

5) What is the scope of the Domestic Top-up Tax (DTT) and Multinational Enterprise Top-up Tax (MTT)?

They implement a 15% minimum effective tax for in-scope MNE groups (revenue ≥ EUR 750 million in at least two of the previous four financial years) for financial years starting on or after 1 January 2025. A top-up tax may be payable if the group’s effective tax rate in Singapore is below 15%.

6) Does the 15% minimum tax change the statutory 17% rate?

No. The statutory CIT rate remains 17%. The DTT/MTT operate as top-up mechanisms to bring the effective rate to at least 15% for in-scope MNEs.

7) Is there a corporate income tax rebate for YA 2025?

Yes. For YA 2025, a 50% rebate of the corporate tax payable applies, capped at SGD 40,000 per company. IRAS computes it automatically in the assessment.

8) When must ECI be filed?

Within 3 months after the end of the financial year unless the waiver applies (annual revenue ≤ SGD 5 million and ECI is nil). If revenue exceeds SGD 5 million and ECI is nil, filing is still required.

9) What is the annual filing obligation?

Companies must file Form C-S, Form C-S (Lite), or Form C for each YA by the IRAS deadline. Filing is required even if the company is making losses, unless specific administrative concessions apply (e.g., dormant simplified filing).

10) How are foreign-sourced dividends, branch profits, and service income treated?

They may be exempt when received in Singapore if statutory conditions are satisfied (e.g., the income was subject to tax in the foreign jurisdiction and the headline tax rate condition is met).

11) Do Singapore companies with no activity still need to file?

Yes, filing duties generally remain. A dormant company may be eligible for simplified filing for the YA concerned. Check IRAS rules for dormancy.

12) Are dividends subject to withholding tax?

No. Singapore does not impose withholding tax on dividends.

13) Which outbound payments to non-residents may attract withholding tax?

Examples include certain interest, royalties, and service payments deemed to be sourced in Singapore, subject to domestic law and any applicable tax treaty.

14) What is the ECI waiver?

If both are met: annual revenue ≤ SGD 5 million and ECI is nil for the YA, ECI filing is not required for that YA.

15) What happens if ECI is not filed on time?

IRAS may issue an estimated Notice of Assessment. Payment is generally due within 1 month, and instalments may not be available. Penalties can apply for late payment or non-payment.

16) Can companies pay corporate tax by instalments?

Yes, via GIRO, where conditions are met. The number of instalments depends on how early the ECI is filed after the financial year end.

17) How do tax treaties affect withholding tax and double taxation?

Singapore has many Avoidance of Double Taxation Agreements (DTAs). Treaty provisions may reduce withholding tax rates and provide relief from double taxation, subject to conditions and certificate of residence procedures.

18) Does Singapore tax capital gains?

Singapore does not have a separate capital gains tax. However, gains that are revenue in nature (e.g., trading gains) may be taxable based on facts.

19) How is tax residence determined for companies?

By where the company is controlled and managed (often, where the board of directors makes key decisions). Incorporation in Singapore alone does not guarantee tax residence.

20) What records should be kept?

Proper accounting records, supporting documents, and tax computations should be kept for prescribed retention periods to substantiate the return and any claims.