Corporation Income Tax Rebate (CIT Rebate) _ Tax reduction policy for Singapore businesses (2026)

To reduce the tax burden that Singaporean businesses have to pay every year, the Singapore Ministry of Finance always has preferential policies as well as tax exemptions for businesses.

In 2025, the Singapore Ministry of Finance announced to all businesses that there will continue to be tax reduction policies applied. Specifically, one of them is the tax reduction policy. Corporate income tax (called Corporation Income Tax Rebate). 

Therefore, in the following article, GLA would like to provide information related to the Corporate Income Tax (CIT) Rebate policy for businesses in Singapore in 2025.

1. What is Corporation Income Tax Rebate (CITR)? 

Corporation Income Tax Rebate (CITR) is a tax reduction policy of Singapore for businesses that have companies in Singapore. This is a tax reduction policy that applies to all businesses with taxable income in this island nation.

Every year, foreign businesses coming to Singapore have brought prosperity and also helped diversify the Singapore economy. Corporation Income Tax Rebate (CIT Rebate) was born to support businesses to reduce the amount of tax payable in 2018.

CIT is known as the tax that businesses pay to the Singapore government based on the company's annual income. CIT is called Corporation Income Tax, in Vietnam it is called corporate income tax.

Currently corporate income tax in Singapore is 17% of total annual turnover.

This is good news for businesses as the Singapore Ministry of Finance has announced a CIT Rebate rate of 40% with a maximum reduction of $15,000 under the Corporation Income Tax Rebate (CIT Rebate) policy. 

Tax reduction policies have been applied in recent years. Please look at the statistics in the table below to see that the corporate income tax payable has been reduced over the years.

2.1. The company does not pay taxes

Companies with no revenue do not have to pay corporate income tax.

2.2. Company has taxable income of 17%

Companies with annual revenue must pay annual income tax of 17% and other taxes (if any).

Then, the total corporate tax payable will be reduced by 40%, meaning that the business only needs to pay 60% of the total actual tax payable.

Below is an example for a business with $500.000 in revenue.

Tax year 2018

 Tax year 2019 (expected)

Thus, through statistics, it can be seen that Singapore is very preferential for businesses when applying active tax reduction support policies. Specifically, according to statistics over the years, the tax rate that businesses have to pay after applying the CIT Rebate tax reduction policy is much lower than other countries, especially Vietnam.

With a revenue of 500.000 USD in the Vietnamese market, the income tax must be paid at 20%. With attractive incentives from the Ministry of Finance and the Singapore government, foreign investors are always attracted and want to establish a company in Singapore, especially Vietnamese enterprises.

The Singapore market is always open and welcomes Vietnamese businesses that want to expand their business and enjoy incentives from this island nation.

3. Overview of CIT 2025 tax reduction

To support businesses in coping with increased costs, Budget 2024 introduced a 50% CIT relief for all corporate taxpayers, applicable for Year of Assessment (YA) 2024.

1. CIT Rebate: Companies will receive a 50% rebate on their corporate income tax payable, up to a maximum of S$40.000.
2. CIT Tax Relief Cash Grant: If a company has at least one local employee in 2023 (meets the “local employee” condition), it will receive a cash grant of S$2.000. This means that companies that meet this condition will receive a minimum benefit of S$2.000.

3.1. How to calculate tax deduction

1. If CIT rebate ≤ S$2.000: No CIT rebate will be granted.
2. If CIT rebate > S$2.000: Maximum rebate is S$40.000, but the S$2.000 cash grant will be deducted from the total rebate amount.

3.2. Conditions for receiving CIT tax reduction cash benefits

To be eligible for the CIT cash subsidy, the company must meet the local employee condition, meaning that the company has made CPF contributions for at least one local employee (Singapore citizen or permanent resident) in 2023. This excludes shareholders who are also directors.

The grant will be automatically available to eligible companies by 25 August 8, including registered corporate trusts and qualifying variable capital companies.

3.3. How to claim CIT tax credit

The CIT rebate will be automatically calculated by the Inland Revenue Authority of Singapore (IRAS) based on the Form CS / Form CS (Lite) / Form C filed by the company.

If estimated taxable income (ECI) has been assessed by IRAS, CIT relief will not be included.

If the tax assessment is complete, IRAS will send a notice of amendment by 31 August 8.

4. How will GLA support businesses to make the most of tax incentives?

GLA will enthusiastically advise and support businesses that want to establish a Singapore company. In particular, GLA will advise businesses on issues related to corporate tax, investment tax, etc. in detail and support customers with companies in Singapore to make year-end tax reports.

GLA is a consulting firm that provides business support services. Singapore company registration, Singapore accounting tax and support for corporate income tax filing services in Singapore, including: 

• 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:

5. Frequently asked questions about corporate income tax deductions

Highlights

• Singapore companies can take advantage of many methods to optimize taxes for the company including preferential policies and tax reduction policies.
• Corporation Income Tax Rebate (CITR) is Singapore's tax reduction policy for businesses with companies in Singapore.
• Budget 2024 has introduced a 50% CIT rebate for all corporate taxpayers, applicable for Year of Assessment (YA) 2024.
• GLA will support businesses to optimize taxes effectively with legal accounting tax services, at the best cost in the market.