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Singapore Offers 50% Corporate Income Tax Rebate and Cash Grant for YA 2025 to Ease Business Costs
In a move aimed at supporting businesses amid global economic uncertainties, Singapore’s Ministry of Finance has announced a 50% Corporate Income Tax (CIT) Rebate for all companies—both local and foreign—on taxes payable for the Year of Assessment (YA) 2025. This rebate, unveiled in Budget 2025, underscores the government’s commitment to easing cash flow pressures on businesses.
What’s New: CIT Rebate and Cash Grant
Companies will automatically enjoy a 50% rebate on their corporate tax payable, capped at S$40,000. In addition, active companies that meet the local employee condition—that is, having made CPF contributions for at least one Singaporean or Permanent Resident employee (excluding shareholder-directors) in 2024—will be eligible for a CIT Rebate Cash Grant of at least S$2,000.
The cash grant specifically targets smaller firms that might not benefit substantially from the CIT Rebate due to lower tax liabilities. It will be disbursed by Q2 2025 without requiring separate applications, offering timely support to companies with active trade operations in Singapore.
Eligibility and Conditions
To receive the cash grant:
- The company must be active, i.e., carrying on trade or business in 2024.
- It must not be under liquidation or receivership.
- It must meet the local employee condition.
Notably, staff deployed under centralised hiring or secondment arrangements may count toward this requirement, provided specific documentation is in place to show cost recharges and work arrangements.
Companies that qualify but do not receive the cash grant by mid-2025 can appeal via myTaxMail by 30 November 2025, with supporting documents.
New Start-Up and Partial Tax Exemption Schemes
Singapore continues to offer tax relief through two key schemes:
1. Tax Exemption for New Start-Ups (First 3 YAs)
Eligible start-ups can enjoy:
- 75% exemption on the first S$100,000 of chargeable income.
- 50% exemption on the next S$100,000.
This amounts to a maximum exemption of S$125,000 per YA (for YA 2020 onwards).
To qualify, companies must:
- Be incorporated in Singapore.
- Be tax resident in Singapore.
- Have up to 20 shareholders, at least one of whom holds ≥10% of issued ordinary shares.
However, investment holding companies and property developers are excluded.
2. Partial Tax Exemption (PTE) for All Other Companies
From YA 2020 onwards, all companies not qualifying for the start-up scheme—including foreign branches—may receive:
- 75% exemption on the first S$10,000 of chargeable income.
- 50% exemption on the next S$190,000.
This provides a maximum annual exemption of S$102,500.
Crackdown on Abuse
Authorities have reiterated strict enforcement against abuse of tax schemes, warning that setting up shell companies to siphon profits for tax exemptions is a serious offense. Over 300 companies have been audited, leading to S$25 million in recovered taxes and penalties.
IRAS has emphasized it will pursue such cases rigorously, including potential criminal charges.
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