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Epica FAQ Series

What tax benefits are given to a start-up by the Singapore government?

Corporate Income tax

What tax benefits are given to a start-up by the Singapore government?

Singapore Tax Exemptions for Small Companies [New as well as Existing Companies]


Singapore government introduced Start-up Tax Exemption Scheme in YA (Year of Assessment) 2005. This scheme was introduced to encourage entrepreneurship among the local people and to make local enterprises grow by giving tax exemption to newly incorporated companies.

The tax exemption is given to the qualifying companies for three consecutive years of the company’s operation. There is a full tax exemption up to first S$100,000, and an extra 50% exemption for the next S$200,000 of the chargeable income. A flat rate of 17% corporate tax is chargeable on the remaining income.

Table 1 shows the tax exemption for YA 2019 and before.

Tax exemption Tax rate on chargeable income Amount exempted
100% on first S$100,000 NIL S$100,000
50% on next S$200,000 8.5% S$100,000
NIL after S$300,000 17% NIL

Hence, the maximum tax exemption a company can enjoy is S$200,000 for three consecutive years if their first YA falls in 2019 or before.

IRAS (Inland Revenue Authority of Singapore ) has revised the tax exemption rates starting from YA 2020. If a company’s first YA falls in or after 2020, it will be given the revised tax exemption.

Table 2 shows the tax exemption starting from YA 2020 and after.

Tax exemption Tax rate on chargeable income Amount exempted
75% on first S$100,000 4.25% S$75,000
50% on next S$100,000 8.5% S$50,000
NIL after S$200,000 17% NIL

Hence, the maximum tax exemption a company can enjoy is S$125,000 for three consecutive years if their first YA falls in 2020 or after.

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