How to benefit from Singapore company tax exemptions? (2025)

Knowing how tax exemptions work for your Singapore company is essential for smart financial planning.

In 2025, Singapore's tax system remains one of the most business-friendly in the world, offering generous tax exemptions and incentives to help companies grow.

Our article will give you insights on how Singapore’s company tax exemption schemes work, the current tax rates, and how your business can leverage these benefits for financial success.

1. What are the available tax exemptions for companies in Singapore?

1.1 Overview of Singapore’s corporate tax exemption schemes

Singapore corporate tax framework has designed several tax exemption programs to help businesses reduce their annual tax burden. These programs aim to lower costs, encourage investment, and drive economic growth.

Currently, Singapore has two main corporate tax exemption programs, which are: Partial Tax Exemption (PTE) and Start-Up Tax Exemption (SUTE).

Both programs are particularly beneficial for small and medium-sized enterprises (SMEs) and startups, allowing them to reinvest profits and scale efficiently.

By leveraging these exemptions, your business can build a strong financial foundation and maximize long-term success.

1.2. How can your companies be qualified for the Singapore corporate tax exemption schemes?

To qualify for corporate tax exemption in Singapore, your businesses must meet specific eligibility criteria set out in the Income Tax Act 1947.

These requirements include:

1. The company is incorporated in Singapore and registered with ACRA.
2. The company is considered <strong>a tax resident</strong> in Singapore for the year of assessment (YA)
3. Income must come from Singapore-based sources or foreign income brought into Singapore.
4. The company must have <strong>core income generating activities (CIGA)</strong> as prescribed by IRAS and ACRA.

For the startup tax exemption program, not all new startups are eligible for the Singapore startup tax exemption program.

Companies  that do not qualify include:

• Investment holding companies.
• Real estate development companies engaged in property sale, investment, or both.

To qualify for SUTE, a startup must:

• Be incorporated in Singapore.
• Be a tax resident in Singapore for the relevant YA.
• Have no more than 20 shareholders, where:
  • All shareholders are individuals or
  • At least one shareholder owns 10% or more of the issued ordinary shares.

These rules ensure that only genuinely operating businesses benefit from the tax exemption.

2. Two major tax exemptions schemes for Singapore companies (Detailed)

Singapore offers two main corporate tax exemptions to help businesses save tax. The first one is the Partial Tax Exemption scheme (PTE).

2.1. Partial Tax Exemption (PTE)

From YA 2020 onwards, all companies (including limited liability companies by guarantee) can benefit from this scheme: <ul><li>100% tax exemption on the first SGD 10,000 of taxable income.</li> <li>50% tax exemption on the next SGD 190,000 of taxable income.</li></ul>

For example, if your Singapore company has a taxable profit of SGD 300.000, your tax calculation would be:

This scheme allows startups to reinvest profits during their critical growth. You can use our Singapore tax calculator (Free to use)to check exactly how much tax you need to pay.

2.2. Startup Tax Exemption Program

For newly incorporated companies, SUTE provides significant tax savings for the first three years of operation: <ul><li>75% exemption on the first SGD 100,000 of taxable income.</li> <li>50% exemption on the next SGD 100,000 of taxable income.</li></ul>

For example, if your Singapore company has a taxable income of SGD 300.000, you only have to pay tax on the first SGD 25.000, the next SGD 50.000 and the last SGD 100.000. The tax payable is SGD 29.750 ((XNUMX - XNUMX) *XNUMX%.)

This scheme allows startups to reinvest profits during their critical growth. You can use our Singapore tax calculator (Free to use)to check exactly how much tax you need to pay.

3. How can GLA help you benefit from Singapore tax exemptions for companies?

As a 10-year expert helping hundreds of international entrepreneurs succeed overseas with Singapore company registration, Singapore tax accounting, we can help you succeed with the following support.

• Guide you on tax compliance (corporate tax rates, deductible expenses, and available incentives).
• Prepare and submit tax returns accurately and efficiently.
• Handle tax authority inquiries and ensure compliance with IRAS regulations.
• Advise you on tax optimization strategies
• Perform detailed tax audits on you behalf.
• Update you on real-time tax changes:

4. Frequently asked questions about tax exemption policy for Singapore companies

Highlights

• Companies recognized as tax residents in Singapore qualify for tax exemption programs.
• Eligible companies can benefit from either the Startup Tax Exemption (SUTE) or Partial Tax Exemption (PTE).
• In addition to exemptions, Singapore offers tax rebates and incentives, especially for tech and innovation-driven businesses.
• GLA provides expert tax advisory and compliance services to help companies maximize their tax savings.