Tax Planning

Tax Services

We help companies properly handle Singapore and cross-border tax affairs, reduce risks, and achieve compliant tax savings. Our services include:

Corporate Income Tax (CIT)

Standard tax rate: 25%.
Preferential tax rate: A preferential tax rate of 15% applies to key high-tech enterprises supported by the state and qualified technologically advanced service enterprises. Enterprises in encouraged industries located in specific regions (such as the Hainan Free Trade Port and the Western Development Area) can also enjoy a 15% preferential rate. In addition, qualified small and micro-profit enterprises can enjoy even lower effective tax rates.
Filing mechanism: Calculated annually, with monthly or quarterly prepayments, and annual tax settlement completed by May 31st of the following year.

Withholding Tax (WHT)

This is a tax concern unique to foreign-invested enterprises. When a foreign-invested enterprise in China remits profits/dividends, interest, rent, royalties, or gains from property transfers to its overseas parent company (a non-resident enterprise), the domestic enterprise is required to withhold and pay withholding income tax on its behalf.

Standard Tax Rate: The statutory tax rate is 10%.
Treaty Benefits: If the foreign investor’s country (or region) has signed a Double Taxation Avoidance Treaty (DTA) with China and meets the “beneficial owner” requirement, the tax rate can be reduced to 5% or even exempted. Furthermore, if a foreign investor reinvests distributed profits directly in China, it can enjoy deferred taxation (temporarily exempt from withholding income tax) if certain conditions are met.

Value-Added Tax (VAT)

Value-added tax (VAT) is a turnover tax levied on the added value generated in the production, circulation, and provision of goods and services.

General taxpayers: A system of input tax credit is implemented. Applicable tax rates are divided into three tiers: 13% (sales of goods, services, leasing of tangible movable property, etc.), 9% (transportation, construction, real estate, basic telecommunications, etc.), and 6% (finance, modern services, consumer services, etc.).
Small-scale taxpayers: The standard collection rate is 3% (the government often issues temporary reductions to 1% or exemptions based on macroeconomic conditions).

Surtaxes

Foreign-invested enterprises are required to pay the following three additional taxes and fees based on their actual tax payments when paying value-added tax and consumption tax:

Urban Maintenance and Construction Tax: The tax rate varies depending on the location of the enterprise, ranging from 7% (urban areas), 5% (county towns/towns), or 1% (other areas).
Education Surcharge: 3%.
Local Education Surcharge: 2%.

Individual Income Tax (IIT)

Although companies do not bear the tax burden, as the legally mandated withholding agent, they are required to withhold and remit individual income tax on behalf of both foreign and Chinese employees when distributing wages and salaries each month. Comprehensive income is subject to a seven-tier progressive tax rate ranging from 3% to 45%. Foreign nationals may enjoy tax-free benefits under specific conditions (such as housing subsidies and children’s education expenses).

MSMC ASIA

#19-06 160 Robinson Rd, SBF Center, Singapore 068914