Singapore Corporate Tax Update 2025: What Your Business Needs to Know

Good news! Budget 2025 has introduced significant tax benefits to help businesses manage cash flow better. Here’s your guide to Singapore’s corporate tax framework for 2025:

The Basics: Corporate Income Tax (CIT) Rate

Singapore maintains its competitive 17% flat corporate tax rate on chargeable income for both local and foreign companies.

What’s New: Enhanced Tax Benefits for 2025

⭐️ 50% Corporate Income Tax (CIT) Rebate

For Year of Assessment (YA) 2025, all taxpaying companies will receive a 50% rebate on corporate tax payable.

⭐️ $2,000 CIT Rebate Cash Grant

Active companies that have employed at least one local employee in 2024 (referred to as “local employee condition”) will receive a minimum benefit of $2,000 in the form of a CIT Rebate Cash Grant. The total maximum benefits of CIT Rebate and CIT Rebate Cash Grant that a company may receive is $40,000.

Who Qualifies for the CIT Rebate Cash Grant?

To be eligible, a company must meet TWO conditions:

1. Be an active company –  meaning it is engaged in business operations and not under liquidation or receivership.
2. Meet the local employee condition – made CPF contributions to at least one local employee (Singapore citizen or PR) in 2024

Important: Shareholders who are also directors don’t count toward this requirement.

✅ At Counto, we prioritise your bottom line. Our expert accountants deliver comprehensive services—from bookkeeping to tax filing—at transparent rates. Explore our all-in accounting plans and keep more of what you earn.

How the CIT Rebates Apply to Your Business

Automatic Processing

Good news – you don’t need to apply! IRAS will:

• Automatically calculate your CIT Rebate when processing your tax returns (do not include the rebate in your ECI or Form C/C-S/C-S (Lite) filings)
• Disburse the CIT Rebate Cash Grant by Q2 2025 if you qualify
• The CIT Rebate Cash Grant is not taxable

Additional Eligibility for Employees Under Centralised Hiring

For companies using centralised hiring or secondment arrangements, employees can still qualify you for the Cash Grant if:

• You can provide documentation showing work arrangements and cost recharging for 2024
• The arrangement exists for legitimate business reasons
• The employee doesn’t count toward headcount at the related company

Processing Timeline

Examples of How CIT Rebates Work

Scenario 1: No Chargeable Income

• Tax payable: $0
• CIT Rebate: $0
• Cash Grant (if eligible): $2,000

Scenario 2: Small Company ($75,000 Chargeable Income) – Not Eligible for Cash Grant

• Chargeable income: $75,000
• Gross tax payable (17%): $12,750
• Less tax set-offs: $750
• Tax payable before CIT Rebate: $12,000
• CIT Rebate (50% of $12,000): $6,000
• Final tax payable: $6,000

Scenario 3: Very Small Company ($17,500 Chargeable Income) – Eligible for Cash Grant

• Chargeable income: $17,500
• Gross tax payable (17%): $2,975
• Calculated CIT Rebate (50%): $1,487.50
• Since this is less than $2,000, no CIT Rebate is given (the company receives the $2,000 Cash Grant separately)
• Final tax payable: $2,975

Scenario 4: Medium-Sized Company ($297,500 Chargeable Income) – Eligible for Cash Grant

• Chargeable income: $297,500
• Gross tax payable (17%): $50,575
• Less tax set-offs: $175
• Tax payable before CIT Rebate: $50,400
• CIT Rebate (50% of $50,400): $25,200
• Less Cash Grant amount: $2,000
• Net CIT Rebate applied: $23,200
• Final tax payable: $27,200

Scenario 5: Company with Mixed Tax Rates (10% & 17%)

• Chargeable Income (10%): $400,000
• Chargeable Income (17%): $497,500
• Gross Tax Payable: $124,575
• CIT Rebate (capped at $40,000, less $2,000 CIT Rebate Cash Grant): $38,000
• Final Tax Payable: $86,575

What You Need to Do

1. Ensure your tax filings are accurate and on time
2. Do not include the CIT Rebate in your ECI or tax return calculations
3. If you qualify but don’t receive your Cash Grant by Q2 2025, email IRAS via myTaxMail by November 30, 2025 with the subject “Appeal for CIT Rebate Cash Grant” (include supporting documents)

Switch to Singapore’s Top-Rated Accounting & Tax Services

Counto is the trusted outsourced provider of accounting, tax preparation and CFO services for startups and SMEs. Get accounting plans that combine bookkeeping with corporate tax filing to help you stay compliant at an affordable price. To learn more, speak to us directly on our chatbot, email [email protected], or use our contact form to get started.

Here are some articles you might find helpful:

Filing requirements for Pte Ltd companies 

Do I need to register for GST?

ECI filing