What Startups Should Know About Singapore Taxes 2025
Singapore is known as a business-friendly destination, especially for startups, foreign entrepreneurs, and multinational companies expanding into Asia. One primary reason for this reputation is its competitive and transparent tax system.
In this guide, we explain the Singapore tax rates in 2025, including personal income tax, corporate tax, and Goods and Services Tax (GST). We also clarify who pays what, how much, and why Singapore remains one of the most efficient tax regimes globally.
According to IRAS, the Singapore tax system is both progressive and straightforward. It treats residents and non-residents differently. Residents are taxed on a tiered basis. Non-residents are taxed at flat rates. This structure helps Singapore maintain a fair and transparent approach.
For businesses, corporate income tax and Goods and Services Tax (GST) are fixed-rate systems. These are easy to understand and offer predictability in financial planning. In addition to low rates, the government supports new businesses through generous tax exemptions and reliefs.
Newly formed companies benefit the most. Startups may pay a significantly lower tax rate than the official rate during their early years. These policies are part of a larger strategy to attract foreign investment and encourage business growth.
Global institutions such as HSBC and the World Bank consistently rank Singapore among the top jurisdictions for ease of doing business. PikoHANA helps founders take full advantage of this environment. With Corporate Services and Tax Services, your business stays compliant and tax-efficient from day one.
Personal Income Tax Rates in Singapore (2025)
Singapore uses a progressive personal income tax structure for tax residents. In 2025, the income tax rate for residents starts at 0% and rises to 24% for annual incomes above SGD 1 million.
These rates apply only to individuals considered tax residents in Singapore, which typically means you have stayed or worked in the country for at least 183 days in a calendar year.
For non-residents, the tax situation is different. Most non-residents pay a flat rate of 15% or 22% on employment income, depending on the type of work and the duration of their stay in Singapore. A flat 24% applies to other income types, such as professional fees, rental income, and contractual payments.
According to PwC, non-resident directors are subject to a withholding tax of 24% on their directors’ fees. This amount is deducted at the source, meaning the paying company must withhold the tax before paying the director. These individuals do not qualify for tax reliefs or personal deductions.
Non-residents also cannot benefit from standard allowances, such as earned income relief, spouse relief, or parent relief. Their taxable income is not reduced by expenses that typically apply to residents of the area. This results in a higher effective tax burden compared to local employees.
Foreign professionals planning short-term or project-based work in Singapore should consider these tax implications when negotiating contracts. To reduce friction and improve compliance, companies working with international teams often turn to Employer of Record Services from PikoHANA. This helps ensure that tax is handled accurately and employees are correctly classified from the start.
You can use the AO Dashboard provided by PikoHANA to track tax deadlines, status, and income categories. For complete filing, Tax Services are offered to ensure that your filings remain compliant.
Corporate Tax Rate in Singapore
The standard corporate income tax rate in Singapore is 17%. It is one of the lowest headline rates in the world. However, effective tax rates can be much lower thanks to exemptions and schemes available to new and small companies.
For example, newly incorporated companies may receive a 75% exemption on the first SGD 100,000 of chargeable income. A 50% exemption on the next SGD 100,000 also applies for the first three years. As a result, many businesses end up paying less than 10% effective tax in their early years.
Tax is assessed based on the preceding year’s income. Companies must file Estimated Chargeable Income (ECI) within 3 months after the end of their financial year. Compliance with the Companies Act of Singapore is mandatory.
PikoHANA supports this through Corporate Services and Corporate Secretarial Services. These services ensure proper records, timely filings, and regulatory compliance.
Singapore’s GST
GST in Singapore is currently 9% as of 2025. It increased from 8% the previous year.
This consumption tax applies to most goods and services. It includes those provided by businesses to other businesses or to end consumers. If your business exceeds SGD 1 million in annual turnover, GST registration is mandatory. Voluntary registration is possible if you are below the threshold but want to claim input tax credits.
According to KPMG, common errors with GST filing in Singapore include improper documentation, delayed registration, and claiming ineligible input tax. These mistakes can lead to serious financial and compliance consequences, including fines, penalties, and even reputational risk.
Goods and Services Tax
Many companies fail to properly document their input tax claims or incorrectly assess whether their supplies are standard-rated, zero-rated, or exempt from tax.
In Singapore, GST filing is done quarterly, and businesses must submit accurate returns to IRAS within one month after the end of each accounting period. Any delay or inaccuracy may result in late payment penalties and interest charges.
In FY 2023/2024, IRAS completed 2,521 GST audits, recovering approximately SGD 162 million (including penalties). These audits reveal common GST errors such as misclassification of supplies, failure to register on time, and filing mistakes.
Another frequent issue is businesses forgetting to deregister for GST after they fall below the SGD 1 million threshold or cease operations. Businesses must also reconcile input tax across different accounting periods, particularly when using partial exemption methods. These technical processes require a clear understanding of IRAS guidelines and meticulous recordkeeping.
PikoHANA’s Accounting Services and Tax Services provide ongoing support to avoid these risks. With automation tools, trained professionals, and timely alerts, PikoHANA ensures GST returns are accurate, complete, and submitted on time. Their system also tracks changes in IRAS regulations, ensuring your filings stay up to date and helping you avoid unwanted surprises and remain compliant year-round.
Singapore Income Tax Calculator
If you want to estimate your tax liability before filing, IRAS provides a free online Singapore income tax calculator. This tool is easy to use and works for both residents and non-residents. You can input income details, deductions, personal reliefs, and your residency status. The calculator then gives you an estimate of your tax payable.
This is especially helpful if you are unsure how bonuses, rental income, director’s fees, or self-employment earnings are taxed. These income types are treated differently in Singapore. For example, employment income may be taxed at a different rate from professional fees. Using the calculator helps you see how each element adds to your total tax burden.
For individuals who have moved to Singapore mid-year or plan to do so soon, it can show the tax implications of residency changes. It also helps foreign founders or startup employees estimate tax liabilities under different income arrangements.
However, online tools have limits. They do not account for complex situations, such as multi-country income, equity-based compensation, or rapidly changing personal circumstances. That is where expert guidance becomes critical. PikoHANA’s Budgeting and Forecasting Services give you customised tax scenarios and better clarity before you commit to any financial decisions.
According to HSBC’s 2025 Tax Guide, businesses involved in cross-border trade must be diligent in distinguishing between exempt supplies and standard-rated supplies. PikoHANA’s Corporate Services and Payroll Services help manage these complexities. They automate filings and maintain audit trails.
Why Singapore’s Tax System Is Considered Efficient
Singapore consistently ranks among the top five countries globally in terms of tax competitiveness. Filings are done electronically. Bureaucracy is minimal. According to the World Bank, the country offers one of the easiest tax environments for businesses in the world. Most fi
There are no capital gains taxes in Singapore. This means that profits from the sale of shares, property, or other investments are not taxed, regardless of whether they are generated by individuals or companies. This is a significant advantage for startups, investors, and venture capital-backed firms that rely heavily on equity growth.
Dividend income is also typically exempt from tax for both individuals and corporations. When a Singapore company pays out dividends to its shareholders, those payments are not subject to additional withholding tax. This allows for smoother profit distribution and reduces double taxation on business earnings.
Singapore has signed over 80 double taxation agreements (DTAs) with major global economies, including the United States, the United Kingdom, China, Australia, and Hong Kong. These DTAs prevent businesses and individuals from being taxed twice on the same income when earning across borders.
For example, a UK company receiving dividends from its Singapore subsidiary may pay lower withholding tax or even enjoy complete exemption depending on the treaty terms.
Singapore’s Range of Tax Schemes
In addition, Singapore offers a range of tax schemes and exemptions designed to support global founders. One such program is the Not Ordinarily Resident (NOR) scheme, which allows qualifying individuals to reduce tax liability on overseas income brought into Singapore. Similarly, the Foreign-Sourced Income Exemption (FSIE) scheme permits exemption on foreign income remitted into Singapore, provided specific conditions are met.
These measures make Singapore especially attractive to foreign entrepreneurs, digital nomads, fund managers, and senior executives who receive income from multiple jurisdictions. PikoHANA assists clients in navigating these international tax rules through its Tax Services and Employer of Record Services. With their expertise, businesses can legally optimise their tax position while ensuring they remain compliant with Singapore’s regulations.
For companies hiring talent across jurisdictions, PikoHANA offers Employer of Record Services. This helps you manage international payroll compliance without setting up entities in every country.
How PikoHANA Supports Tax Compliance for Foreign Founders
PikoHANA’s approach is built around simplifying complexity. For any business navigating Singapore’s tax rate structure, whether personal, corporate, or GST, the firm provides end-to-end support.
Services range from tax compliance and filings to corporate governance and cross-border payroll. The integrated AO Dashboard lets you stay on top of deadlines, filing dates, and real-time status without micromanaging accountants.
FAQ
What is Singapore’s income tax rate for foreigners?
Non-residents typically pay a flat 15% on employment income. They pay 22 to 24% on other types. These rates do not include personal reliefs or deductions.
What is the corporate tax rate in Singapore?
The standard rate is 17%. However, new companies receive partial exemptions for the first three years. This often results in lower effective rates.
What is GST in Singapore, and who is required to register?
GST is a 9% tax on goods and services. Businesses must register once their annual turnover exceeds SGD 1 million.
Is Singapore considered a tax haven?
Singapore is not a tax haven, but it is a tax-efficient jurisdiction. It has clear regulations, low rates, and strong international cooperation on compliance.
Do startups get tax relief in Singapore?
Yes. Startups can receive up to 75% tax exemption on their first SGD 100,000 in chargeable income for three years. There is also a 50% exemption on the next SGD 100,000.
Conclusion
The Singapore tax rate structure is one of the most business-friendly in the world. Whether you are an individual relocating to Asia or a company expanding into the region, understanding personal income tax, corporate tax, and GST is key. With the proper support from a qualified provider like PikoHANA, you can stay compliant and efficient while focusing on what matters: growing your business.
