Tax Planning

Tax planning is an exercise carried out by both companies and individuals to minimize tax liability. In Singapore, this strategy is not very easy to undertake because of the strict tax compliance regulations put in place by the IRAS (Inland Revenue Authority of Singapore). But even with such restrictions, big companies are still able to practice tax planning, primarily because they have expert staff and departments that can deal with any tax matters.

Achieving Corporate Objectives through Proper Tax Planning
Successful corporations today have acknowledged that corporate taxation is a vital aspect in any business operation. Coming up with an effective tax strategy is as important as formulating strategies to meet marketing, financial, R & D, supply chain, and production goals. This has become more so with the advances in technology and the trends towards globalization.

Impact of a Corporate Tax Strategy
An inefficient tax strategy will definitely have a huge impact on the overall operation of any company. Its effect may not only be felt in the profitability of the company but may include the relationship with the investors as well as the host country. While having a proper tax strategy applies to all countries, this becomes more significant in Singapore wherein financial activity may be considered as very dynamic and can be very competitive. Singapore has been considered a financial hub not just in the Asian region but on a global scale. It has implemented a taxation program that can truly be advantageous for any company with a viable tax strategy.

Benefiting from Singapore’s Generous Tax Incentives
Aside from having one of the most reasonable taxation systems in the world, Singapore offers a number of tax incentive schemes that are very attractive to businesses. When fully maximized, these tax credits can contribute a lot to the overall earning power of any company.

Examples of these tax incentives are the following:

  • Start-up Tax Exemption
  • Partial Tax Exemption
  • Productivity and Innovation Credit Scheme
  • International/Regional Headquarters Award
  • Land Intensification Allowance
  • Integrated Investment Allowance
  • Mergers and Acquisitions Scheme
  • Pioneer Incentive
  • Development and Expansion Incentive
  • Finance and Treasury Centre Tax Incentive
  • Aircraft Leasing Scheme
  • Research Incentive Scheme
  • Initiative in New Technology

Making the Most of Singapore’s Tax Credits
As demonstrated by countless companies operating in Singapore, huge savings can be realized when availing of these tax incentives which translate to higher profit margins. Increased earnings will definitely be a boost to business and bodes well for the investors. What is required is a keen understanding and in-depth knowledge of Singapore’s taxation system which is then incorporated into a viable tax strategy. This may not really pose a huge problem for businesses since they can always avail of the assistance offered by various entities that focus in this highly-specialized field.

The Need for Assistance in Tax Planning and Tax Strategy Formulation
Whatever type of tax planning method you take, you need to have a good grasp of the tax laws of the city state. If done incorrectly, this may lead to fines or even criminal conviction. And on the positive side, the proper tax planning, especially for business, may mean big financial benefits. That’s why it is important to rely on professionals to do tax planning for you.