While the U.S. managed to not raise its federal income tax rates this time around, taxes and fees are rising across the country in states and cities. And you know more is on the way. Meanwhile, the already low-tax country of Singapore is lowering taxes again. It didn’t take protests in the streets to get it done either, the government thought it was the smart thing to do. Sovereignman.com has the details:
Individual income tax rates, which are already among the lowest in the developed world, are being cut. For example, income in the range of S$80,000 to S$120,000 (S$ is the Singapore dollar… this is roughly $65,000 to $95,000 USD) will now be taxed at a marginal rate of just 11.5%, down from 14% before.
For companies, corporate profits below S$100,000 (roughly $80,000 USD) under the old rate schedule were not taxed. This is still the case… and one of the reasons why Singapore is such an attractive draw to entrepreneurs– because, for a startup, those initial profits are incredibly important.
The next S$200,000 in profits (roughly $160,000 USD) used to be taxed at 8.5%. This has been cut to 6.8% under the new scheme, so the effective tax rate on roughly the first $240,000 USD is only 4.5%. Pretty reasonable.
The next S$194,118 in profits (roughly $154,000 USD) used to be taxed at 17%; this has now dropped to 13.6%… and finally, all profits above S$494,118 (about $392,000 USD) are taxed at 17%.
As corporate profit tax schemes go, this is incredibly low. A company with roughly $400,000 (USD) in profits would have an effective tax rate of just 8%, and a company with $1 million (USD) in profits would pay an effective tax rate of just 13.5%.
Singapore has also made new allowances in how businesses can deduct expenses through the “Product and Innovation Credit (PIC) Scheme.” The PIC Scheme allows businesses to deduct up to 400% of the actual expense for things like research and development, design, acquisition of intellectual property rights, etc.
Does any reader live in Singapore, or visited? We like to hear more.