Corporate Taxation – Singapore Vs Hong Kong

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A key determinant for establishing a enterprise in a given jurisdiction is the tax regime in energy. On this regard, every Hong Kong and Singapore boast of being one among many lowest tax jurisdictions on the earth. Detailed underneath is a comparative overview of the tax system in Singapore Vs HK.

Tax jurisdiction

Singapore

• Taxes are levied on a territorial principle i.e. companies and persons are taxed on Singapore sourced income.
• Abroad sourced income (division earnings, dividends, service income, and so forth.) is perhaps taxed when it is remitted or deemed remitted into Singapore besides the income was already subjected to taxes in a jurisdiction with headline tax expenses of a minimal of 15%.

Hong Kong

• Taxes are levied on the territorial principle i.e. solely on income “derived from or arising in” HK and by no means on income sourced open air the SAR.
• No tax is levied on earnings arising abroad, even after they’re remitted to Hong Kong.

Firm Tax Value

• Singapore: Current firm income tax charge – 18%. However, firm income tax charge environment friendly 2010 – 17%. Observe: The environment friendly tax charge is manner lower – underneath 9% for earnings as a lot as SGD 300,000 and capped at 18% for earnings above SGD 300,000
• Hong Kong: Current firm income tax charge – 16.5%

Objects and Firms Tax (generally called VAT/Product sales tax in numerous worldwide places)

• Singapore: 7%
• Hong Kong: Nil

Capital constructive components tax

• Singapore and Hong Kong: Nil (Capital loss payments are correspondingly not allowed as deductions)

Group help for losses

• Singapore: Allowed
• HK: Not allowed

Withholding tax

• Singapore: Curiosity, royalties, leases from movable properties, administration and technical expenses, and director’s expenses paid to non-residents (folks or companies) are matter to withholding tax. There’s no withholding tax levied on dividends. 
• Hong Kong: Royalties, leases from movable properties, and expenses paid to non-resident entertainers or sportsmen for his or her performances in Hong Kong are matter to withholding tax. There usually are not any withholding taxes levied on dividends and curiosity.

Double Tax Agreements

• Singapore: Larger than 50 bilateral full tax treaties
• HK: DTA neighborhood of 37 treaties

Tax Yr

• Singapore: 1 January – 31 December
• HK: 1 April – 31 March

Submitting tax returns

Singapore:

• Tax returns along with audited accounts must be filed with the Inland Revenue Authority of Singapore by 31 October yearly.
• Observe: Dormant companies (i.e no accounting transactions for the financial 12 months) and exempt private companies (not more than 20 shareholders and shares aren’t held by one different agency) with an annual turnover of decrease than SGD 5 million are exempt from audit requirements and would possibly file unaudited accounts.

Hong Kong

• Tax returns along with audited accounts must be filed with the Inland Revenue Division by 31 April yearly. The auditor must be a member of the HK Institute of Licensed Public Accountants and will keep a working in the direction of certificates.
• Observe: Dormant companies (i.e no accounting transactions for the financial 12 months) and small corporations (i.e entire gross income does not exceed HKD 500,000) are exempt from audit requirements and would possibly file unaudited accounts.  

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Source by Susan Jain