CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Corporate Tax Cut Approved In Singapore

Corporate Tax Cut Approved In Singapore

by Mary Swire,, Hong Kong

14 November 2007

Lawmakers in Singapore have approved legislation giving effect to the tax reforms announced in the budget earlier this year, including the 2% cut in corporate income tax and further improvements to the fund regime.

The amended Income Tax Bill was passed by parliament on Monday. The legislation will reduce the corporate tax rate to 18%, and bring about other tax measures to improve the competitiveness of Singapore as a business hub, including a significant increase in the partial tax exemption threshold from S$100,000 to S$300,000 from 2008, which will mean that almost 80% of SMEs will pay tax at effective rates of less than 10%, making Singapore one of the most competitive locations for small business internationally.

Other notable measures in the Income Tax Bill are designed to boost Singapore still further as a regional funds centre. These include: the elimination of the 80:20 rule that currently requires charities to spend at least 80% of their annual receipts in Singapore within two years to qualify for income tax exemption; and improvements to the tax treatment of real estate investment trusts (REITs).

Singapore's ongoing improvements to its funds regime appear to be bearing fruit, with more than 100 hedge funds now based in the city-state, managing assets of US$16.5 billion, according to London-based HedgeFund Intelligence, which has pronounced Singapore as the most competitive location for hedge funds in Asia. Hedge fund assets managed in Singapore more than doubled in the first half of 2007, when twenty new hedge funds set up shop. Five of Singapore's funds now have more than US$1bn in assets, says the firm.

The tax cuts will, however, be balanced against a number of revenue raising provisions, and Second Minister for Finance, Tharman Shanmugaratnam, announced in the Budget speech in February that there would be a 1.5% increase in employer contributions to the Central Provident Fund (CPF), to 14.5%, and an increase in the GST rate from 5% to 7%, both from 1 July 2007, to provide "critical additional revenues". A S$4 billion GST Offset Package to help Singaporeans adjust to the GST increase was also announced.

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »