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Singapore Budget 2018: Singapore to restrict tax exemption for start-ups, small firms
THE government will, from the year of assessment 2020, restrict the tax exemption for smaller firms and startups, noting that while the existing tax schemes lower costs for such companies, they do not directly help firms develop capabilities, Finance Minister Heng Swee Keat said on Monday.
This will apply to two tax schemes: the Startup Tax Exemption and the Partial Tax Exemption. The government will restrict the tax exemptions to the first S$200,000 of chargeable income.
For startups, the government will exempt 75 per cent, instead of 100 per cent, of their first S$100,000 of chargeable income from corporate tax.
This still means the corporate tax will remain low for startups and smaller firms, said Mr Heng. For a taxable income of S$100,000, the effective corporate tax rate is 4.3 per cent for startups, and 8.1 per cent for older firms. The headline corporate tax rate in Singapore is 17 per cent.
For more Budget 2018 stories visit bt.sg/budget18