SMEs benefit from the same 17% headline rate as everyone else, but several reliefs materially reduce the effective rate.
The main ones are the exemption schemes. A qualifying new company can claim the Start-Up Tax Exemption (SUTE) – 75% on the first S$100,000 of normal chargeable income and 50% on the next S$100,000, up to S$125,000 – in each of its first three Years of Assessment. Thereafter, and for companies that do not qualify, the Partial Tax Exemption (PTE) exempts 75% of the first S$10,000 and 50% of the next S$190,000, up to S$102,500.
On top of that, the Enterprise Innovation Scheme (EIS) gives enhanced deductions for qualifying R&D, intellectual property and training – 400% on the first S$400,000 per activity per YA for YA 2024 to YA 2028 – with a 20% cash payout option capped at S$20,000 for businesses not yet profitable. The Double Tax Deduction for Internationalisation (DTDi) gives a 200% deduction on qualifying overseas expansion costs. The Government also grants a Corporate Income Tax Rebate in most Budgets.
Note that the older Productivity and Innovation Credit (PIC) scheme lapsed after YA 2018 and is no longer available – the EIS is its successor. Smaller companies meeting the conditions may also file the simplified Form C-S or Form C-S (Lite). Enterprise Singapore separately administers grants such as PSG, EDG and MRA. Apexia can identify which apply to your business.