There are three categories of foreign income that are exempted from the Singapore tax. People should learn about this information, so they can know their tax status. Three foreign income categories that are exempted from tax are foreign dividend, foreign profits, and also foreign sourced service income.
Several Important Conditions for Getting the Tax Exemption:
According to Section 13(9) of the Income Tax Act in Singapore, the tax exemption can be approved when three conditions are met. There are three different conditions that people have to consider when they want to apply for this tax exemption. Here are top three conditions that should be met by Singapore companies.
1. The highest corporate rate that is received from the foreign country is about 15% or more of the foreign income that is received in Singapore.
2. The foreign income is subjected to tax in the other countries where these incomes were received. In certain cases, the tax rate of the foreign income is different from the company tax rate. This situation is also acceptable as the condition for the tax exemption.
3. Th...
Income Taxes – Your business income is not taxed separately. It is considered your personal income and taxed accordingly.
Basis – Resident individuals are taxed on worldwide income, while nonresidents are taxed only on Kazakh-source income;
According to the JLJ Group (2013), with the implementation of a new income tax law from January 1st 2008, companies who previously enjoyed reduced tax rates saw their income tax rate gradually rise to the standard 25% by 2012.That is to say, companies would not enjoy the precious preference tax treatment any more. In other words, the tax rates change depends on the unpredictable market.
International pilots, flight attendants and cruise ship employees earn income like salary and wages while working abroad. Most of them might assume that they earn foreign income. As such, under Sec. 911(e), they are eligible to elect the foreign income exclusion on the United States (U.S.) expatriate tax return. However, taxpayers should first determine the source of their income by dividing their earnings based on (1) hours spent in the U.S and the airspace over the U.S.; (2) hours spent in foreign countries and airspace over foreign countries; and (3) hours spent in international airspace and waters. The first two are self explanatory. (1) are considered as the US source of income, and (2) is consider as foreign source of income. But what about number (3)? How should taxpayers classify their source of income while flying in international airspace or performing services over international waters?
Corporations have been moving to foreign countries for decades. Bermuda claims to be the first tax haven due to legislation passed in 1935 permitting offshore companies, however this claim to fame is debatable due to the similar legislation passed by Lichtenstein in 1926 to attract offshore capital. Switzerland also became a prominent tax haven after World War One. While other European countries had to raise their taxes to help pay off war debt, Switzerland, having been neutral in the war, had an influx of business. Originally tax havens were used to avoid personal taxation, but starting in the 1950’s companies have been moving to them because of new jurisdiction.
corporate income tax rate. Statistics estimate that American companies keep sixty percent of their cash overseas and untaxed, some $1.7 trillion, according to a U.S. Senate HSGAC Permanent Subcommittee on Investigation (Hickey 1). Tax haven countries are recognized for having lower corporate income tax rates, making them extremely desirable locations for MNCs to have their foreign holding companies. What’s more, these holding companies are known for holding intellectual property rights in the tax haven countries that do not abide by U.S. tax
“Banking has grown significantly in recent years and many assets formerly held in Switzerland have been moved to Singapore due to new taxes imposed by the Swiss. The biotech industry is burgeoning, with drug makers such as GlaxoSmithKline, Pflizer, and Merck & Co. all establishing plants here, and oil refining continues to play a huge role in the economy” (Zhou 2014). Singapore may be small but they are giving the world a reason to take a look at them with all of the growth. With companies moving operations to Singapore, they have slowly turned into a global hub to the rest of the world. “With a total land area of just 433 square miles and a small labor force of 3 million people, Singapore is able to produce a GDP that exceeds $300 billion dollars annually, higher than three-quarters of the world” (Zhou
Singapore ranks as one of the countries with the highest proportions of foreigners in its population and among its workforce in the world (8). Since, Singapore is considered to be a relatively safe and peaceful country, it attracts foreigners to work and live here. Due to the advancement of healthcare facilities, improved
Tax Benefits: For the first three years, the initial chargeable income of up to S$100,000 of a startup company setup in Singapore (LLC) is tax-free. Next, S$200,000, is taxed at the rate of 8.5% of corporate income tax. The tax rate applicable to the income above S$300,000 is 17%.
The last was the welcoming of the education. In the early days of Singapore, the country was doing a lot of manufacturing and assembling goods. This particular industry grew stagnant around 1960’s at around 12% of the GDP. Also during this time the post-war baby boom and free immigration policies resulted in a population growth of around 4.4% annually and that got paired with an unemployment rate that grew to 9.2% around 1966. This made the government realize that rising unemployment rate was a problem that needed solving urgently. Because of the lack of resources, the government also knew that human capital was going to be its biggest resource and thus in order to shift to an export economy an education system had to be put in place.
Janus Corporate Solutions. (2011) Introduction to Singapore’s economy. Guide me Singapore. Retrieved April 4, 2011 from http://www.guidemesingapore.com/relocation/introduction/singapores-economy
Singapore as a country has had various transformations throughout its history, however the period 1950 and 1970 was quite critical. Much of these changes had a lot to do with the development of trade and manufacturing. This is without forgetting the financial sector where the intention was to come up with a financial hub that could be used in economic development. Looking at the case of Singapore, we would say that it is a productive economy with a very high market competition. This observation has been further clarified by the Swiss International Institute for Management Development, going with their report that they released in the year 2001 (Chellaraj & Mattoo, 2009). In this study, we intend to evaluate the case of political economy of development in Singapore and examine the tensions between the state and various economic institutions. In additions to examining this institution, we would also like to examine how these variables have contributed towards the attainment of favorable growth rates and economic prosperity.
In addition, after the 2011 Singapore general election, the government of Singapore has greatly changed its economic approach and it seems to be better for the economy of Singapore so far. On the other hand, measures have also been taken to cool down the property market which has constantly affected inflation rates, also tightened the foreign labour policies that constantly influence the labour market and unfold its impacts onto the Singapore’s economy as it comes back in one round. The unemployment rate in Singapore has been maintaining itself as being one of the lowest numbers in the world. The majority of Singapore’s labour force is well educated and highly skilled. Even primary education is a must for all citizens (Economywatch.com, 2010). In addition, for the year 2010, Singapore had the 8th largest current account balance in the world at US$49.454 billion. To conclude, Singapore has come so far from its sunken economy since independence in 1965 to become a booming and prosperous economy that it is
Intellectual Property (IP) Rights (IPR) is adequately secured in Singapore. The common refrain from shareholder to shareholder is due to the respect and the protection towards IP; hence intellectual property can be easily located in Singapore. An investor has to adhere to several generic principles in order to have an adequate management of intellectual property rights in Singapore. Firstly, it is vital to have an overall strategy to protect it. Secondly, intellectual property rights are secured differently in Singapore than in the United States. Thirdly, an investor has to register and enforced intellectual property rights for the companies under local laws in Singapore. Companies may wish to seek advice from local attorneys or IP consultants to understand more about IPR, along with the importance of protecting and having one. The U.S. Commercial Service can provide a list of local lawyers upon request.
The Employment Act in Singapore is an act that covers every employee who is under the contract of service to their employer except employees engaged under managerial and executive levels or domestic workers. If either party intends to end the contract, they may do so with a notice of their motive of termination. Employees may need to serve a notice period before leaving, which ranges from 1 day to 1 month.