Study Finds Singapore Imposes Lowest Taxes On Start-Ups

by Mary Swire, Tax-News.com, Hong Kong

03 November 2009

A study comparing the tax policies of six countries - UK, US, India, Australia, Russia and Singapore – has found that Singapore imposes the lowest tax bill on start-up firms.

GuideMeSingapore.com has released its Comparative Tax Analysis Report that it says, for each country, provides an overview of tax policy after incorporating changes proposed in 2009. Using those tax rates, the report then performs a comparative analysis of the tax impact on a new firm incorporated in each of these countries.

To illustrate its findings, the report considers the case of a hypothetical start-up firm that expects to make an annual income of USD300,000. Such a firm, it calculates, would have a total corporate profit, dividends and capital gains tax bill of only USD34,000 in Singapore while it would face an approximate tax bill of USD60,000 in Russia, USD63,000 in the UK, USD90,000 in Australia, USD100,000 in the US, and USD102,000 in India.

The report’s authors emphasized that there are "several other tangible and intangible factors that had be considered in addition to a country’s tax structure when deciding whether or not to relocate a business in that country. These factors include the overall health of the country’s economy, its growth rate, its political and business environment and its infrastructure".

The authors also caution that each country’s tax regimes differ with regard to permitted exemptions, incentives, and allowances.

However, they also pointed out that the “high ranking that Singapore has received in several other independent ‘business friendliness’ surveys further validates the attractiveness of Singapore as a preferred business jurisdiction". "For instance, according to the World Bank’s Ease of Doing Business Index, Singapore is ranked first while the other countries are ranked as follows: USA 4, UK 5, Australia 9, Russia 120, and India 133,” they observed.

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