- Simpler Tax
- Start-up tax exemption
The start-up tax exemption: how much tax do I actually pay on my first profit, worked
A new Singapore company that qualifies gets the start-up tax exemption for its first 3 years of assessment: 75% of the first S$100,000 and 50% of the next S$100,000 of chargeable income are exempt, so up to S$125,000 a year is never taxed, and the 17% rate is charged on the rest. On a first profit of S$150,000.00 the exempt amount is S$100,000.00, the tax is S$8,500.00, 5.7% of the profit, and after the YA 2026 rebate the bill is S$4,250.00, or S$6,250.00 where S$2,000 of the rebate arrives as a cash grant instead of coming off the bill.
The company must be incorporated in Singapore, tax resident in Singapore for the year of assessment, and have no more than 20 shareholders throughout the basis period, either all of them individuals or including at least one individual who holds 10% or more of its issued ordinary shares; property development and investment holding companies are excluded. Everyone else gets the partial exemption, 75% of the first S$10,000 and 50% of the next S$190,000, which on the same S$150,000.00 leaves S$3,825.00 more tax before the rebate.
Computed from the rulebook, checked by hand Edition YA-2027 · sources verified through 24 Jul 2026
The tiers, and the 3-year window
The exemption is two tiers on the chargeable income taxed at the 17% rate, used up in order: the first tier on the first S$100,000, the second on the S$100,000 after that, and nothing on anything above S$200,000. It applies in each of the company's first 3 years of assessment, then stops.
| Chargeable income | Exempt | At most, S$ |
|---|---|---|
| The first S$100,000 | 75% | 75,000.00 |
| The next S$100,000 | 50% | 50,000.00 |
| Maximum, reached at S$200,000 | 125,000.00 |
The window is counted in years of assessment from the company's first one, whether or not there was a profit in it. A company whose first year of assessment is YA 2026 has the exemption for YA 2026, YA 2027 and YA 2028; from YA 2029 it is on the partial tax exemption, 75% of the first S$10,000 and 50% of the next S$190,000, up to S$102,500. Above S$200,000 of chargeable income the exempt amount stays at S$125,000 and every further dollar is taxed at the full 17%. See which year of assessment is your first.
| Year of assessment | Where in the window | Exemption |
|---|---|---|
| YA 2026this season | The first year of assessment | Start-up, 75% of the first S$100,000 and 50% of the next S$100,000 |
| YA 2027 | Inside the window | Start-up, 75% of the first S$100,000 and 50% of the next S$100,000 |
| YA 2028 | The last year in the window | Start-up, 75% of the first S$100,000 and 50% of the next S$100,000 |
| YA 2029 | The window has closed | Partial, 75% of the first S$10,000 and 50% of the next S$190,000 |
The exempt amount is rounded to the whole dollar, and the tax is 17% of the chargeable income after exemption, itself rounded to the dollar, the way the IRAS tax computation does it. Every figure on this page was computed by the engine that way. The three profits worked below are whole hundreds of dollars, so neither rounding moves them. It shows on a profit with cents in it: on S$150,000.50, the tiers come to S$100,000.25 of exemption, which is rounded to S$100,000.00; the chargeable income after it, S$50,000.50, is rounded to S$50,001.00 before the rate; and the tax is S$8,500.17 rather than the S$8,500.09 the cents alone would give.
Who qualifies
Three conditions, all of which must hold for the year of assessment, and two excluded activities.
- Incorporated in Singapore.
- Tax resident in Singapore for the year of assessment.
- No more than 20 shareholders throughout the basis period, either all of them individuals or including at least one individual who holds 10% or more of its issued ordinary shares.
A company whose principal activity is property development or investment holding does not get the exemption even if it meets all three, and is on the partial exemption from its first year. A company limited by guarantee can qualify: the shareholding test is applied to its members instead.
The shareholding test is the one new companies fail without noticing. The cap on the number of shareholders applies whichever route the company takes. If any shareholder is a company, a holding company included, the all-individuals route is closed and the company qualifies only if at least one individual holds 10% or more of the ordinary shares directly. Either way the test has to hold throughout the basis period, not only at the year end.
One caveat on this condition, and it is the rulebook's own. The words above are how Simpler Tax's rulebook reads the shareholding test, sourced from the IRAS Form C explanatory notes; the literal wording of the test has not yet been checked against the dedicated e-Tax Guide for the scheme, and the rulebook says so on its own entry. Everything else on this page is arithmetic the engine computed. If your shareholding is anywhere near either limb, read the guide rather than this sentence.
Three first profits, worked for YA 2026
S$50,000.00, S$150,000.00 and S$300,000.00 of first profit
Three Singapore Pte Ltds in their first year of assessment, YA 2026, each meeting the three conditions and in an ordinary trade, each with a profit that needs no tax adjustment, so item 20 of Form C-S is the profit in the accounts, and each with one local employee on CPF in 2025. Company A has a first profit inside the first tier; Company B has a profit that uses both tiers; Company C has a profit past the top of the bands.
| Step | Company A, S$ | Company B, S$ | Company C, S$ |
|---|---|---|---|
| Chargeable income before exemption (item 20) | 50,000.00 | 150,000.00 | 300,000.00 |
| Exempt: 75% of the first S$100,000 | 75% of 50,000.0037,500.00 | 75% of 100,000.0075,000.00 | 75% of 100,000.0075,000.00 |
| Exempt: 50% of the next S$100,000 | 50% of 0.000.00 | 50% of 50,000.0025,000.00 | 50% of 100,000.0050,000.00 |
| Less: exempt amount (start-up tax exemption) | 37,500.00 | 100,000.00 | 125,000.00 |
| Chargeable income after exemption | 12,500.00 | 50,000.00 | 175,000.00 |
| Tax at 17% | 2,125.00 | 8,500.00 | 29,750.00 |
| As a share of the profit | 4.3% | 5.7% | 9.9% |
| YA 2026 rebate, 50% of the tax, capped at S$40,000 together with the cash grant | 1,062.50 | 4,250.00 | 14,875.00 |
| Of which the cash grant, paid to the company by IRASneeds at least one local employee on CPF in 2025, not counting shareholder-directors | 2,000.00 | 2,000.00 | 2,000.00 |
| Less: rebate taken off the bill | 0.00 | 2,250.00 | 12,875.00 |
| Tax payable | 2,125.00 | 6,250.00 | 16,875.00 |
| As a share of the profit | 4.3% | 4.2% | 5.6% |
Company A keeps S$37,500.00 of its S$50,000.00 out of tax and is taxed S$2,125.00. Its rebate, S$1,062.50, is less than the S$2,000 grant, so nothing comes off the bill: it pays S$2,125.00 and receives S$2,000.00 from IRAS. Company B's S$150,000.00 uses the first tier in full and S$50,000.00 of the second, so S$100,000.00 is exempt and the 17% on the remaining S$50,000.00 is S$8,500.00; S$2,000.00 of its S$4,250.00 rebate arrives as the grant and S$2,250.00 comes off, leaving S$6,250.00 to pay. Company C is past S$200,000, where the exempt amount is the maximum, S$125,000.00, and every dollar above it is taxed at the full 17%.
Without a local employee there is no grant and the whole rebate comes off the bill instead: Company A pays S$1,062.50, Company B pays S$4,250.00, Company C pays S$14,875.00. The relief is the same either way; the grant is the first S$2,000 of it paid in cash. See the YA 2026 rebate, the cap and the cash grant.
Beside the partial exemption
The same three profits run through the engine as a company on the partial exemption, 75% of the first S$10,000 and 50% of the next S$190,000: a company past its first 3 years of assessment, one that fails the shareholding test, or one in an excluded activity.
| Company | Exempt, S$ | After exemption, S$ | Tax at 17%, S$ | Rebate, S$ | Off the bill, S$ | Tax payable, S$ |
|---|---|---|---|---|---|---|
| Company A, S$50,000.00as a qualifying start-up | 37,500.00 | 12,500.00 | 2,125.00 | 1,062.50 | 0.00 | 2,125.00 |
| Company A, S$50,000.00on the partial exemption | 27,500.00 | 22,500.00 | 3,825.00 | 1,912.50 | 0.00 | 3,825.001,700.00 more |
| Company B, S$150,000.00as a qualifying start-up | 100,000.00 | 50,000.00 | 8,500.00 | 4,250.00 | 2,250.00 | 6,250.00 |
| Company B, S$150,000.00on the partial exemption | 77,500.00 | 72,500.00 | 12,325.00 | 6,162.50 | 4,162.50 | 8,162.501,912.50 more |
| Company C, S$300,000.00as a qualifying start-up | 125,000.00 | 175,000.00 | 29,750.00 | 14,875.00 | 12,875.00 | 16,875.00 |
| Company C, S$300,000.00on the partial exemption | 102,500.00 | 197,500.00 | 33,575.00 | 16,787.50 | 14,787.50 | 18,787.501,912.50 more |
At S$300,000.00 both exemptions are at their maximum and the gap is at its widest: S$22,500.00 more is exempt as a start-up, which is S$3,825.00 of tax at 17%. On the bill the difference is smaller, S$1,912.50, because the YA 2026 rebate is 50% of the tax and shrinks with it. Company B is S$3,825.00 of tax and S$1,912.50 on the bill apart; Company A is S$1,700.00 apart on both, because under either scheme its rebate is under the S$2,000 grant and nothing comes off the bill. See the partial exemption at nine income levels.
Simpler Tax's engine counts the window from the company's own first year of assessment: for a company whose first YA was 2023, YA 2026 is the fourth, and the pack computes the partial exemption, S$8,162.50 on S$150,000.00, with a note that the window has closed. Inside the window it asks the two start-up questions, the shareholding test and the excluded activities, before any start-up figure is printed. Unanswered, the pack rests on the partial exemption and says on its cover exactly how much a yes to both would take off the bill, S$1,912.50 on S$150,000.00; a no to either settles it on the partial exemption with the reason on the pack.
Where it sits in the computation, and on the return
The working that turns the profit in your accounts into the profit IRAS taxes: add-backs, capital allowances, exemptions. The exemption is the last step before the rate. Form C-S asks for the chargeable income before the exempt amount, item 20, and has no line for the exemption itself; the ECI estimates the same figure. IRAS applies the exemption, the 17% and the rebate in the assessment, and the notice of assessment shows each of them. See the Form C-S items line by line.
What the return does carry is a declaration. Item 36 in Part C of Form C-S asks whether the company meets the qualifying conditions for the start-up scheme, and the exemption IRAS applies follows that answer. Answer it from the shareholder register for the whole basis period, not from memory, and keep the register with the tax computation. See a new company's first year, every filing and its date.
An incorrect return can cost up to twice the tax undercharged.
The start-up exemption on the Form C-S pack, from your own books
Post the year's documents and the Tax screen issues the Form C-S pack: item 20 from the posted entries, the exempt amount tier by tier, the tax at 17%, the YA 2026 rebate and the net tax to expect on the notice of assessment, each with a copy button. A company inside its first 3 years of assessment is asked the two start-up questions, and the start-up figure is printed only on a yes to both; until then the pack shows the partial exemption with the exact amount the answers are worth. Simpler Tax files nothing.
Download for WindowsQuestions people ask
What is the start-up tax exemption in Singapore?
An exemption on a new company's chargeable income for its first 3 years of assessment: 75% of the first S$100,000 and 50% of the next S$100,000 are exempt, up to S$125,000 a year, and the 17% corporate tax rate is charged on what is left. On S$150,000.00 of profit the exempt amount is S$100,000.00, the tax is S$8,500.00, and after the YA 2026 rebate the bill is S$4,250.00, or S$6,250.00 where S$2,000 of the rebate arrives as a cash grant instead of coming off the bill.
Which years does it cover?
The company's first 3 consecutive years of assessment, counted from its first one. A company whose first year of assessment is YA 2026 has the exemption for YA 2026, YA 2027 and YA 2028, and from YA 2029 it gets the partial tax exemption every company gets, 75% of the first S$10,000 and 50% of the next S$190,000. A year with no profit still uses up a year of the window: the window is counted in years of assessment and reads no figure, so a company that made nothing in its first 3 years has spent the exemption all the same.
Who qualifies?
A company that is incorporated in Singapore, tax resident in Singapore for the year of assessment, and has no more than 20 shareholders throughout the basis period, either all of them individuals or including at least one individual who holds 10% or more of its issued ordinary shares. A company whose principal activity is property development or investment holding is excluded whatever its shareholding. A company limited by guarantee can qualify, on the same test applied to its members.
Do I apply for the start-up exemption, or claim it on Form C-S?
There is no application. Form C-S asks for the chargeable income before the exempt amount, item 20, and has no line for the exemption; IRAS applies it in the assessment. Part C of Form C-S carries a declaration, item 36, that the company meets the qualifying conditions for the scheme, and that is what you answer.
How much tax does a new company pay on S$150,000 of profit?
S$8,500.00 before the rebate, 5.7% of the profit: S$100,000.00 of the S$150,000.00 is exempt and 17% is charged on the remaining S$50,000.00. The YA 2026 rebate is 50% of that tax, S$4,250.00; taken off in full it leaves S$4,250.00 to pay, or S$6,250.00 where S$2,000 of the rebate arrives as a cash grant instead of coming off the bill. The same profit on the partial exemption is taxed S$12,325.00 before the rebate.
My new company is an investment holding company. Do I get it?
No. Investment holding and property development are the two excluded activities, so the company gets the partial tax exemption from its first year: on S$150,000.00 of profit that is S$77,500.00 exempt and S$12,325.00 of tax before the rebate, S$3,825.00 more than a qualifying start-up. Simpler Tax's engine applies the partial exemption in that case and says on the pack which answer decided it.
Does the YA 2026 corporate income tax rebate apply on top?
Yes. The exemption is taken off the chargeable income first, the 17% is charged on what is left, and the rebate is 50% of that tax, capped at S$40,000. A company with a local employee on CPF in 2025, not counting shareholder-directors, receives the first S$2,000 of the rebate as a cash grant and takes the rest off the bill; where the rebate is under S$2,000, as it is for Company A, the grant is the whole relief and the bill is paid in full.
Sources
Statutory figures on this page are read from the Simpler Tax rulebook at build time, edition YA-2027, every source last checked 24 Jul 2026. The rulebook entries named below are the ones this page was computed from; the IRAS pages are what they were verified against.
- IRAS, Corporate income tax rate, rebates and tax exemption schemes
https://www.iras.gov.sg/taxes/corporate-income-tax/basics-of-corporate-income-tax/corporate-income-tax-rate-rebates-and-tax-exemption-schemes - IRAS, Explanatory notes to the YA 2026 Form C (the qualifying conditions and the guarantee-company test)
https://www.iras.gov.sg/docs/default-source/uploadedfiles/pdf/explanatory-notes-to-ya-2026-form-c.pdf - IRAS, Explanatory notes to the YA 2026 Form C-S (Part C, item 36)
https://www.iras.gov.sg/docs/default-source/uploadedfiles/pdf/explanatory-notes-to-ya-2026-form-c-s.pdf - IRAS, Utilisation of unabsorbed items and CIT rebate (the exemption tiers, worked by IRAS)
https://www.iras.gov.sg/docs/default-source/uploadedfiles/pdf/section-4---ca-utilisation-of-unabsorbed-items-and-cit-rebate.pdf - IRAS, Guidance on filing Form C-S / Form C-S (Lite) / Form C
https://www.iras.gov.sg/taxes/corporate-income-tax/form-c-s-form-c-s-(lite)-form-c-filing/guidance-on-filing-form-c-s-form-c-s-(lite)-form-c - Start-up tax exemption tiers, window, conditions and excluded activities rulebook cit.sute
- Partial tax exemption tiers and maximum rulebook cit.pte
- Corporate income tax rate rulebook cit.rate.headline
- YA 2026 corporate income tax rebate, cap and cash grant rulebook cit.rebate.ya2026.enhanced