Singapore: Domestic Corporate Taxation
Calculation of Taxable Base
Taxable income includes:
- gains or profits from any trade or business;
- income from investment such as dividends, interest and rent;
- royalties, premiums and any other profits from property; and
- other gains of an income nature accrued in or derived from Singapore, or income received in Singapore from outside of the jurisdiction. Capital gains (e.g. gains realised on the sale of fixed assets, or on foreign exchange on capital transactions) are not liable to corporate income tax. Certain income is exempt from tax under the Income Tax Act; examples of exempt income include shipping income derived by a shipping company, and foreign-sourced dividends, branch profits and service income received by a resident company that satisfies the qualifying conditions.
Deductible expenses must have been wholly and exclusively incurred in the production of income, and must also be revenue in nature and not prohibited under the Income Tax Act. Capital expenditure is not allowable as a tax deduction. Non-deductible expenses include amortisation and depreciation (although capital allowances are allowed), bad debts, the write-off or acquisition costs of fixed assets, legal and professional fees, medical and motor vehicle expenses, and penalties and fines.