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Daily Tax Quote

New On The Network Today

This feed is published daily with selected new or updated content from across our network. For a list of network sites, many of which feature daily news, see below.

 
02/09 New Lowtax Editor Column, by Kitty Miv
01/09 International Privacy and Security, Investors Offshore special feature
31/08 Lowtax Belize, annual update
27/08 IRS To Drop UBS Lawsuit, Tax-News.com
26/08 New Lowtax Editor Column, by Kitty Miv
25/08 New PBTG Editor Column, Caroline, PBTG editor
24/08 Uruguay Stays On OECD Grey List, Tax-News.com
23/08 Don't Forget Doha, And I Don't Mean The Tennis, Jeremy Hetherington-Gore blog entry
20/08 Ireland Plans Social Security Overhaul, Tax-News.com
19/08 New Lowtax Editor Column, by Kitty Miv
18/08 New PBTG Editor Column, Caroline, PBTG editor
17/06 Lowtax Cayman Islands, annual update
16/08 Germany's Fiscal Court Seeks Property Tax Reform, Tax-News.com
13/08 Jurisdiction Special Focus: Antigua and Barbuda, Investors Offshore special feature
12/08 New Lowtax Editor Column, by Kitty Miv
11/08 New PBTG Editor Column, Caroline, PBTG editor
10/08 Brazil Cuts Import Tariffs, Tax-News.com
09/08 Ukraine Tax Code Published, Tax-News.com
06/08 France Plans Reform Of Property Tax Credit, Tax-News.com
04/08 New PBTG Editor Column, Caroline, PBTG editor
02/08 Islamic Finance - The New Mainstream Alternative, Investors Offshore special feature
28/07 New PBTG Editor Column, Caroline, PBTG editor
27/07 UK Launches Raft Of Tax Consultations, Tax-News.com
26/07 Fat Tax On The Menu , Jeremy Hetherington-Gore blog entry
23/07 Sarkozy Seeks 'Fiscal Convergence' With Germany, Tax-News.com
20/07 Singapore Base For Tuvalu OIFC, Tax-News.com
15/07 St Vincent & The Grenadines, Investors Offshore special feature
13/07 Tax- News.com Jersey Review 2010-2011
12/07 Goodbye To All That, Jeremy Hetherington-Gore blog entry
06/07 Hong Kong Full PBTG Guide, added to Personal Business Tax Guide
28/06 Lowtax Dubai, annual update
18/06 Singapore - Another Hong Kong?, Investors Offshore special feature
15/06 Swiss Parliament Approves UBS Agreement, Tax-News.com
08/06 Dubai Full PBTG Guide, added to Personal Business Tax Guide
04/06 Lowtax Panama, annual update
01/06 Lowtax Luxembourg, annual update
03/03 Personal Business Tax Guide, PBTG, has launched!
Providing essential tax news and information for globally mobile artists, contractors, entrepreneurs, professionals, small businesses, sportspersons and entertainers.
 

 
Lowtax Network Sites
Lowtax Network Portal: 'Low-tax' business and investment in the top 50 jurisdictions covered in exceptional detail.
Tax News: Global tax news, continuously updated through the day.
Investors Offshore: The independent offshore and alternative investment guide for expatriates and the globally aware investor. Sponsored by HSBC Bank International.
Law & Tax News: Daily news and background data on tax and legal developments for international business.
Offshore-e-com: A topical guide to offshore e-commerce focused on tax and regulation.
Lowtax Library: One of the web's largest and most authoritative business and investment information sources.
US Tax Network: The resource for free online US taxation information, covering: corporate tax, individual tax, international tax, expatriates, sales and e-commerce tax, investment tax.
NEW! Personal Business Tax Guide: Providing essential tax news and information on business for contractors, entrepreneurs, professionals, small businesses, artists, sportspersons and entertainers.
 
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LOWTAX ONSHORE

SINGAPORE: FISCAL INCENTIVES (ALL ECONOMIC SECTORS)


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BACK TO SINGAPORE INFORMATION: BUSINESS, TAXATION AND INVESTMENT

In Singapore's 2004 budget it was announced that the first $100,000 of normal chargeable income for new companies (with less than 20 shareholders) would be exempt from tax in each of their first three years of assessment, beginning YA 2005. From YA 2008, a 50% deduction was introduced on the next $200,000 of normal chargeable income for such companies in addition.

In 2010, 75% of the first SGD10,000 of income and 50% of the next SGD290,000 are exempt from tax.

The Technopreneur Investment Incentive has been expanded in scope and renamed the Enterprise Investment Incentive (EII). Investors in start-ups awarded the EII will enjoy tax deductions for any losses they incur in these start-ups. To help SMEs make greater use of intellectual property, the withholding tax on royalty payments was reduced from 15% to 10%.

Regional/International Headquarters Awards (HQ Awards)

To qualify for this scheme the company must have a sizeable network of overseas companies in the south-east Asian region and be well established both in its home country and in its industry. The HQ must provide "qualifying" management, treasury or other approved headquarter related services to its subsidiaries, associated or related companies in other jurisdictions. In order to be eligible to apply for incentives under the Headquarters Programme, the applicant company should meet the general criteria below:

  • The applicant should be, or belong to a group that is, well established in its respective business sector or industry and has attained a critical size in terms of equity, assets, employees and business share.
  • The applicant should be the nerve centre in terms of organisation reporting structure at senior management levels for its principal activities with clear-cut management and control for the activities.
  • The applicant should have a substantial level of headquarters activities in Singapore that may include:
    • Strategic Business Planning and Development
    • General Management and Administration
    • Marketing Control, Planning and Brand Management
    • Intellectual Property Management
    • Corporate Training and Personnel Management
    • Research, Development and Test Bedding of New Concepts
    • Shared Services
    • Economic or Investment Research and Analysis
    • Technical Support Services
    • Sourcing, Procurement and Distribution
    • Corporate Finance Advisory Services
  • The personnel employed by the applicant for its headquarters operations should be based in Singapore, and would include management, professionals, technical personnel and other supporting staff.

Currently (2010), the Regional Headquarters Award offers a concessionary tax rate of 15% for up to 5 years on incremental qualifying income from abroad. If applicant company satisfies all the minimum requirements by Year 3 of the incentive period, it will enjoy the 15% concessionary tax rate for an additional 2 years on qualifying income.

The applicant company must satisfy all of the following minimum requirements by the milestone indicated and maintain till the end of the incentive period:

  • paid-up capital of SGD0.2 million and SGD0.5 million by the end of Year 1 and Year 3 of the incentive period respectively.
  • 3 he adquarters services to network entities in 3 countries outside Singapore by the end of Year 1. Network entities refer to any entity within the group, including subsidiaries, sister companies, branches, joint ventures and representative offices as well as franchises.
  • 75% skilled staff throughout the incentive period. Skilled employment refers to at least an NTC2 Certificate qualification.
  • additional 10 professionals in Singapore by the end of Year 3. Professionals refer to at least a diploma qualification.
  • average remuneration per worker of SGD100,000 per annum for the top 5 executive designations by the end of Year 3.
  • additional SGD2 million in annual total business spending in Singapore by the end of Year 3. Total business spending refers to total operating costs minus the costs of work subcontracted outside Singapore, royalties and know-how fees paid overseas, raw materials, components and packaging.
  • additional SGD3 million in total business spending cumulatively for the first 3 years of the incentive period.
    • The level at Year 3 – Year 0
    • The level at (Year 3 + Year 2 + Year 1) – 3 x (Year 0)

Finance And Treasury Centres (FTC)

The Tax Incentive Scheme for Finance and Treasury Centres, introduced in 2004, was designed to encourage multi-national corporations to use Singapore as a base for conducting treasury management activities.

The scheme provides a concessionary tax rate (10% at the time of writing) on all fee income received by the FTC from its subsidiaries, related companies and associates outside Singapore (approved network companies) for the provision of qualifying FTC services and qualifying activities conducted on own account, and on
interest, dividend and gains from transactions in foreign currency denominated stocks and bonds, foreign exchange trading, interest rate swaps, financial futures and options.

There is exemption from withholding tax on interest payments on foreign currency denominated borrowings by the FTC from overseas banks and approved network companies, provided the funds raised are used for the conduct of qualifying FTC activities. Borrowings from network companies exclude funds borrowed by network companies from sources other than banks.

The FTC must meet the following minimum criteria: Annual total business spending (TBS) of SGD750,000; 3 professional staff employed by the FTC; and 3 qualifying FTC services to 3 or more network companies.

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Approved Royalties Incentives

In certain circumstances full or partial exemption can be obtained from the payment of withholding taxes on royalties, technical assistance fees and contributions to research and development costs. For the exemption to apply the payments must be made to non-residents and there must be no resultant increase in the liability to tax by the non-resident person in his country of residence. In default of this exemption the standard rate of withholding taxes levied on such activities is imposed, which generally speaking can only be reduced by the provisions of double taxation treaties.

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Accelerated Depreciation Allowances

Accelerated depreciation allowances enable a company to reduce its taxable profits, strengthen its asset base and improve its cash flow. The normal rate of annual depreciation for capital expenditure at the time of writing is an initial 20% allowance with the balance being written off at the rate of between 5-20% per annum.

However in certain circumstances accelerated depreciation allowances are available which allow companies to set off 33% per annum of the cost of all plant and machinery for each of 3 years subsequent to purchase. In the case of prescribed automation equipment, robots and certain environmental related equipment (e.g. energy saving equipment) 100% of the assets cost can be set off in the first year.

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Interest Payments to Non-Residents

The general rule is that withholding tax (15% at the time of writing) is deducted from interest repayments made to non-residents without Singapore activities. Interest repayments may be reduced in the following circumstances:

  • Double Taxation Treaty: Where the non-resident resides in a jurisdiction with which Singapore has signed a double taxation treaty jurisdiction.

  • Approved Loans: Interest payments on approved loans made by foreign institutions may be exempt from withholding taxes. Approved loans are assessed on a case by case basis and the exemption or reduction depends on the amount, terms, purpose and use of the loan in Singapore.

  • Qualifying Debt Securities: Interest payments on such instruments may also be exempted from withholding taxes.

  • "Approved" Asia Dollar Bond Deposits: So long as these bonds are held by approved banks and paid to non resident holders who do not carry on business in Singapore and have no permanent establishment there they are exempt from withholding taxes.

BACK TO TOP

 


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BACK TO SINGAPORE INFORMATION: BUSINESS, TAXATION AND INVESTMENT


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