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Taxation of a Limited Liability Company in Singapore

Updated on Thursday 13th July 2017

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Taxation-of-a-limited-liability-company-in-SingaporeStarting a business in Singapore has many advantages. From the types of structures available for incorporation to the taxation system it offers, Singapore is one of the best countries in Southeast Asia to do business in according to several reports.

Taking them one by one, in terms of companies which can be established here, the limited liability company is preferred by foreign investors. Secondly, when it comes to taxation, the Singapore limited liability company is also one of the best choices when it comes to the tax exemptions or incentives it is subject to.

Our company formation specialists in Singapore can offer information on the corporate tax imposed in the city-state.

Taxes imposed to limited liability companies in Singapore

The Singapore taxation system comprises various taxes which apply to natural persons and corporations. The limited liability company, no matter if it is a private or a public company, will be subject to the following taxes:

  • -          the corporate tax;
  • -          the goods and services tax;
  • -          withholding taxes applied to interests, dividends and royalties;
  • -          social security contributions;
  • -          the real estate tax;
  • -          the stamp duty.

What should be noticed is that in order to know the amount a limited liability company must pay it must first verify the income which can be taxed and then file the returns based on which the Inland Revenue Authority in Singapore will calculate the taxes the company will pay.

Our Singapore company formation agents can help those interested to register a limited liability company here.

Tax rates applied to limited liability companies in Singapore

The corporate tax which is also the most important tax imposed to a limited liability company in Singapore has a rate of 17%. However, startup companies registered as limited liability companies can benefit from exemptions from the corporate tax.

The other rates the taxes imposed to limited liability companies in Singapore are:

  • -          the GST is applied at a rate of 7%, however there is also a 0% rate available for certain products;
  • -          the withholding tax rates range between 0% and 15% depending on the type of income and who it distributed to;
  • -          the social security contributions have rates ranging between 7.5% and 17%;
  • -          the real estate tax is applied progressively and can reach a rate of 20%.

It should be noted that Singapore has signed numerous double tax treaties which provide for exemptions or deductions for certain taxes paid by foreign investors who open limited liability companies in Singapore. The best example are the withholding taxes.

For full information on the taxation of limited liability companies, please contact our Singapore company formation consultants. We can also help you open a Singapore company.

 

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