Common Tax Reliefs For Foreign Investors in Singapore Should Know
If you are a foreign investor in Singapore, you will take it with the good news that there are specific task relief you can take advantage of to help you lower the startup cost. The decision to invest in Singapore will always come with cost considerations, and an opportunity to save some money at the beginning and during the operations of the business should always be embraced. If you are already operating in Singapore or you are planning on setting up shop in the future, here is a look at some of the tax reliefs for foreign investors you should consider-:
Start-up Tax Exemption Scheme
This is a tax exemption scheme designed to support startups and to make it possible for the local enterprises to grow. With this scheme, new startups will enjoy exemptions on the first $100,000 of chargeable income for the first three years of operations. For investors and companies to qualify for this scheme, however, they must meet the following conditions-:
- The startup must have been established with the last three years
- The business must not have more than 20 shareholders during the first three years of operations
- The company or industry must not be involved with property or investment holdings
Partial Tax Exemption
If a company doesn’t qualify for the startup tax exemption scheme, they can still be eligible for the partial tax exemption, and this is another tax relief for foreign investors in Singapore which should never be ignored by the investors. Partial tax exemptions are available for all companies with incomes of up to $300,000. Under this scheme, qualifying companies will get a 75% relief on the first $10,000 of their chargeable income, and another 50% tax exemption on the next $290,000 of their chargeable incomes.
Corporate tax rebates
Corporate tax rebates were introduced in Singapore in 2013, and this is a scheme that will see companies get 30% tax relief for the first three years of operations, also known as years of assessment. The corporate tax rebate, is, however, capped at $30,000. It means that the refund cannot be more than $30,000 per year of assessment.
Expenses incurred before the commencement of a business
You will be pleased to learn that the government of Singapore encourages both citizens to start businesses by offering to cover for them some of the expenses incurred prior to starting a business.
For a foreigner, this can be a great relief, given that starting a business in Singapore doesn’t come cheap, and if you can recover some of the money you used in the initial stages, then you could have more money to fund the operations of the business.
In Singapore, every expense you incur one year prior to the financial year which the business made its first dollar is tax deductible. All you have to do is ensure that you keep all the receipts invoices because you will need them to make claims for the tax exemption.
The other tax relief for foreign investors in Singapore is the Capital Allowances. This is available on all the fixed assets purchased for use in the business or trade. Examples of where such allowances are applicable include expenses on furniture and fixtures, expenses on office equipment, and expenses on electrical and electronic equipment.
Renovation and refurbishment expenses
It is also possible for foreign investors to claim renovation and refurbishment expenses when starting a business in Singapore. This usually is applicable when you have to carry out certain renovation and refurbishments in the premises you intend to operate in, and these may feature flooring and wall covering general electrical installation, and significant repairs amongst others. The deductions here are granted on a straight line basis for a period of three consecutive years of assessment. The deductions are, however, capped to expenditures that are no more than $300,000 for the three year period.