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Reasons To Consider Singapore For Business

Jan 27

Tax Benefits Of Singapore Businesses

In addition to the low taxation rate, Singapore also has a host of tax incentives and other incentive plans which aim to help businesses grow. Some examples are as follows:

 

1) Inland Revenue Authority Of Singapore (IRAS) offers a tax deduction on profits earned from R&D activities undertaken in Singapore.

 

2) The Productivity and Innovation Credit (PIC) Scheme provides tax deductions for companies which purchase certain key equipment, facilities and services.

 

3) The Investment Allowance assists newly-established businesses by reimbursing them for any additional costs incurred in setting up their new premises. Businesses may also be entitled to allowances if they relocate within Singapore.

 

 

4) There are tax exemptions for foreign companies that set up regional headquarters or other support facilities in Singapore.

 

5) As part of the Economic Restructuring Agreement, businesses can restructure their operations without having to pay capital gains taxes. This applies to active business restructuring.

 

6) The Board Of Investment (BOI) has introduced the International Competitiveness and Enterprise Development Scheme (ICED) to help companies relocate to Singapore. This scheme provides tax breaks for up to three years.

 

7) The Site Licence Scheme is available to companies that must establish facilities in certain areas, such as airports or harbors. Under the programme, businesses are not required to purchase the land from the state. Instead, businesses may be given a site licence to use the land for a limited period of time.

 

8) The Export Incentives Scheme provides tax deductions and allowances to export-oriented companies. These incentives are available to companies that have successfully achieved certain export targets or brought in new facilities, plant or machinery into Singapore.

 

9) The Enterprise Investment Scheme (EIS) is a tax relief scheme which provides tax deductions for investments in local and international companies that are carrying out activities in Singapore. This incentive includes investments into unlisted securities of both foreign and local companies, known as "Singapore-incorporated Foreign Companies".

 

10) There is no Minimum Alternate Tax (MAT).

 

11) There are tax exemptions for foreign companies that set up regional headquarters or other support facilities in Singapore.

 

Finally, the government also offers various business start-up grants and subsidies to help new businesses get off the ground. Some of these include:

1) Government Loan Scheme (GLS)

 

2) Productivity and Innovation Credit (PIC) Scheme

 

3) Investment Allowance

 

4) Management Buyout Assistance Programme (BIG-MAP). BIG-MAP offers financial assistance to management or employees of existing companies who wish to acquire these companies.

 

5) Tax deduction for start-up expenses. Up to 75% of expenses are deductible in the year they are incurred.

 

6) Enhanced Capital Allowances (ECA) is a tax deduction which allows companies to claim up to 150% of their capital expenditure as an allowance for income tax purposes.

 

7) The Productivity Grant reduces costs for companies that boost productivity through investment in technology and skills training.

 

8) The Productivity and Innovation Credit (PIC) Scheme provides tax deductions for companies that purchase certain key equipment, facilities and services.

 

9) Additional allowances are available to SMEs with a turnover of less than S$100 million per annum through the Enterprise Investment Scheme (EIS). Under this scheme, investors are entitled to tax deductions on investments made into local and foreign enterprises.

 

10) The Venture Capital Scheme (VCS) is available for start-ups with innovative technology products, which are incorporated as Singapore-incorporated companies. Eligible start-ups can receive up to S$2 million in funding from venture capitalists under this scheme.

 

11) The Singapore Technologies Linkage Scheme (STiLS). Under this scheme, companies can apply for up to S$5 million in funding from the Technology and Innovation Voucher when they collaborate with a research institution or higher learning institution.

 

12) The Interactive Digital Media (IDM) Incentive is targeted at companies that develop and commercialise interactive digital media applications. Eligible companies can receive a cash payout of up to 70% of development costs through this scheme.

 

13) The Market Development Fund (MDF). Under the MDF, companies may apply for funding from the Singapore Industrial Automation Programme (SIAP) to overcome specific market barriers.

 

14) The Productivity and Innovation Credit (PIC) Scheme provides tax deductions for companies that purchase certain key equipment, facilities and services.

15) Enhanced Capital Allowances (ECA). ECA is a tax deduction which allows companies to claim up to 150% of their capital expenditure as an allowance for income tax purposes.