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Written by: Christopher Chitty 

Singapore is an attractive destination for foreign investors and companies to set up because of its low hassle and zero restriction policies. As a result, the island sees a fair share of enterprising and established organizations setting up bases of operation on its tropical shores annually.

However, despite its attractive low tax policies, companies are not totally exempt from paying it.

If you own or rent property to conduct your business, you will have to pay annual property tax.  The percentage amount differs between owner-occupied residential property and all other properties.

If you are setting up an office in your home, you will need to pay owner-occupied residential tax.

This is established as 0% for the first $6,000 of Annual Value, 4% for the next $59,000 of Annual Value and 6% for the balance of Annual Value in excess of $65,000. For a better understanding of this, head over to the IRAS site.

Understand that you are required by Singapore Law to personally own and inhabit the property in order to take advantage of this tax.

All other properties such as office buildings will have a payable property tax rate of 10%. This includes all industrial, commercial and let-out residential properties. If a building is demolished, the price of the land will be assessed at 5% of its market price.

A building will only be exempted from property tax if it is exclusively used for purposes promoting the social development of Singapore, charity, as a public school and a public place of worship,

All tax is payable on the 31st of January every year and the amount payable will be computed by IRAS. The bill will be sent in December.  

This property tax is a percentage of the annual value (AV) of the property. The AV is tabulated from the estimated yearly rate the property can fetch if it were rented out.

The government provides rebates, reliefs and refunds to property owners should they meet certain criteria not only to help keep taxes affordable but to encourage further investments in the future.

For more information on the type of rebates and reliefs available, IRAS has a comprehensive guide relating to them on their site.

If you are interested in establishing a presence in South East Asia through Singapore, you can start by reading our guides on Starting a Business in Singapore, Starting up in Singapore for Foreign Companies, SMEs in Singapore and 8 considerations before buying commercial space
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