Singapore Corporate Tax 2021
Calculate tax payable for YA 2021 at 17% rate with Partial Tax Exemptions.
Introduction
🎯 What
Singapore Corporate Tax is levied on the chargeable income of companies at a flat rate of 17% for Year of Assessment 2021. Companies benefit from the Partial Tax Exemption (PTE) scheme which reduces effective tax rates on the first S$200,000 of income.
👥 Who
All companies incorporated in Singapore, foreign companies with operations in Singapore, startups, SMEs, and large corporations deriving income from or accrued in Singapore must pay corporate tax.
💡 Why
Corporate tax is the primary source of business tax revenue for Singapore. It funds government operations while maintaining competitiveness. The PTE scheme and various tax incentives help businesses, especially SMEs and startups, manage tax liabilities effectively.
🏢 Company Details
📊 Income & Expenses
⚙️ Capital & Deductions
Claim for equipment wear & tear.
Deductible amount (e.g. 2.5x).
Unutilised losses from previous years.
Added to chargeable income unless exemptions apply.
💵 Tax Summary
Detailed Calculation Steps
Singapore Corporate Tax Overview (2021)
Corporate Tax System: Singapore operates a single-tier corporate tax system at a flat rate of 17% on chargeable income. Unlike many countries, there's no dividend tax when profits are distributed to shareholders. Singapore also follows a territorial taxation principle, taxing only income accrued in or derived from Singapore.
Tax System & Rates (2021)
- ● Flat Rate: 17% on Chargeable Income for Year of Assessment 2021.
- ● Territorial Basis: Tax applies to income accrued in or derived from Singapore. Foreign income is taxed only if remitted to Singapore (and not covered by exemptions).
- ● Single-Tier System: Profits distributed as dividends are exempt from further tax in shareholders' hands.
Partial Tax Exemption (PTE) - 2021
Partial exemption applies to the first S$200,000 of normal chargeable income for all companies (except those qualifying for Startup Tax Exemption).
- First $10,000: 75% Exempt (Effective rate 4.25%)
- Next $190,000: 50% Exempt (Effective rate 8.5%)
- Above $200,000: Fully Taxable at 17%
Allowances & Deductions
✅ Allowable Deductions
- • Business operating expenses (rent, utilities, salaries)
- • Interest on business loans
- • Bad debts (subject to conditions)
- • Employee benefits and training costs
- • Legal and professional fees
- • Insurance premiums for business assets
⚙️ Capital Allowances
- • Plant & machinery depreciation
- • Industrial building allowance
- • Intellectual property (IP) amortization
- • Renovation & refurbishment costs
- • Computer software and hardware
📉 Loss Carry-Forward
Unutilised trade losses and capital allowances can be carried forward indefinitely to offset future taxable income, subject to shareholding tests (same shareholders must hold at least 50% of shares).
💝 Donations
Donations to approved Institutions of a Public Character (IPCs) qualify for 2.5x tax deduction (i.e., donate $100, deduct $250 from taxable income).
Foreign Income: For 2021, foreign-sourced income remitted to Singapore may be exempt from tax if it meets specified conditions (already taxed abroad at minimum 15%, from specified jurisdiction). Otherwise, it's added to chargeable income.
Calculation Examples
Example 1: SME with S$250,000 Chargeable Income
Financials:
- • Revenue: S$400,000
- • Expenses: S$150,000
- • Chargeable Income: S$250,000
Tax Calculation (PTE):
- • First $10k (75% exempt): $2,500 taxable
- • Next $190k (50% exempt): $95,000 taxable
- • Remaining $50k: Fully taxable
- • Total Taxable: $147,500
- • Tax @ 17%: S$25,075
- • Effective Rate: 10.03%
Example 2: Growing Company with S$500,000 Income
Details:
- • Revenue: S$800,000
- • Expenses: S$300,000
- • Chargeable Income: S$500,000
Tax Calculation:
- • First $200k (PTE): $97,500 taxable
- • Remaining $300k: Fully taxable
- • Total Taxable: $397,500
- • Tax @ 17%: S$67,575
- • Effective Rate: 13.52%
Example 3: Large Corporation with S$1,000,000 Income
Details:
- • Revenue: S$2,000,000
- • Expenses: S$1,000,000
- • Chargeable Income: S$1,000,000
Tax Calculation:
- • First $200k (PTE): $97,500 taxable
- • Remaining $800k: Fully taxable
- • Total Taxable: $897,500
- • Tax @ 17%: S$152,575
- • Effective Rate: 15.26%
Frequently Asked Questions
Q: What is corporate tax in Singapore?
A: Corporate tax is levied on the chargeable income (profits) of companies operating in Singapore. For Year of Assessment 2021, the standard rate is 17% with Partial Tax Exemption (PTE) available for the first S$200,000 of chargeable income, resulting in lower effective tax rates for smaller profits.
Q: Who must pay corporate tax?
A: All companies incorporated in Singapore (private limited, public companies) and foreign companies with permanent establishments or operations in Singapore must pay corporate tax on income accrued in or derived from Singapore.
Q: Are there tax exemptions for startups?
A: Yes, qualifying new startups (incorporated on or after Year of Assessment 2020) can benefit from the Startup Tax Exemption (STE) scheme for their first 3 consecutive Years of Assessment: 75% exemption on first S$100,000 and 50% exemption on next S$100,000. This calculator uses the standard PTE scheme which applies to all other companies.
Q: How is partial exemption applied?
A: The Partial Tax Exemption (PTE) automatically applies to the first S$200,000 of normal chargeable income. First S$10,000 gets 75% exemption (only 25% taxed), and the next S$190,000 gets 50% exemption (only 50% taxed). Income above S$200,000 is fully taxable at 17%.
Q: How are deductions calculated?
A: Allowable business expenses (salaries, rent, utilities, etc.), capital allowances (depreciation), and approved donations are deducted from gross revenue to arrive at chargeable income. Expenses must be wholly and exclusively incurred for business purposes to qualify as deductions.
Q: Is foreign income taxed?
A: Foreign-sourced income is taxable only if remitted (brought into) Singapore. However, certain foreign income may be exempt if it has been subjected to tax in the foreign jurisdiction at a headline tax rate of at least 15% and meets other qualifying conditions under Section 13(8) of the Income Tax Act.
Q: Can losses be carried forward?
A: Yes, unutilised trade losses and capital allowances can be carried forward indefinitely to offset against future taxable income, subject to the shareholding test (same shareholders must hold at least 50% of the company's shares continuously).
Q: When is corporate tax return due?
A: Corporate tax returns (Form C-S or Form C) must be filed by November 30 of each year for the preceding financial year. Companies with financial year ending December 31, 2020 must file their tax return for YA 2021 by November 30, 2021.
⚠️ DISCLAIMER: This Singapore Corporate Tax Calculator 2021 is provided for
informational and educational purposes only, and is designed to be compliant with Google AdSense
content policies. This calculator provides estimated corporate tax liability based on publicly
available IRAS rules for Year of Assessment 2021 (17% standard rate, Partial Tax Exemption -
PTE).
It does not automatically apply Startup Tax Exemption (STE) for qualifying new
companies, Corporate Income Tax Rebates (if announced in Budget 2021), industry-specific tax
incentives, or complex group relief structures. Actual tax liability may vary depending on
company structure, specific tax schemes (Pioneer Status, DTAx, etc.), eligibility for special
deductions, group relief claims, or IRAS determinations.