Taxation of Branches in Singapore

One of the most employed types of structures by foreign companies establishing a presence in Singapore is the branch office. Compared to the subsidiary, the branch office is a dependent entity, which means the parent company is responsible for the decisions related to the activities of the branch opened in Singapore.

When it comes to taxation, the branch office is not considered a tax resident company because management of the business is not located in Singapore. Below, our Singapore company formation specialists explain how branches are taxed in the city-state.

The corporate tax applied to branch offices in Singapore

Before opening a branch office in Singapore, you should know that this business form is taxed at the standard corporate tax rate in Singapore which is 17%. However, compared to the companies registered in Singapore, branch offices will not benefit from any tax incentives because they are considered non-tax residents.

Since the management of the branch office is located outside Singapore, it will be the parent-company’s responsibility to appoint a local agent who is in contact with the authorities in the city-state in related to the payment of taxes.

Our specialists in opening companies in Singapore can assist foreign companies interested in opening a branch office in the city-state.

Accounting requirements for Singapore branches

Even if a Singapore branch office is not required to file the same accounting documents as a local one, it still has certain tax obligations to fulfill. The parent company must send to its Singapore branch the following documents:

• -          copies of the financial accounts for the year of assessment;
• -          documents related to the financial accounts filed with the tax authorities in the country of origin of the branch office.

The documents must be sent no later than 2 months after the annual general meeting of the parent company. The branch must also file an ECI form which represent the income generated by it in Singapore. Also, the Singapore branch office must have its accounts audited by accountants in the city-state.

The documents mentioned above together with audited accounts of the Singapore branch must be submitted with ACRA.

For full information related to the taxation of branches in the city-state, please feel free to contact our Singapore company formation consultants.