Corporate tax exemptions and partial-exemption scheme — Costs and fees breakdown

The corporate tax exemptions and partial-exemption scheme can cut a Singapore company’s effective tax rate well below the 17% headline. Qualifying new companies pay little or no tax on their first S$100,000 of chargeable income for three years. This 2026 guide breaks the reliefs and the numbers down.

Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.

What the corporate tax exemptions and partial-exemption scheme cover

Singapore charges corporate income tax at a flat 17%, but two reliefs reduce the real burden. The Start-Up Tax Exemption (SUTE) helps qualifying new companies in their first three years of assessment, while the Partial Tax Exemption (PTE) applies to all other companies. Both are administered by the Inland Revenue Authority of Singapore.

The numbers: SUTE and PTE thresholds

Under SUTE, a qualifying company enjoys 75% exemption on the first S$100,000 of normal chargeable income and a further 50% exemption on the next S$100,000, for each of its first three consecutive years of assessment. Under PTE, companies get 75% exemption on the first S$10,000 and 50% on the next S$190,000. On top of these, IRAS has in recent years granted a corporate income tax rebate — check the current year’s rebate cap before filing at www.iras.gov.sg.

Who qualifies for the start-up exemption

SUTE is available to a company that is incorporated in Singapore, is tax-resident here, and has no more than 20 shareholders of whom at least one individual holds at least 10% of the shares. Property and investment holding companies are excluded. If your family-office or holding structure sits outside SUTE, the BEPS Pillar Two and 15% Multinational Top-up Tax — Costs and fees breakdown explains the alternative incentive routes.

Costs and fees breakdown for claiming the reliefs

The exemptions themselves are free — they are claimed in the annual Form C-S/C. The cost is the compliance work:

• Annual unaudited financial statements: S$800–S$2,500
• Corporate tax computation and Form C-S filing: S$600–S$1,500
• Estimated Chargeable Income (ECI) filing: often bundled, S$150–S$400

A small trading company typically spends S$1,500–S$4,000 a year on the accounting and tax work that supports the claim.

The statutory basis

The exemptions are grounded in the Income Tax Act 1947, which provides for the exemption of specified amounts of chargeable income for qualifying companies. The Accounting Standards Council frameworks govern the financial statements that feed the computation — www.acra.gov.sg.

Step-by-step: turning the relief into cash

1) Confirm SUTE or PTE eligibility. 2) Prepare compliant financial statements. 3) File ECI within three months of financial year-end. 4) Prepare the tax computation applying the exemption bands. 5) File Form C-S/C by 30 November. Foreign staff you employ have their own pass and payroll obligations — see EntrePass Singapore 2026: A Founder’s Walkthrough. For a broader overview of ongoing tax and accounting compliance, our Corporate tax exemptions and partial-exemption scheme — Step-by-step walkthrough is a useful reference.

Common mistakes and gotchas

Watch for: claiming SUTE on an investment holding company (disallowed); missing the ECI deadline (which forfeits instalment options); and forgetting that SUTE only runs for the first three years of assessment, after which PTE applies. Companies also err by not counting the year of incorporation correctly.

A worked example: the tax on a growing start-up

Take a qualifying start-up with S$200,000 of chargeable income in its first year of assessment. Under SUTE, 75% of the first S$100,000 is exempt (S$75,000 exempt) and 50% of the next S$100,000 is exempt (S$50,000 exempt), leaving S$75,000 taxable at 17%, or about S$12,750 before any rebate. Compare a mature company with the same income under PTE: 75% of the first S$10,000 and 50% of the next S$190,000 are exempt (S$102,500 exempt), leaving S$97,500 taxable, or about S$16,575. The start-up relief is worth several thousand dollars a year in its early life.

Interaction with the corporate income tax rebate

Beyond the exemptions, IRAS has in several recent years announced a corporate income tax rebate with a cash-grant floor for active companies that employ staff. Because the rebate and its cap change from year to year, treat it as a separate line item to confirm each filing season rather than a permanent feature. It stacks on top of the SUTE or PTE relief, further lowering the effective rate.

Keeping the relief defensible

To sustain a SUTE claim, keep clean records showing the shareholding structure (no more than 20 shareholders, at least one individual with 10% or more), the company’s tax residency, and that it is not an investment holding or property development company. If the shareholding changes or the business pivots into investment holding, revisit eligibility before the next filing.

Related guides

Read next: BEPS Pillar Two and 15% Multinational Top-up Tax — Costs and fees breakdown; EntrePass Singapore 2026: A Founder’s Walkthrough; Corporate tax exemptions and partial-exemption scheme — Step-by-step walkthrough.

Authority resources

Confirm the current rules and fees directly with the relevant Singapore authorities: www.iras.gov.sg, www.acra.gov.sg.

FAQs

How much can a start-up save?
With 75% exemption on the first S$100,000 and 50% on the next S$100,000 of chargeable income, a qualifying start-up can pay a very low effective rate for its first three years of assessment.

What is the difference between SUTE and PTE?
SUTE is a more generous relief for qualifying new companies in their first three years; PTE is the standard exemption for all other companies.

Can an investment holding company claim SUTE?
No. Investment holding companies and property developers are specifically excluded from the start-up exemption.

When must I file the corporate tax return?
The annual Form C-S/C is due by 30 November, and ECI within three months of the financial year-end.

Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.