Start-Up Tax Exemption in Singapore: Who Qualifies and How Much You Save

Accounting Solutions Singapore Editorial Team · Last reviewed 1 October 2026

A new Singapore company can pay far less tax on its first profits. The Tax Exemption Scheme for New Start-Up Companies (SUTE) exempts part of your chargeable income for your first three years of assessment. Below: the rates, who qualifies, a worked example against the partial exemption every other company gets, and what to check.

At a glance

The rates

For each of the first three YAs, a qualifying company gets:

• 75% exemption on the first S$100,000 of normal chargeable income, and
• 50% exemption on the next S$100,000 of normal chargeable income.

Normal chargeable income is the income left after allowable deductions, excluding income taxed at concessionary rates. Anything above S$200,000 is taxed in full.

Older articles quote “100% on the first S$100,000 and 50% on the next S$200,000”. That applied up to YA 2019 and is no longer the scheme.

Who qualifies

All of these must be true for the YA:

1. Incorporated in Singapore.
2. Tax resident in Singapore for that YA.
3. Shareholder test. Throughout the basis period, the company’s total share capital is beneficially held directly by no more than 20 shareholders, and either all of them are individuals, or at least one individual holds at least 10% of the issued ordinary shares.
4. Not an excluded business. Investment holding as the principal activity, or property development for sale, investment or both, rules the company out.

For a company limited by guarantee, the equivalent test is that all members are individuals, or at least one individual contributes at least 10% of total member contributions.

The shareholder test is applied each YA, so a change in shareholders during the year can cost you the exemption for that year.

Which are your “first three years”?

Your first YA is the YA that relates to the basis period in which the company was incorporated. The three YAs run consecutively from there, so the clock does not pause if you have a quiet year or make a loss.

Example (illustration only)

ABC Pte Ltd, incorporated in Singapore, fully owned by two individuals, trading in consulting. Normal chargeable income in its first YA is S$150,000. We compare the start-up exemption with the partial exemption, before any rebate.

In this example the start-up exemption saves S$3,825 for the year.

For reference, IRAS’s own examples show the same arithmetic: on chargeable income of S$121,200 the SUTE exemption is S$75,000 + S$10,600 = S$85,600, and the maximum partial exemption is S$102,500 (S$7,500 + S$95,000).

Other reliefs that can apply on top

The corporate income tax (CIT) rebate for YA 2026 is 50% of tax payable. Companies that are active and made CPF contributions in 2025 for at least one local employee (a Singapore Citizen or PR, excluding a shareholder who is also a director) get a minimum S$2,000 CIT Rebate Cash Grant. The total of rebate and cash grant is capped at S$40,000. Rebates are announced Budget by Budget and change, so check the IRAS page for the year you are filing.

Questions we get asked

Do I need to apply for the exemption? The IRAS Form C and Form C-S explanatory notes set out the conditions, and the exemption is worked out in the tax computation you file. Your preparer should confirm the claim in the filing.

Does a loss year count as one of my three years? Yes. The three YAs are consecutive from the first YA.

What if I have corporate shareholders? A company can still qualify if at least one individual holds at least 10% of the issued ordinary shares, and the no-more-than-20-shareholders limit is met. Check the full test above, as the rule is applied on beneficial holding.

I don’t qualify. Am I left with nothing? No. The partial tax exemption (75% of the first S$10,000 and 50% of the next S$190,000) is available to companies that don’t get SUTE.

Which form do I file? Form C-S if revenue for the period is S$5 million or below and the other Form C-S conditions are met; otherwise Form C. See our corporate tax page for how filing works, and our company incorporation page if you are still setting up.

Sources

• IRAS, Corporate income tax rate, rebates and tax exemption schemes
• IRAS, Explanatory Notes to YA 2026 Form C and Form C-S

This is general information, not professional advice for your specific situation. Rates, rebates and conditions can change, so confirm them on IRAS before relying on them.