Tax Exemptions, Tax Rebates and Tax Reliefs

All companies will receive a corporate income tax rebate of the following:
25% corporate income tax rebate, capped at $15,000 for YA 2020

The rebate will not apply to income derived by a non-resident company that is subject to final withholding tax.

Qualifying companies can enjoy the following for YA 2020 onwards:
75% exemption on the first $10,000 of normal chargeable income;
– A further 50% exemption on the next $190,000 of normal chargeable income;

All companies, including companies limited by guarantee can enjoy PTE, unless they have already claimed the Tax Exemption Scheme for New Start-Up Companies.

Qualifying companies will be given the following tax exemption for the first three consecutive YAs where the YA falls in YA 2020 onwards:
75% exemption on the first $100,000 of normal chargeable income;
– A further 50% exemption on the next $100,000 of normal chargeable income;

The exemption is available only for the first three YAs. From the fourth YA onwards, the company can enjoy the partial tax exemption like all other qualifying companies.

Foreign income earned by a Singapore company may be subject to taxation twice. There are two ways Singapore companies may avoid double taxation.

Double Tax Relief (DTR)
A DTR is the relief provided for under an Avoidance of Double Taxation Agreement (DTA) to reduce double taxation, in the form of a tax credit. It allows Singapore tax residents to claim a credit for the amount of tax paid in the foreign jurisdiction against the Singapore tax that is payable on the same income.

Unilateral Tax Credit (UTC)
Effective YA 2009, a UTC will be granted on all foreign-sourced income received in Singapore by Singapore tax residents from jurisdictions that do not have DTAs with Singapore.

Group relief (GR) enables companies to deduct unutilised capital allowances/ trade losses/ donations of one company from the assessable income of another company in the same group.

GR is a system treats companies in the same group as if they are one single company. 

To qualify, the transferor and claimant must be incorporated in Singapore, belong to the same group and have the same financial year end.
Companies may carry-back unutilised capital allowances (CAs) and trade losses arising in a YA to reduce the amount of taxes payable in an immediately preceding YA.

A company has to meet the substantial shareholding test and same business test in order to qualify for the scheme.

The carry-back system will be available to all businesses, including sole proprietors and partnerships;