Singapore Extends Zero Tax For New Companies Setup Permanently

PR Log (Press Release) – Oct 06, 2009 – Under the current start-up exemption scheme, a newly incorporated company can claim full tax exemption on the first S$100,000 of chargeable income and 50% exemption for next S$ 200,000 of chargeable income. A company that qualifies should have been incorporated and tax resident in Singapore, and have no more than 20 shareholders of which at least one individual holds at least 10% of total number of issued ordinary shares. The full tax exemption is available for the first 3 consecutive Years of Assessment.
The Minister has proposed the start-up exemption scheme to be extended to companies limited by guarantee, subject to same conditions imposed on companies limited by shares, with effect from Year of Assessment 2010.
TEMPORARY ENHANCEMENT OF CAPITAL ALLOWANCE REGIME
Under the current regime capital expenditure incurred on provision of plant and machinery for the purpose of a trade, profession or business, is granted capital allowance over a three year period on a straight line basis.
The Minister has proposed accelerated capital allowance for capital expenditure incurred on plant and machinery acquired in the basis years 2009 and 2010 respectively. Under this proposed change, capital expenditure incurred on plant and machinery acquired for the purpose of trade, profession or business can be written down within two years and 75% of the writing down can take place in the first year.
The proposed changes would not affect the current rules on the one year writing down allowance in case of certain types of computerised and automated equipment as well as assets worth less than $1,000 (subject to a cap of S$30,000 per annum).

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