Singapore's Tax System Overview in 2025

Singapore maintains a robust and transparent tax regime grounded in the territorial principle, meaning that income earned within Singapore or remitted from overseas is subject to taxation. Only foreign-sourced income that qualifies under specific exemptions is excluded from tax liability. This framework supports Singapore’s position as a leading global business hub by ensuring clarity and predictability for both local and international enterprises.

Corporate Income Tax

In 2025, Singapore continues to apply a flat corporate tax rate of 17% across all businesses, regardless of ownership structure. This unified policy applies equally to domestic companies, foreign entities operating locally, and branches of multinational corporations. Notably, capital gains are not taxed, and businesses can carry forward losses indefinitely—offering long-term financial flexibility. Entities with taxable income originating in Singapore must file returns annually, reinforcing compliance while supporting growth-oriented strategies.

Personal Income Tax

Taxpayers are classified as either residents or non-residents based on their stay and employment status. Resident individuals—including citizens, permanent residents, and foreign professionals staying more than 183 days—benefit from progressive tax rates ranging from 0% to 24%, along with various reliefs and rebates. In contrast, non-residents face a flat rate of up to 24% on Singapore-sourced income and do not qualify for personal tax allowances, emphasizing the importance of residency planning for expatriates.

Goods and Services Tax (GST)

The Goods and Services Tax, equivalent to a value-added tax, remains at 8% in 2025. Businesses with annual taxable revenue exceeding SGD 1 million are required to register for GST. This ensures broad-based collection while minimizing administrative burden on smaller enterprises. Additionally, digital service providers based overseas—such as streaming platforms and cloud software vendors—must also register and collect GST if they meet transaction thresholds, aligning with global trends in digital economy taxation.

Property Tax

All real estate, including land, buildings, and residential units, is subject to property tax. Owner-occupied homes enjoy preferential rates starting below 10%, whereas investment properties and commercial assets face higher assessments based on annual value. This differentiated approach encourages home ownership while managing speculative activity in the housing market.

Stamp Duty

Stamp duty applies to legal instruments related to property transfers and share transactions. Rates vary depending on the nature of the document and parties involved—for example, additional buyer’s stamp duty (ABSD) may apply to foreign purchasers of residential real estate, influencing cross-border investment decisions.

Digital Tax Framework

Since 2020, offshore digital service providers meeting prescribed criteria have been required to register under the GST regime and charge 8% tax on supplies made to Singaporean consumers. This measure ensures a level playing field between local and international tech firms and reflects Singapore’s proactive stance in adapting tax systems to digital transformation.

Carbon Tax

To support climate goals, Singapore imposes a carbon tax on industrial facilities emitting 25,000 tonnes or more of CO₂-equivalent annually. The current rate stands at SGD 5 per tonne of greenhouse gas emissions. With plans to increase this significantly over the next decade, businesses are incentivized to adopt cleaner technologies and improve energy efficiency. Revenue from the tax funds sustainability initiatives and green innovation grants.

For companies expanding into Southeast Asia, navigating these regulations efficiently is key. SailGlobal offers expert overseas human resources and compliance advisory services, helping international firms establish payroll, manage work permits, and ensure full alignment with local tax and labor laws.