Starting a business in Singapore is simple, effective, and fast. This is mostly because several businesses receive taxation benefits. The Singapore government has introduced numerous tax breaks for entrepreneurs to foster innovation.

If you want to start a business in Singapore, you should consider not only fiscal but also non-fiscal incentives offered to your business. However, the government has some strict measures and rules to leverage these benefits. These include commitment to investments, the introduction of cutting-edge technology, and the expansion of businesses as per innovation capabilities.

Let's take a look at how the startups in Singapore can leverage tax benefits offered to them by the government.

Top Income Tax Incentives for Businesses in Singapore

As a startup business in Singapore, as long as you keep up with their conditions, here's how you can leverage the power of tax incentives. Some of the top tax incentives to leverage are as follows:

Corporate Income Tax Rebate

The government of Singapore introduced the concept of Corporate Income Tax Rebate to support businesses undergoing economic restructuring. This helps in lowering stress. The rebate is applicable for payable tax post deductions and exemptions, which further helps lower the company's overall expenses.

If you want to leverage this benefit, know that the rebate and cap may differ every year depending on government budget decisions. Leveraging the power of this tax rebate can improve the cash flow for businesses and bring better strategic development for growth.

Double Tax Deduction for Internalization (DTDi)

Singapore’s government has a bigger strategy to encourage businesses to move overseas with Double Tax Deduction for Internalization. As per this scheme, the companies will get to claim double tax deductions for internalization activities of business, such as international trips, setting up overseas business premises, and taking part in international trades.

This initiative allows businesses in Singapore to explore and expand their business while also discovering international markets. Furthermore, it is also good for the country's growth as it gets a position in the global business hub.

Start-up Tax Exemption (SUTE)

The Start-up Tax Exemption program focuses on supporting entrepreneurship and driving the growth of businesses in Singapore. As per this scheme, the new startups in Singapore will be eligible for tax exemptions on initially gained profits.

The exemption will be applicable only for the first three years of assessment, thereby boosting the finances of the company. As a result, it will help lower the financial challenges that businesses might face due to the crunch. Such a move by the government is also promoting entrepreneurship in Singapore.

Development and Expansion Incentive (DEI)

The Development and Expansion Incentive is offered to companies so that they can scale their abilities and indulge in high-value activities for doing business in Singapore. As a result, companies get an opportunity to move beyond Singapore for better operations. Companies eligible for this scheme can also obtain a reduced tax rate for incremental income.

Through DEI, the government aims at supporting the growth of companies across a value chain. Furthermore, it also aims to strengthen the relationship between city and state, which will improve the dynamic economic structure of the country.

Final Words

As a startup in Singapore, it is important to strategize the tax incentives offered by the company. Not only does it promote growth and expansion, but it also saves a significant amount of tax. However, it is important to understand the benefits and qualifying criteria for each of these tax benefits. Depending on that, you can choose if the particular incentives align with your business strategies. If you're a startup owner, connect with one of the tax advisors who work closely across the Inland Revenue Authority of Singapore (IRAS) to understand the tax complexities and compliance.