Corporate Tax Filing Season 2020 (Issue 2)
Taxable and Non-Taxable Income
Taxable income is income that is subject to tax. Income 'accrued in' or 'derived from’ Singapore as well as income received from outside Singapore is taxable.
What is Taxable Income
For Singapore tax purposes, taxable income refers to:
- gains or profits from any trade or business;
- income from investment such as dividends, interest and rental;
- royalties, premiums and any other profits from property; and
- other gains that is revenue in nature.
Deductions such as business expenses, capital allowances and reliefs can be claimed to reduce taxable income, which leads to lower taxes.
When Income is Taxable Income
A company is liable to pay tax in Singapore on income that is:
What is Non-Taxable Income
- accrued in or derived from Singapore; or
- received in Singapore from outside of Singapore.
Capital gains are not taxable. Examples of these are:
- gains on sale of fixed assets; and
- gains on foreign exchange on capital transactions.