Which Singapore corporate tax rebates are important in 2024?

This guide to the corporate tax rebates in Singapore announced for the year of assessment 2024 covers all you need to know. In Budget 2024, it was announced that the Singapore government would extend various incentives and rebates to businesses, to encourage growth and productivity improvements, in the face of inflationary pressures and rising costs. While Singapore’s flat 17% corporate tax rate is still extremely competitive on a global scale, the intention is to drive positive change in businesses to accelerate growth and real income improvements in the face of rising costs¹.

This guide walks through some of the financial measures in place to promote business growth, including:

Table of contents
Budget 2024 & Corporate Income Tax (CIT) Rebate Tax exemption scheme for new startups Popular tax exemptions Tax breaks for innovation

Bear in mind that this guide is for information only, and cannot be taken as advice. If you’re unsure about how to best manage your company tax matters, seek professional support from a tax accountant or lawyer, to ensure you are fully compliant with the law while benefiting from all of the incentives and opportunities which come your way.

Budget 2024 Updates

As we’ve mentioned, Singapore already has a very competitive corporate tax which is set at a flat 17%². To put this into context, Malaysia as one of our nearest neighbours has a corporate income tax (CIT) which runs to 24%³. So, with the corporate income tax rebate announced in Singapore’s Budget 2024, it does seem like Singapore businesses and foreign entities could see more value in operating here.

2024 Corporate Income Tax (CIT) Rebate

Let’s start out with the biggest news - the Budget 2024 CIT Rebate which could be worth 50% of corporate tax payable, and which was granted to all taxpaying companies - both local and foreign.

There are 2 components to this corporate income tax rebate: the CIT Rebate and the CIT Rebate Cash Grant.

As we've mentioned, the CIT Rebate is a rebate of 50% of the corporate tax payable, and is open to all taxpaying companies, including those which are not tax residents.

On top of this, the CIT Rebate Cash Grant could mean a cash grant of 2,000 SGD for companies which employed at least one local employee in 2023 (the local employee condition). This scheme is intended to ensure there’s some support for small companies which may not benefit very much from the main CIT rebate. Qualifying companies are guaranteed to receive at least 2,000 SGD in cash rebate, with any other rebate on top of this.

Combined these 2 rebates could be worth up to 40,000 SGD to eligible businesses. Here’s how the options break down, depending on whether or not your business meets the local employee condition:

	Company meets the local employee condition	Company does not meet local employee condition
CIT Rebate Cash Grant	Receive 2,000 SGD	No award granted
CIT Rebate	If the CIT Rebate amount is equal to or less than 2,000 SGD, no CIT rebate award granted If the CIT Rebate amount is greater than 2,000 SGD, the CIT rebate award less 2,000 SGD is granted Total amount payable across both awards is capped at 40,000 SGD	CIT rebate award is granted Total amount payable is capped at 40,000 SGD

Tax exemption scheme for new startups

Next, let’s dig into the new company tax exemption available in Singapore, also known as Start-up Tax Exemption (SUTE).

This tax exemption for a new company isn’t new. In fact it was first introduced in 2005, and then later revised in 2018. However, it’s a valuable benefit for eligible startups, which could offer exemptions on chargeable income for up to the first 3 years of assessment, with some other benefits following after.

Here’s how tax exemption under this scheme works, on the first 200,000 SGD of chargeable income. This assumes any of the first 3 years of assessment falls in or after YA 2020:

Chargeable income	Amount (%) exempted from tax
First 100,000 SGD	75%
Next 100,000 SGD	50%

This means that the maximum amount which can be exempted from tax is 125,000 SGD.

For businesses where any of the first 3 years of assessment falls in or before 2019, the rules around new company tax exemption were a little different.

There are some important eligibility rules to consider if you’re wondering if you’re eligible for this new company exemption:

• Your company must be incorporated in Singapore
• Your company must be a tax resident of Singapore for that YA
• Your company must have its total share capital beneficially held directly by no more than 20 shareholders throughout the basis period for that YA

Company shareholders can be individuals, or where some shareholders are not natural persons, at least 1 shareholder holding at least 10% of the issued ordinary shares of the company must be an individual.

Bear in mind that IRAS takes tax evasion and fraud very seriously, and audits companies to ensure only eligible businesses claim this exemption. In fact, hundreds of companies have been audited in just the past 3 years, resulting in penalties and reclaimed taxes of over 25 million SGD.

Possible abuses of the scheme, which IRAS warns against include:

• Allocating the income of an existing company to shell companies or
• Shell companies charging fees or expenses to an existing company without any bona fide commercial reasons.

Popular tax exemptions for all businesses

Next, let's take a look at some of the corporate tax exemptions and incentives which are available more broadly.

Partial tax exemption for companies

If your business is not eligible for the startup tax exemption, it may be able to look into the Partial Tax Exemption (PTE) options. Under this scheme, the following exemptions may apply:

Year of assessment 2020 onwards

• 75% exemption on the first 10,000 SGD of normal chargeable income
• 50% exemption on the next 190,000 SGD of normal chargeable income

This means that from YA 2020 onwards, the maximum exemption for each year is 102,500 SGD.

Rules for the year of assessment 2019 and earlier are different.

Foreign Sourced Income Exemption Scheme (FSIE)

In some cases, businesses which earn income abroad may be able to get exemptions for some taxes in Singapore⁴. This aims to reduce the likelihood of needing to pay tax twice on the same income. However, strict rules apply.

If the income in question has already been subject to tax in a jurisdiction that has an Avoidance of Double Taxation Agreement with Singapore you may benefit from an exemption or reduction in tax. There may also be some tax exemption on specified foreign-sourced income such as:

• Foreign-sourced service income
• Foreign branch profits
• Foreign-sourced dividends

In some cases, there could also be foreign tax credit for the taxes paid overseas, against the Singapore tax payable on the same income.

If you travel internationally, it’s worth getting professional tax advice to see if you can benefit from any of these options.

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Incentives for internationalisation

Many local companies are eager to expand overseas to benefit from access to larger markets. The Double Tax Deduction for Internationalisation (DTDi) ⁵ is designed to help in this regard. This is a tax deduction scheme for internationalisation that allows companies expanding overseas to claim a double deduction for eligible expenses for specified market expansion and investment development activities.

Qualifying expenses include overseas market development and investment trips, trade fairs, product certification and package design, overseas advertising including advertising in trade publications and to customers. There’s the option to claim DTDi on up to 150,000 SGD spend without prior approval, but for higher claims you need to talk to Enterprise SG first.

Tax incentives for financial services

Singapore is a global financial hub, and to encourage this sector to expand, there are various different financial services incentives. For example, the Monetary Authority of Singapore offers the Financial Sector Incentive (FSI) ⁶ scheme which is aimed at banks, fund managers, and capital market players. There are also insurance business schemes which are worth checking out if this is your business area.

Tax breaks rewarding innovation

Let’s finish this guide with a quick introduction to some of the tax breaks available for innovative Singapore companies.

Enterprise Innovation Scheme (EIS)

The Enterprise Innovation Scheme (EIS) ⁷ is aimed at growing Singapore businesses which work in R&D, innovation projects and similar innovative areas. The terms of eligibility for EIS are pretty complex, but if your business is eligible you might benefit from a 400% tax deduction on qualifying expenditure across certain activities, or the option to convert up to 100,000 SGD of qualifying spend to a non-taxable cash payout, at a 20% conversion rate.

Pioneer Certificate Incentive (PC) and Development and Expansion Incentive (DEI)

The Pioneer Certificate Incentive (PC) and Development and Expansion Incentive (DEI) ⁸ are incentives from the Economic Development Board which offer tax exemptions or concessions on income derived from qualifying activities for up to 5 years. This is designed to encourage Singapore businesses to be more competitive and innovative compared to industry rivals elsewhere. That means that eligibility rules hinge around companies using new technology or skills, and contributing a significant amount to the local economy here in Singapore.

💡 Singapore introduced a higher concessionary tax rate tier of 15% as part of its DEI scheme in late 2024 to align with global BEPS 2.0 standards, making it suitable for large multinational enterprises affected by the global minimum tax rate requirement.10

Refundable investment credit (RIC)

Our final - and new - option is the Refundable Investment Credit (RIC)⁹ which was announced in Budget 2024. This approach hopes to encourage investment in Singapore, boosting high-value, new, and substantive economic activities. Applicants could benefit from up to 50% investment credit on qualifying expenditure, which will be offset against the company’s income tax payable.

At the time of research, full details of this scheme have not been released by IRAS - keep an eye out with IRAS, Enterprise SG and the EDB to learn more.

Summary

There’s a lot to take in, but hopefully this guide should give you enough to start thinking about how you can take advantage of the many tax exemptions available to new businesses in Singapore.

While saving on tax expenses every year is one way to reduce business overheads, it’s equally if not more important to look at daily operational expenses - such as high currency conversion fees. If not controlled, they can quickly add up and eat into your profits. With a little help from Wise Business , you can get mid-market rate currency conversion for low transparent fees, and make and receive payments in a range of currencies, making it easier than ever to grow your company internationally.

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Sources

1. Straits Times, February 17 2024
2. IRAS - Corporate Income Tax
3. Malaysia CIT
4. IRAS FSIE
5. Enterprise Singapore - Double Tax Deduction for Internationalisation
6. MAS FSI
7. IRAS EIS
8. EDB - Pioneer Certificate and Development and Expansion Incentive
9. IRAS Refundable Investment Credit
10. Updates to the Development and Expansion Incentive