The Partial Tax Exemption (PTE) is a standing relief that reduces the effective corporate tax rate for companies in Singapore. It is available to all companies – local and foreign, including companies limited by guarantee – except those that are claiming the Start-Up Tax Exemption for the same Year of Assessment.
For YA 2020 onwards, the PTE exempts 75% of the first S$10,000 of normal chargeable income and a further 50% of the next S$190,000. That gives a maximum exemption of S$102,500 of chargeable income in each Year of Assessment (S$7,500 plus S$95,000). Only the remaining chargeable income is taxed at the 17% rate.
The PTE applies automatically – you do not need to make a separate application – and it works alongside other reliefs such as the Enterprise Innovation Scheme and any Corporate Income Tax Rebate granted in the Budget. New start-ups usually enjoy the more generous Start-Up Tax Exemption for their first three YAs before moving onto the PTE from the fourth YA.
Apexia can factor the PTE into your tax computation and confirm you are receiving the exemption you are entitled to.