Brief introduction of Singapore's tax system

Singapore is one of the countries with the lowest corporate tax rate in the world, which is convenient for enterprises to expand their business. In addition, the government has introduced a series of tax plans and incentives to help enterprises develop. Corporate tax rate 17% tax-free withholding tax on capital gains-tax-free withholding tax on dividends-interest 15% withholding tax-patent fee 10% net operating loss (year)-carry forward unlimited net operating loss (year)-from the tax year of 2006, the company can carry forward the losses of previous years. 17% corporate tax rate will take effect in the year of assessment 2009. Subsidiaries registered in Singapore, or branches of foreign companies, whether local or non-local, enjoy this tax rate.

Some payments to non-local enterprises, such as technical assistance fees or management fees, must be subject to withholding tax at the corporate tax rate.

The single company tax system came into effect on June 65438+ 10/day, 2003, replacing the old restoration tax system. According to the new tax system, the company can issue a single tax-free dividend, and the dividend income obtained by shareholders does not need to be taxed.

Principle of tax jurisdiction

Singapore adopts the principle of territorial tax jurisdiction. Income earned in Singapore or income earned abroad but received in Singapore must be taxed. The tax exemption was implemented in the year of assessment 2003. Transactions between companies must be conducted in accordance with normal and fair business relations.

Singapore adopts the principle of territorial tax jurisdiction. Income earned in Singapore or income earned abroad but received in Singapore must be taxed. The tax exemption was implemented in the year of assessment 2003. Transactions between companies must be conducted in accordance with normal and fair business relations.

1. The annual tax rate of the source country when obtaining the income is at least15%; and

This income has been taxed in the source country. (If the company conducts a large number of business activities abroad and obtains tax incentives locally, its income does not need to be taxed, which also meets this condition. )

3. The tax year starts from 1 and ends at 1, and ends on February 3 1. In each evaluation year, the company reports the income of the previous year. For example, the income in fiscal year 2002 was declared in the tax year of 2003.

capital allowance

The cost of purchasing fixed assets cannot enjoy tax preference, because such costs belong to capital investment.

Depreciation of fixed assets cannot be deducted.

Although the company can't enjoy the tax preference for the cost and depreciation of fixed assets, it can apply for a tax refund for the loss of capital reserve of fixed assets.

A company may apply for capital allowance for plant and machinery and equipment purchased for commercial or trade activities. However, according to the income tax law, some types of assets cannot enjoy the capital allowance, such as S-license private cars.

Plant and machinery usually refer to fixed assets with the following characteristics:

Goods not belonging to the company (not for resale);

Equipment used in the company's business or trade activities;

Devices or facilities that do not belong to the business unit (but if the business unit is renovated or transformed, you can apply for tax refund according to the tax law 14Q. ) Type capital subsidy Initial subsidy for plant and equipment -20%

Annual allowance–initial allowance for indefinite industrial buildings and buildings–25%

Annual allowance-3% of the approved technology, patents and intellectual property rights, 20% of the approved cost sharing agreement, 100%, the total allowance can reach 80% of the cost, and claims can be made in five to 16 years.

This tax rate applies to the cost sharing agreement signed and approved on or after February 6, 2006. Prior to this, the capital reserve was 20%.

Reporting procedure

The company must submit the estimated total taxable income within three months after the end of the fiscal year. The company must file tax returns before165438+1October 30th of the tax year.

Legal provisions of corporate tax

Corporate tax is governed by the Income Tax Ordinance and the Economic Development Incentive (Income Tax Relief) Ordinance.

consumption tax

Goods and services supplied in Singapore and all goods imported into Singapore must pay 7% consumption tax.

The taxable value of imported goods shall be calculated on the basis of the CIF price of the goods (cost, insurance and freight) plus commission, other miscellaneous fees and all duties payable. The CIF price of the goods (cost, insurance and freight) plus commission, other miscellaneous fees and all customs duties payable.

In some cases, imported goods can get a consumption tax discount. Exports and international services are tax-free. Only taxpayers can declare consumption tax paid as input tax. Key points: treatment of 0-20% fringe benefits of personal income tax: treatment of living expenses adjustment taxable fringe benefits: treatment of accommodation taxable fringe benefits: treatment of tax-free fringe benefits of Singapore citizens and permanent residents: treatment of income other than taxable wages and provident fund income: treatment of income other than interest taxable wages and income: treatment of income other than patent taxable wages and income: treatment of income other than dividend taxable wages and income: taxable directors' fees. Any individual living in Singapore is a taxpayer, or he/she:

Stay in Singapore 183 days or more; or

Employment in Singapore 183 days or more.

Any Singaporean citizen who has worked overseas for at least six months in a year can choose to be classified as a non-resident in the estimated year after working overseas.

Foreign income earned by non-citizens in Singapore is tax-free.

The tax year begins at 65438+1 October1and ends at 65438+February 3 1. In each evaluation year, the company reports the income of the previous year. For example, the income in fiscal year 2004 was declared in the year of tax assessment in 2005. Resident individual non-resident individual progressive tax rate salary income tax-15% or the applicable progressive tax rate, whichever is higher.

Other income tax rate is 22%. Double tax incentives There is no double tax incentive. Individuals, income, children, etc. are exempted from tax. The savings interest of recognized banks is tax-free. All wages are taxable. Wages earned in Singapore for less than 60 days are tax-free. Tax refund (announced by the Ministry of Finance) is not refundable. Overseas income earned in Singapore is taxable. Overseas income earned in Singapore is tax-free. Non-ordinary residents plan.

The non-resident scheme came into effect in the year of assessment 2003, and is applicable to people who go abroad frequently. A person eligible for NOR only needs to pay tax on the income he earns in Singapore, and the taxable income is calculated according to the number of days he stays in Singapore in one year.

The income of NOR taxpayers before coming to Singapore is also tax-free, and the remittance of such income can also be tax-free. Employers or taxpayers who are not Singapore citizens can also pay tax exemption for overseas pensions.

Disposal of stock subscription right

Income from stock subscription rights is taxed according to salary income. Income refers to the difference between the market price of the stock and the exercise price when exercising the subscription right. Various stock options, such as QESOP, ESOP and CSOP, are helpful to reduce the tax burden. These measures are also applicable to other employee stock ownership plans.

Overseas tax relief

Overseas tax payable and Singapore tax payable only for this income, whichever is lower. Overseas tax reduction and exemption are calculated according to individual countries and sources, and those exceeding the limit will be confiscated.

Singapore has signed a double taxation treaty with 5 1 countries, and all service income from non-treaty countries can get unilateral tax credit.

Reporting procedure

Individuals must declare personal income tax before April 15 of the tax assessment year.

industrial tax

Industrial tax is calculated according to the percentage of the annual value of all houses, land, buildings and houses. Annual value refers to the total annual rental income of the industry, which has nothing to do with the industrial use of the industry.

General calculation method of annual value:

Rental income of similar industries in similar areas

A reasonable return on capital investment in an industry (generally applicable to industries with no other uses)

5% of the market value of vacant land or land with unimportant buildings.

The tax rate for the industrial and commercial sector is 10%, while the preferential tax rate for the residential sector occupied by the owners is 4%. In some cases, the property tax on land under development can be exempted.

The industrial tax is estimated twice a year, namely, June 65438+1 October 1 and July1. After the chief estimator determines the annual income, the owner can appeal if he has any objection. The tax reduction policy was announced in the 2003 budget. On or after June 1 2003, patent fees can be reduced or exempted by single tax.

Listed in section 14A of the individual income tax law.

Policy purpose

Singapore is striving to develop into an intellectual property center and attaches great importance to the strategic value of intellectual property. Patent right is one of the ways to protect intellectual property rights, which is helpful to the development of science and technology and the achievements of scientific research and development. Singapore actively advocates innovative economy, so it attaches great importance to and encourages the registration of patent rights.

Add advantages to the enterprise

The current tax system regards all the costs of patent rights as a part of capital, so it does not enjoy preferential treatment of tax relief. In order to encourage more enterprises to apply for patents for their inventions, so as to enable Singapore to develop into an attractive intellectual property management base, on or after June/kloc-0, 2003, a single tax exemption was provided for the patent fees of new enterprises and commercial operations (hereinafter referred to as "people").

Qualifying conditions

Anyone who meets the following conditions can get a single tax relief:

Patent fees must be legally registered in Singapore.

When applying for reducing the patent fee, it shall be confirmed in writing:

He has the right to enjoy the development income of the patent right;

After his successful patent application, he exercised his ownership in Singapore; and

He has not applied for and will not apply for the discount of patent application funds for patent fees (subject to the examination and approval of the Development Bureau).

Patent cost range

The scope of patent costs eligible for single tax relief is defined as follows:

Fees paid to the Patent Office in Singapore or elsewhere:

Patent registration and application

Investigation report on patent application retrieval

grant a patent right

Professional service fees paid to legal chartered brokers or equivalent personnel:

Apply for or obtain a patent right in Singapore or elsewhere

Prepare instructions or other documents according to local or foreign patent laws and regulations.

Providing opinions on the validity or illegality of patent rights (except opinions of a scientific or technical nature)

The cost of meeting the above conditions includes the cost of translating and searching the existing technology.

Can not be exempted from the cost of a single tax.

Expenses such as patent renewal, application for replacement, maintenance or enforcement, and transfer of rights and interests after the expiration of the patent right due to negligence shall not be reduced or exempted. These fees are not necessary for the patent application process and will not be reduced.

Documents required for applying for individual tax relief of patent right

You must:

Fill in and sign the declaration form; and

For each invention, fill in a "Detailed List of Cost Allocation for Single Tax Relief of Patent Claims" (tables in Microsoft file format can be downloaded from this page).

medium and small-sized enterprises

When applying for a patent right, SMEs can send the completed form to:

A. approved by the development bureau; and

B. Singapore Inland Revenue Department (with the approval of the Development Board). When you declare the annual income tax, you should also ask for tax reduction.

Companies larger than small and medium-sized enterprises are not eligible for patent application fund concessions, so when applying for patent rights, they must send the completed form to:

A. Economic Development Bureau; and

B. Singapore Inland Revenue Department (without the approval of Development Bureau). When you declare the annual income tax, you should also ask for tax reduction. In the 2003 budget, it was announced that as long as Singaporeans have the legal and economic ownership of property rights, the capital expenditure for purchasing intellectual property rights will be automatically written down in the items related to write-down subsidies in section 19B of the Income Tax Law. (1) Intellectual property rights purchased on or after June 2003165438+1October1day will enjoy this tax preference.

Under the tax system before (1), only intellectual property rights recognized by the Economic Development Bureau and the Information and Communication Development Board of Singapore (iDA) can receive the write-down subsidy under section 19B of the Income Tax Law.

Policy purpose

Today's global economy values creativity and innovation. In the past, the market value of top enterprises was mainly concentrated on tangible assets and financial assets. Today, the wealth of these companies comes from intellectual assets, including intellectual property rights. Singapore is committed to becoming an economy that creates, manages and uses intellectual property rights. In order to take an important first step, Singapore has adjusted its tax system, so that enterprises that buy intellectual property rights can enjoy considerable tax benefits as companies that buy tangible assets such as factories and machinery and equipment.

Preferential scope

As long as the buyer * accepts the transferor's legal and economic ownership of intellectual property rights, the intellectual property rights acquired from June 65438+1 October 2003 to June 65438+1October 3/2008 can enjoy the automatic write-down subsidy. The buyer can get a write-down subsidy for capital expenditure used to acquire intellectual property rights in accordance with the straight-line method within five years. Capital expenditure does not include attorney's fees, registration fees, stamp duty and costs other than intellectual property itself.

* The buyer refers to the company that has acquired intellectual property rights. The transferor is the person who sells intellectual property rights to the buyer.

Intellectual property projects that are allowed to receive write-down subsidies

Regarding the application for write-down subsidies, intellectual property rights are defined as:

Any patent, copyright, trademark, registered design, geographical indication or integrated circuit design;

Trade secrets or confidential information * *;

Any technology and information with commercial value.

* * Therefore, any legal provisions outside Singapore that are the same as or similar to the rights and interests listed in paragraphs (a) and (b) can be defined as "intellectual property rights".

Legal and economic ownership conditions

The buyer must obtain the legal and economic ownership of intellectual property rights from the transferor in order to meet the conditions for applying for automatic write-down subsidy.

The so-called legal ownership refers to the legal acquisition of intellectual property by the buyer.

The so-called economic ownership means that the future economic value created by intellectual property rights will be owned by the buyer.

In case of special circumstances, please consult the Economic Development Bureau.

* * * The company must submit a declaration form to ensure that the ownership conditions are met. One of the tax returns must be submitted together with the income tax return, so that the authorities can consider the application for write-down subsidy. Another form must be submitted to the Economic Development Bureau. You can download the relevant forms from the websites of Inland Revenue Department and Singapore Economic Development Board.

evaluate

When applying for write-down subsidy, in addition to submitting the income tax form (Form C) to the Singapore Taxation Bureau, an evaluation report of the value of intellectual property rights by a third-party independent institution must also be submitted under the following circumstances.

If the capital expenditure for purchasing intellectual property reaches or exceeds S $2 million, all unrelated transactions must be reported.

If the capital expenditure for purchasing intellectual property is S $500,000 or more, all related transactions must be reported.

The transferor and the buyer are listed as "related parties" under the following circumstances:

One party can directly or indirectly control the other party, or both are indirectly or directly controlled by the same person; or

When one party directly or indirectly owns 25% of the registered capital of the other party.

Acceptable valuation methods include but are not limited to cost valuation method, income valuation method and market valuation method. The evaluation of intellectual property rights must be carried out by qualified personnel (such as certified public accountants or chartered financial analysts), and the appraisers shall not have any interest in intellectual property rights or have any business dealings with the transferor and the buyer.

After submitting the evaluation report, the write-down subsidy amount will be calculated according to the actual capital expenditure of the buyer or the evaluation of the evaluation report, whichever is lower.

If there is reason to believe that the fair actual value of intellectual property rights is significantly different from the value listed in the valuation report, the auditor has the right to request a second independent valuation or adjust the amount of subsidy.