SINGAPORE Trends and Developments Contributed by: Lee Woon Shiu and Cheung Kuan Swan (Catherine), DBS Private Bank
Singapore as a Tax and Wealth Hub: Incentives, Transparency and New Global Rules Introduction Singapore is widely known for its efficient and sim - ple tax system, making it an attractive global hub for businesses around the world. Like many jurisdictions, Singapore’s tax landscape is continuously evolving, driven by global economic shifts, international tax initiatives and domestic policy objectives which are aimed at fostering sustainable growth and maintaining a competitive edge. Governments around the world are strengthening cross-border collaboration and information exchange to combat tax evasion, while the surge in digital busi - ness models challenges conventional tax systems and calls for new rules to address digital profits. This shift is driven by a variety of influential factors, including regulatory initiatives like the OECD’s Pil - lar Two framework which mandates minimum global corporate tax rates and reduces opportunities for profit shifting. This also means rising expectations for greater tax transparency, heightened scrutiny and sustained competitiveness globally. As Singapore is committed to upholding robust gov - ernance and international best practices, the authority has intensified its efforts in recent years to modern - ise tax compliance systems in response to economic volatility and ongoing fiscal demands. These efforts ensure that businesses operating in Singapore remain competitive while maintaining rigorous transparency standards. Singapore’s tax regime Singapore’s tax policy, characterised by its adapt - ability to global challenges while maintaining com - petitiveness, is shaped by relevant case law and tar - geted incentives that continue to play a pivotal role in
In the Budget 2025, a 50% CIT rebate was extended for the year of assessment 2025, with eligible compa - nies being able to receive a minimum of SGD2,000 (up to a maximum of SGD40,000) through a Rebate Cash Grant if they employed at least one local employee in 2024. An adjustment was made to this CIT rebate in the Budget 2026 where the government introduced a CIT rebate of 40% for the year of assessment 2026, capped at SGD30,000 per company. This is applicable to all active taxpaying companies, whether they are tax resident or non-resident in Singapore, provided they meet the criteria. Foreign companies with tax - able income in Singapore are included so long as they employed at least one local employee in calendar year 2025, in which case they will receive a minimum cash grant of SGD1,500 that will be disbursed from the sec - ond quarter of 2026. Personal income tax (PIT) Singapore continues to operate a progressive PIT system. For the year of assessment (YA) 2026, the tax rates remain consistent with those from YA 2024 onwards, with the highest PIT at 24%. Chargeable income between SGD500,000 and SGD1 million is taxed at 23% and income exceeding SGD1 million is taxed at 24%. A non-resident’s employment income is taxed at a flat rate of 15% or the progressive resident rates, which - ever yields a higher tax amount. However, a flat rate of 24% will apply to a non-resident individual’s income that is derived from employment such as director’s fees, consultation fees and rental income. Non-res - ident individuals who are in short-term employment working in Singapore for 60 days or less in a calen - dar year, can be exempt from income tax if certain criteria and specific conditions are met (the “60-Day Rule Exemption”). The duration of 60 days or less in a calendar year includes weekends and public holi - days within the work period. To qualify for the 60-Day Rule Exemption, the non-resident individual must not be earning income as a director, public entertainer, or professional exercising a vocation. The employment must be with a foreign employer who is not a resi - dent of Singapore and that the income is not borne by a permanent establishment or a fixed base that the employer has in Singapore.
strengthening the economy. Corporate income tax (CIT)
The corporate income tax rate in Singapore is a flat 17% for both local and foreign companies. However, the actual effective tax rate can be lower due to vari - ous incentives and rebates.
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