Lowtax Network

Back To Top

Country Score

Country Rankings - Singapore

  • Jan 31, 2018   Singapore: pursued

    You know the world is being turned on its head when Hong Kong is trying to be the next Denmark, and Singapore the next Sweden. I exaggerate of course. The world really would have become unrecognizable in a short space of time if tax reached Nordic levels in these bastions of economic liberalism. But it is true that both jurisdictions have embarked on similar fiscal trajectories that involve higher spending on welfare and infrastructure. This does create a certain amount of tension with their economic policies however. Higher spending obviously necessitates higher taxation, but these two jurisdictions have reputations to maintain; both are rated as among the best places in the world to do business, largely because of their relatively low tax burdens and simplistic tax rules. It'd be very premature indeed to suggest that either of these jurisdictions were in danger of experiencing a long competitive decline by seeking to follow more sociallyorientated policies. But the timing of these fiscal shifts isn't great, given the intense tax competition that is going on globally. Indeed, the United Kingdom isn't far off Singapore's 17 percent corporate tax rate, and there are even some countries in the European Union which have lower corporate tax than Hong Kong, where the rate is 16.5 percent. The presence of this policy push-and-pull was highlighted by a couple of news developments last week, in which Singapore was urged to sharpen its act on tax with the next annual budget coming up (and not for the first time this year), and Hong Kong was urged to diversify its dangerously volatile revenue streams, given it intends to spend more on health, education, and transport, etc. So, it's quite likely that we will see taxation continue to creep up in these two places in the coming years. Perhaps even new taxes will be introduced, such as a sales tax in Hong Kong. And the risk is that this could dent business confidence and lead to something of a reputational downgrade. For the foreseeable future however, they remain comfortably ahead of most of the competition, and the world is still racing to catch up. So, we're unlikely to see Singapore twinned with Stockholm any time soon. Still, it's telling that both jurisdictions have begun to glance over their shoulders, and perhaps the time is coming when they might need to start upping their game.
    Source: https://www.tax-news.com/news/Singapore_Urged_To_Enhance_Tax_Offering____76156.html

  • Feb 27, 2017   Singapore: free

    If only life was as simple for Italy and France as it was for Hong Kong and Singapore, which have recently announced their respective 2017 Budgets. No need for major fiscal surgery in these places. Just a bit of tinkering with the tax laws here and there, to ensure their economies remain in rude health. It's almost as if being a small, densely populated ex-British colony, preferably in the Asia-Pacific region, is a pre-requisite for economic success. Indeed, some of the similarities between Hong Kong and Singapore are quite striking. Hong Kong is six times the size of Washington, D.C., while Singapore is just 3.5 times larger than the US capital. The former's population is about 7m, and the latter's not far off 6m. Hong Kong's GDP was just under USD430bn last year, the world's 46th highest, and Singapore's was USD487bn, 41st. They are the world's freest and second-freest economies according to the Heritage Foundation. Income tax rates in Hong Kong and Singapore are quite similar, at 16.5 percent and 17 percent, respectively, for incorporated companies, although the latter provides more opportunities for much lower effective rates. Top rates of personal income tax are 17 percent and 22 percent, respectively. PwC says Hong Kong has the third-best tax system for businesses, while Singapore is the second-best place on the planet to do business, according to the World Bank. Both legal and economic systems are largely based on English common law. Even their long-term fiscal policies are heading in the same direction. Governments in both jurisdictions are increasing spending on health, education, and infrastructure, and are considering rises in taxation to pay for it. BEPS and new international tax transparency standards are also making themselves felt on the two territories' tax frameworks. But will rising taxes and spending mean that, eventually, Hong Kong and Singapore will become, well, just like most other high-tax, high-spend developed economies? Possibly. But such a transformation, if it happens, is likely to be a long way into the future. There's certainly no danger of Hong Kong and Singapore resembling France or Italy any time soon!
    Source: http://www.tax-news.com/news/Singapores_2017_Budget_Includes_International_Tax_Changes____73535.html

  • Nov 02, 2015   Singapore: champion

    Singapore may not be everybody's cup of tea. Social and cultural attitudes are still quite conservative, it's often insufferably hot and humid, and, like in many Asian cities, lungs of steel are required when the haze descends. But as a place to do business, it's second to none. At least according to the latest Doing Business report by the World Bank, which attempts to measure how easy (or not) it is to establish and operate a business in a given country, and which again ranks Singapore first out of the 189 jurisdictions reviewed. The relative ease with which companies in Singapore are able to discharge their tax obligations combined with relatively low tax rates are, of course, a major factor in Singapore's enduring success in these sorts of polls. But it also goes beyond tax. It's all well and good charging companies low rates of tax, but if it takes forever and a day to actually start your company, obtain any necessary licenses, and get hooked up to water and electricity, or you can't trust the judicial system to enforce contracts and property rights in a fair and even-handed manner, you might as well not bother. Singapore has the best all-round package it seems – as long as the air conditioning works!
    Source: http://www.tax-news.com/news/Singapore_Tops_World_Banks_Doing_Business_Report____69544.html

  • Sep 29, 2015   Singapore: outspoken

    It's almost a heresy these days to question the word of the OECD on issues relating to taxation. So I congratulate the Singapore Government for saying what has almost become unsayable – that the BEPS project won't be all upside with no downside, contrary to what its most fervent supporters would have us believe. In fact, there could be quite a high price to pay for a level playing field, if such an outcome is indeed possible. The BEPS project carries with it the risk that the international tax framework could become more uncertain if its recommendations are applied inconsistently, and as Josephine Teo, Singapore's Senior Minister of State for Finance and Transport, pointed out, it could swing the pendulum towards more incidences of double taxation in future, which could be detrimental to cross-border investment flows. What's more, with tax risk and controversy already on the rise, multinationals are going to be a lot more cautious about where they invest. This could have a potentially harmful effect on economies in the developing world that need their investment the most. Indeed, the BEPS project may merely end up stymieing a global economy that is already tottering as a result of weak growth in China. While Singapore is going against the grain somewhat with its criticism of the BEPS project, it's not completely alone in this respect. And some of the criticism has come from surprising places. You'd expect organizations representing the interest of multinational businesses to flag up these sorts of concerns, and by and large they have. It's also no surprise that the BEPS project is getting tails up in the US Congress, especially among Republicans, who see it as a way to merely increase tax on US corporations. But the United Nations? Yes, even the UN, which frequently lambasts the corporate world for shifting taxable profits out of developing nations, has said that insufficient thought has been given to the economic consequences of the BEPS project, and that any measures at international level "must include an investment policy perspective." Unfortunately, I can't award the UN an encomium, so Singapore gets it instead.
    Source: http://www.tax-news.com/news/Singapore_Urges_Need_For_Tax_Competition_After_BEPS____69197.html

  • May 08, 2015   Singapore: honest

    Well done, Singapore, for suggesting that the OECD's focus with its BEPS project is almost entirely focused on "harmful" tax practices to the point where the beneficial ones have been forgotten about. It sounds – in the spirit of one of John Cleese's characters again – like stating the bleedin' obvious, but it's about time somebody did. Of course, from the OECD's point of view, I suppose that's the whole ethos of The Project: the elimination of tax competition. Not that you'll hear such an admission from the mouth of Angel Gurria or the finance ministers of the OECD governments who regularly praise the work of the OECD without ever seeming to question it. If they ever did stop to think what they are about to unleash on the world, perhaps they might begin to have second thoughts. Then again, politicians generally are incapable of thinking beyond the next election and will say whatever needs to be said to attract the necessary number of votes from the necessary demographic groups. How else do you explain something as ill-conceived as the UK's Diverted Profits Tax, rushed through to take effect just a month before the general election? Indeed, numerous studies suggest that governments all over the world, despite their routine pro-BEPS platitudes, are already fatally undermining the Project by legislating before it's even finished. As the European Centre for International Political Economy succinctly concluded in a critique of the OECD's plans to ensure proper taxation of the digital economy (which, it pointed out, contradict much of what the OECD stands for, i.e. free trade and technological progress), the way things are shaping up, the cure could be worse than the disease.
    Source: http://www.lowtax.net/news/Singapore-Sounds-Note-Of-Caution-On-BEPS-67838.html

  • Mar 26, 2015   Singapore: raises personal income tax

    There couldn't be much more of a contrast between uncompetitive Italy on the one hand, and uber-competitive Singapore on the other. In the World Bank's latest annual Doing Business ranking, which (unsurprisingly) ranks economies on their ease of doing business, Italy is in 56th place. Singapore is top. PwC's annual Paying Taxes Index, which measures how easy it is to pay taxes in 189 countries, puts Italy 141st, while Singapore flies high at 5th place. Singapore is also the second-freest economy in the world according to the Heritage Foundation. Italy is down in 80th place (just below Samoa and Madagascar) and is considered only "moderately free." Regular readers will know that praise is heaped on low-tax jurisdictions like Singapore on a fairly regular basis. So it feels strange, given all this, to dish out an execration for the city-state this week. I suppose it's only for a minor offense, but that offense does set a precedent. In the 2015/16 Budget, Finance Minister Tharman Shanmugaratnam introduced a new top rate of personal income tax. At 22 percent, it is considerably lower than the top rates found in many developed countries, but one of the reasons why Singapore has been so successful is that investors are attracted by its low – and flat – taxes. That the Government has said that it is determined to enforce this measure shows that it is worried about current fiscal trends. In last year's Budget, Tharman warned that with increased social and health care spending, the Government is forecasting a small budgetary deficit of SGD1.2bn (USD950m), or about 0.3 percent of gross domestic product (GDP), in 2014/15, after a surplus of 1.1 percent of GDP in 2013/14. Government spending is expected to rise by 8.3 percent, outstripping a 4.1 percent rise in revenue. He then disclosed that expenditure is likely to increase by 3 percent of GDP by 2030, due to infrastructure spending and social spending, especially in health care. Health care spending, on account of the ageing population, is expected to double from 2011 levels to SGD8bn by 2015, before reaching SGD12bn by 2020. It is remarkably reminiscent of Hong Kong, which is also facing upward pressure on taxation as a result of projected increases in public spending. The fiscal situation in the two places can hardly be described as dire, and both Singapore and Hong Kong have sensibly built up fiscal reserves. But it won't be surprising if we see more tax increases, albeit on a fairly small scale, in the future.
    Source: http://www.tax-news.com/news/Singapore_To_Enforce_New_Top_Income_Tax_Rate____67512.html

  • Sep 04, 2014   Singapore: good cop

    Singapore on the other hand takes a completely different approach. True, it doesn't have a huge budget deficit to fill like the UK does. But here's a novel concept: as the Inland Revenue Service's latest report shows, Singapore has managed to achieve astonishing rates of tax compliance by actually helping taxpayers to file on time and pay the right amount of tax. It contrasts sharply with the tax compliance situation in the UK, which is becoming akin to sending someone across a minefield wearing a blindfold. It probably helps also that taxpayers in Singapore, where taxes are relatively low, feel they get much better value for money than their counterparts in the UK, with its creaking infrastructure and a national health service seemingly at breaking point. It's reminiscent though of the good cop/bad cop scenes in the movies. The bad cop might have the fun, but the good cop usually gets the prize in the end.
    Source: www.tax-news.com/news/Singapores_High_Compliance_Level_Sustains_Tax_Collections____65687.html

  • Aug 07, 2014   Singapore: every little helps

    News that Singapore has issued a guide on the taxation of start-up costs isn't in itself the most sensational of scoops, yet it's worth mentioning as it is indicative of Singapore's overall attitude to entrepreneurship and investment, which is more friendly than most. New businesses need all the tax clarity they can get when attempting to get off the ground, and Singapore's Government seems only too happy to oblige, with the Inland Revenue having launched a series of e-guides over the past few months. Some recent reports attest to Singapore's growing influence in the region, and indeed the world, as a business, trade and investment hub. There was a 16 percent rise in business formations in the city-state in the second quarter of 2014 compared with the same period last year, and 30 percent of the companies formed in Q2 had foreign shareholders. Singapore is now the world's fourth-best financial center behind New York, London and Hong Kong according to Z/Yen's index and recently overtook Mauritius as the jurisdiction of choice for routing investment into India. Singapore's corporate tax, at 17 percent, doesn't actually feel that low anymore (although it probably does in the United States!) with corporate tax rates on a firm downtrend. But as most multinational business executives will tell you, it isn't always about tax rates. So much more goes into the decision-making mix these days when looking for the optimal place to position a regional HQ, a production or distribution center, holding company etc, and stability and certainty are probably prized by investors above all. And Singapore tends to deliver on these fronts.
    Source: www.tax-news.com/news/Singapore_Issues_Guide_On_Taxation_Of_StartUp_Costs____65399.html

  • May 15, 2014   Singapore: hubbing it

    Singapore, while slinging around many of the same acronyms, has also been re-affirming its commitment to free trade in general, and the RCEP (Regional Comprehensive Economic Partnership) in particular. Like Hong Kong, it sets out to be a regional centre for holding companies (aka trade), and like Hong Kong, it is successful because of the welcome it offers to international companies. I am stunned to read that there are more than 10,000 European companies in Singapore. Of course, I don't know how many of them are trading companies: there are 300,000 Chinese companies in the BVI, and I suppose that not many of them trade. But if you put your wealth in a place, and assuming that you are not over the hill like me, where else would you put your trading subsidiary, all otherwise being equal?
    Source: https://www.tax-news.com/news/Singapore_In_Pursuit_Of_Freer_Trade____64590.html

  • Mar 13, 2014   Singapore: penniless

    Well, having got that off my chest, let's turn to something a bit lighter, which can be the competitive, chest-beating agonizing of Hong Kong and Singapore about hypothetical fiscal problems in 20 or 50 years' time. Not for them the misery of coping with rising interest rates: Hong Kong has a budget surplus and cash reserves of about USD300bn; Singapore is coy about admitting its position, but most estimates also suggest reserves of USD300bn. Bring on the interest rates! So what can explain their self-abasement? Perhaps it's a defensive strategy: if they pretend to be poor, perhaps the non-rich goliaths of the OECD will be less horrid to them? Hmmm, don't buy it. Perhaps it's something more sinister? Maybe the bosses have already crumpled under the "rich" countries anti-low-tax blitzkrieg and need to ramp up their tax-raising credentials with their populaces prior to doubling tax rates? No, don't buy that either. Ah! I've got it! There's going to be a takeover battle between Hong Kong and Singapore; either they're planning to buy each other, or maybe they're after Shanghai? No, OK, that's silly. So then all that's left is that there is an outbreak of common sense among Asian politicians. But of course that's even sillier. The mystery is unresolved.
    Source: www.tax-news.com/news/Singapore_Warns_Of_Waning_Finances____63959.html

  • Jan 16, 2014   Singapore: coins it

    Singapore has issued some quite sensible guidance on tax aspects of bitcoin transactions, which suggests that there must be a fair amount of bitcoin activity there. The first Asian bitcoin conference was held in Singapore last year, at any rate. Bitcoins join Uzbekhistan on the list of subjects on which I am passing ignorant. I keep trying and failing to understand the phenomenon of bitcoins. Theoretically one should be in favor of a virtual currency with, so to speak, monetary limits (unlike existing national paper currencies, which are being inflated out of sight by central banks who want to keep interest rates low), but I question the usefulness of a currency which by definition can never exist in large quantities. On the other hand, other, similar currencies could exist in large numbers. If there is a bitcoin, why shouldn't there be a bitcoin2, and so on? So in the end that would be just as inflationary as a normal fiat currency. For a while it seemed as if securitization was going to provide the answer to the value of money conundrum, and it may yet do so: if all real estate (to pick one sector of the economy) is securitized, and all real estate transactions take place using "real estate units" (we will call them) then there is an automatic cap on the money supply. A real estate company can sell its stock of real estate units for cash, but it can only create more such units by building; the supply of land is finite (more or less, unless you are a fish). Don't get scared: they aren't going to let me anywhere near the money supply, so you're safe with your bitcoins for a while yet.
    Source: www.tax-news.com/news/Singapore_Clarifies_GST_On_Bitcoin_Transactions____63300.html

  • Aug 22, 2013   Singapore: v Hong Kong

    I'm not sure if I would want to put my thousand-dollar bills in Switzerland nowadays, and definitely not if I was American. Other figures out this week testify to the success of Singapore in attracting international investment. It has a particularly attractive regime for SMEs, even better than rival Hong Kong. If I was looking for a home for my international news-syndicating business (I wish: offers to kitty@wolterskluwer.com, please) I would seriously consider Singapore. Top origins for incoming businesses are from the British Virgin Islands, the United States, China, Japan and India. That's what you might expect, but I am intrigued by the BVI, on this list. Singaporean authorities vehemently deny that they are attracting money fleeing Europe's increasingly onerous tax regimes, but how would they know? Singapore doesn't keep records of the beneficial ownership of companies, so that the Swiss or Chinese owner of a BVI company (most BVI company formations are said to be made by Chinese) can set up a Singaporean holding company, creating a structure that is impenetrable, and that's even before considering the use of trusts, which are themselves quite opaque in Singapore.
    Source: www.lowtax.net/asp/story/front/Singapores_New_Business_Formations_Rise_Sharply____61761.html

  • May 23, 2013   Singapore: being picky

    Hong Kong has had another good week (all weeks seem to be good ones in the SAR), making sensible proposals to tidy up its investment advisory regime, and working towards an improved IP regime. Tax-efficient IP regimes are all the rage at present, and it is normally possible for a company to shelter its royalty and licensing income streams near completely from corporation tax by using preferential holding company structures and tax treaty networks. It's difficult to choose between Singapore (whose PIC incentive scheme is much used for IP licensing) and Hong Kong from this perspective; but the UK is now a player as well, with its new 10 percent Patent Box rate, and the Netherlands has an equally attractive regime. What is curious about the various competing regimes, which just seem to get better and better, is that they are a major BEPS technique, and some of the countries which are the most vociferous on that subject offer some of the most tempting IP opportunities. The dark arts of IP valuation offer useful techniques for reducing mainstream taxable profit, and those nameless companies which manage to pay just a few million pounds, euros or dollars of CIT while squirreling away billions of profits in low-tax havens have a large component of IP in their magic brew. This dichotomy is totally understood by the Finance Ministers of the G5, 7, 8 or 20 (take your pick) and they therefore know perfectly well that there is nothing they can do about BEPS except to wring out the maximum of political juice from the ongoing charade.
    Source: https://www.lowtax.net/asp/story/front/Singapore_Warns_Firms_Over_PIC_Compliance____60791.html

  • Apr 25, 2013   Singapore: in clover

    Singapore also got good grades from the OECD after its inspection, and like the Cayman Islands has perhaps benefited from the nature of its business, which has tended not to attract the seamier types of transaction and bank account. Singapore is of course a by-word for commerce-driven efficiency, but it is also a caring society, at least for its own citizens, although the balance sheet is more mixed for the large population of "guest-workers." Certainly the Government has done little wrong in terms of its economic strategies over time, with strong support for SMEs, low taxation and avoidance of debt. The Chinese don't seem to like debt, or perhaps it's just that they are so business-minded: Singapore, like Hong Kong and Mainland China, has substantial cash reserves. They are a bit hard to count, in the case of Singapore, because they are scattered around a number of institutions, but they certainly add up to some hundreds of billions of dollars. It's hard to see much that can go wrong for Singapore in the immediate future; again like Hong Kong, it is a magnet for the flows of assets and business activity that are being driven out of Europe and to a lesser extent the USA by restrictive legislation and economic paralysis.
    Source: www.lowtax.net/asp/story/front/Global_Forum_Gives_Singapore_A_Pass_Mark____60462.html

  • Jan 24, 2013   Singapore: top of the class

    Singapore has had a good week, being named the world's most dynamic country in a Grant Thornton survey, while it continues to try to help its SMEs to take advantage of the generous tax breaks available through its Productivity and Innovation Credit. Many countries pay lip service to the need to encourage their SMEs, while continuing to strangle them with regulation and taxation. Figures continually show that SME's represent 90% or more of all companies and generate all of or even more than total net employment. That's to say, bigger companies actually lose jobs overall. But of course that may be because they 'offshore' them or employ technology effectively to improve productivity. If SMEs can be faulted, it is indeed that they tend to be too labor-intensive, with their attention fixed so hard on the daily grind that they fail to innovate when they could. Singapore knows this, apparently.
    Source: http://www.lowtax.net/asp/story/front/Singapore_Ranked_Worlds_Most_Dynamic_Economy____59306.html

  • Jul 19, 2012   Singapore: wants to be like Hong Kong

    Singapore was touting its business-friendly wares this week, and it needs to be in my ranking, even if it hasn't done anything new in the last couple of months. If governments can impose retrospective taxes, I can award retrospective encomiums, and it's certainly true that the country's last budget was stuffed full of goodies for business, especially for SMEs. Singapore has aspirations to rival Hong Kong: it's interesting to speculate on whether they would do better to specialize, rather than competing on the same turf as Hong Kong. To some extent that's inevitable: Singapore can't rival the SAR as a Chinese gateway, and is evidently better placed than Hong Kong to be a gateway into India and Indonesia. Still, that hasn't stopped Singapore from setting its cap at the international renminbi market.
    Source: http://www.lowtax.net/asp/story/front/Singapore_Plugs_Its_Credentials_As_Asian_IP_Hub____56357.html


« Back to Country Rankings