SINGAPORE Law and Practice Contributed by: Sim Bock Eng, Josephine Choo, Aw Wen Ni and Vincent Ho, WongPartnership LLP
WongPartnership LLP 12 Marina Boulevard Level 28 Marina Bay Financial Centre Tower 3 Singapore 018982 Tel: +65 6416 8000 Fax: +65 6532 5722 Email: contactus@wongpartnership.com Web: www.wongpartnership.com
1. Tax 1.1 Tax Regimes
Singapore is party to 98 comprehensive tax treaties, covering all types of income tax, which serve to relieve double taxation of income. There are also eight limited tax treaties covering shipping and/or air transport for jurisdictions such as the USA, Brazil and Hong Kong. A corporation, whether tax resident or not, is sub - ject to income tax in Singapore for any income that is accrued in or derived from Singapore, or that is received in Singapore from outside Singapore. The income tax for companies is currently a flat rate of 17%. There are various tax exemptions available, including for new start-up companies incorporated in Singapore, and corporate tax incentives to encourage businesses to upgrade their capabilities and expand the scope of their operations in Singapore. The Multinational Enterprise (Minimum Tax) Act 2024 (MMT Act) was enacted to implement the Global Anti Base Erosion Model Rules (Pillar 2) relating to the top- up tax under the Income Inclusion Rule (IIR) (GloBE Model Rules) and to make provision for a domestic minimum top‑up tax (DTT) within the meaning of the GloBE Model Rules. A minimum effective tax rate of 15% is imposed on a relevant multinational enterprise (MNE) group’s profits for financial years starting on or after 1 January 2025. The MMT Act applies to an MNE group for the finan - cial year beginning on or after 1 January 2025 if its consolidated group revenue (determined by reference to the consolidated financial statements of its ultimate parent entity) for at least two out of the four financial years immediately before that financial year is equal to or exceeds the revenue threshold of EUR750 million.
Singapore has a relatively straightforward tax regime. Income tax is chargeable on income accrued in or derived from Singapore, or received in Singapore from outside Singapore. Foreign-sourced income received by individuals in Singapore is exempt from Singapore income tax. Income derived from investments, such as interest from debt securities and qualifying distribu - tions from REITs by individuals, is also exempt from Singapore income tax. Singapore has a preceding year basis of taxation – ie, income earned in 2025 is taxed in the year of assess - ment 2026. A resident individual taxpayer is taxed at a graduated margin tax rate depending on the quan - tum of chargeable income. The top marginal personal income tax rate is 24% for the amount of chargeable income in excess of SGD1 million. There are various income tax incentive schemes that can be utilised to effectively reduce the income tax payable. These include the schemes under: • Section 13F of the Income Tax Act 1947 (ITA) for foreign trusts; • Section 13N of the ITA for prescribed locally administered trusts; and • Sections 13O, 13OA, 13D and 13U of the ITA for funds. These tax incentives are often utilised in wealth and succession planning for high net worth individuals.
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