How is my branch office taxed in Singapore?
A branch office is taxed at the standard corporate tax rate in Singapore once every financial year. This rate is 17%. However, unlike companies that have been registered in Singapore, branch offices will not benefit from any tax incentives because they are considered non-tax residents.
Branch offices are not tax residents because their control and management takes place somewhere other than Singapore. The phrase “control and management” refers to decisions made regarding corporate and strategic matters related to the company. Such decisions are usually made by the members of the company’s board of directors during meetings.
Regardless of whether your company is a tax resident or non-tax resident, we at Paul Hype Page & Co will ensure that you pay as little tax as Singapore’s laws will allow. Our tax planning team will see to it that your tax burden will be reduced by as much as possible.
Since the management of the branch office is situated outside Singapore, it is the parent company’s responsibility to appoint a local agent who will communicate with the authorities about matters related to the payment of taxes.
Although a branch office is not required to file the same accounting documents as a local incorporation, the parent company is obligated to send to its Singapore branch:
- copies of the financial accounts for the year of assessment
- documents related to the financial accounts filed with the tax authorities in the country of origin of the branch office
- All the paperwork must be sent no later than two months after the annual general meeting (AGM) of the parent company.
The branch office must also file an ECI form which provides information on the branch office’s income generated in Singapore. The Singapore branch office must also have its accounts audited by a chartered accountant. Singapore branch offices are required to file a tax return on an annual basis.