The tax exemption scheme for new start-up companies was introduced in Year of Assessment (YA) 2005 to support entrepreneurship and help our local enterprises grow.
As other support for companies to build capabilities is being strengthened, it was announced in Budget 2018 that the tax exemption under the scheme will be revised. The changes will take effect from YA 2020 for all qualifying companies that claim the tax exemption under the scheme.
With the changes, qualifying companies will be given the following tax exemption for the first three consecutive YAs where the YA falls in:
YA 2020 onwards
- 75% exemption on the first $100,000 of normal chargeable income*; and - A further 50% exemption on the next $100,000 of normal chargeable income*.
YA 2019 and before
- Full exemption on the first $100,000 of normal chargeable income*; and - A further 50% exemption on the next $200,000 of normal chargeable income*. *Normal chargeable income refers to income to be taxed at the prevailing corporate tax rate.
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