- SUTE exempts 75% of your first S$100,000 and 50% of the next S$100,000 of chargeable income, for three Years of Assessment.
- You must be a Singapore-incorporated, tax-resident company with 20 or fewer shareholders and at least one individual holding 10% or more.
- After year three, you move to the Partial Tax Exemption, and SUTE stacks with the YA 2026 CIT rebate of 50%, capped at S$40,000.
The startup tax exemption Singapore offers can cut a new company’s corporate tax bill to single digits in its first three years. Singapore keeps a flat 17% headline corporate tax rate, yet qualifying new companies rarely pay anything close to that early on. Under the Start-Up Tax Exemption (SUTE), a large slice of your first S$200,000 of profit is exempt each year, freeing up cash for hiring and growth.
Singapore supports founders through generous tax incentives for new companies, helping them grow without heavy tax pressure.
If you’ve just started your business, this tax exemption for new start up companies can help you save thousands in corporate tax during your first few years. Under the Startup Tax Exemption Scheme (SUTE) and Partial Tax Exemption (PTE), eligible companies can legally reduce the amount of tax they pay, keeping more cash for growth, hiring, and investment.
In this guide, we’ll break down:
- What the tax exemption for new start-up companies really means
- Who qualifies and how much you can save
- How to make sure you’re taking full advantage of Singapore’s tax exemption schemes
What is the Start-Up Tax Exemption (SUTE) scheme in Singapore?
The Start-Up Tax Exemption is a relief that lets newly incorporated companies shelter much of their early profit from tax. It was created to encourage entrepreneurship, and IRAS applies it automatically once you file.
Under SUTE, 75% of your first S$100,000 of normal chargeable income is exempt, and 50% of the next S$100,000. That is a maximum exemption of S$125,000 of profit each year. The relief runs for your first three consecutive Years of Assessment.
Normal chargeable income simply means profit taxed at the standard 17% rate. SUTE sits alongside the wider Singapore business tax incentives available to companies, but it is the one that matters most in your opening years.
Who qualifies for the startup tax exemption in Singapore?
Eligibility is stricter than many founders expect. The conditions are tested against your actual shareholding and activity, not just your incorporation date. Meet all of them, and the relief applies automatically.
Your company qualifies if it:
- Is incorporated in Singapore.
- Is a tax resident in Singapore for that Year of Assessment.
- Has no more than 20 shareholders throughout the basis period.
- Has at least one individual shareholder holding 10% or more of the ordinary shares.
Two activities are shut out completely: investment holding and property development. The condition that trips up the most founders is the shareholder test. If a company, rather than an individual, owns your shares, you still need at least one individual holding 10% or more, or the relief is lost. Staying tax-resident in Singapore also means key decisions are made here.
Partial Tax Exemption Singapore after year 3
SUTE only lasts three Years of Assessment. After that, your company moves on to the Partial Tax Exemption (PTE), which every resident company receives with no eligibility test.
After your company’s first three years, the Startup Tax Exemption (SUTE) ends. But you can still enjoy lower taxes through the Partial Tax Exemption (PTE).
The PTE applies to all companies in Singapore and continues every year as long as your business remains active.
Here’s what you get under the PTE:
- 75% tax exemption on the first S$10,000 of taxable income
- 50% tax exemption on the next S$190,000
This means even after your initial three-year startup period, you’ll still benefit from ongoing tax savings that help reduce your overall tax bill.
Common start up tax exemption Singapore mistakes and IRAS compliance tips
While the Startup Tax Exemption Scheme (SUTE) is generous, it’s important to stay compliant so you don’t lose your benefits. Here are a few common mistakes startups should avoid:
- Setting up a company that isn’t really active – The Inland Revenue Authority of Singapore (IRAS) may reject exemptions if your business isn’t trading or generating income.
- Running an investment or property-holding company – These are not eligible for SUTE.
- Not maintaining tax residency in Singapore – Key business decisions should be made locally for your company to remain tax resident.
- Setting up shell companies purely to claim tax exemptions – IRAS actively audits such cases and imposes penalties for abuse of the Startup Tax Exemption Scheme.
- Poor record keeping – Missing invoices, receipts, or unclear accounts can lead to issues during filing or audits.
- Reporting the wrong business start date – Your exemption period is based on when your business actually starts operations, not just when it was incorporated.
Avoiding these mistakes ensures your company stays compliant and continues to enjoy Singapore’s tax benefits.
Your three SUTE years are counted by Year of Assessment, not by how profitable you are. A loss-making or dormant year still uses one of the three, so time to start trading with that in mind.
How does SUTE work with the YA 2026 corporate income tax rebate?
On top of SUTE, Budget 2026 introduced a one-off corporate income tax (CIT) rebate, which IRAS then enhanced on 7 April 2026. The rebate is now 50% of corporate tax payable, capped at S$40,000 in total benefits. The full parameters are on the IRAS rebates and exemptions page.
The rebate applies after your exemption, on the tax that remains. In the worked example above, the S$12,750 of tax is cut by 50% to S$6,375, pulling the effective rate to roughly 3.2%. The two reliefs stack, rather than competing.
Active companies that employed at least one local (Singapore citizen or PR) employee in 2025, excluding shareholder-directors, also receive a S$2,000 cash grant. Both the rebate and the grant are applied automatically when you file.
How do you claim the startup tax exemption in Singapore?
There is no separate SUTE application. The relief is built into your annual corporate tax return, so claiming it correctly is really about filing correctly.
When you file Form C-S or Form C-S (Lite) through the myTax Portal, indicate that the company qualifies as a new start-up, and IRAS computes the exemption for you. Your Estimated Chargeable Income should be reported before the exemption, because IRAS applies the relief itself, as set out in its ECI filing guidance.
Keep your shareholding records, financial statements and start-of-trading date tidy. If your financial year-end is not 31 December, your filing deadline is still 30 November, but your ECI is due within three months of the year-end.
How Sleek helps you claim SUTE correctly from year one
SUTE can be worth tens of thousands in your first three years, but only if your shareholding, residency and filing all line up. Sleek handles incorporation, accounting and your corporate tax filing together, so the exemption is claimed correctly from your very first Year of Assessment, with one team keeping your accounts clean and your Form C-S filed on time.
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FAQs about the startup tax exemption in Singapore
Do I need to apply for the startup tax exemption in Singapore?
No. There is no separate application; IRAS applies SUTE automatically when you file Form C-S or Form C-S (Lite). The one thing to remember is that your Estimated Chargeable Income should be reported before the exemption, as IRAS works out the relief itself.
What happens after the three-year SUTE period ends?
Your company moves onto the Partial Tax Exemption, with no action needed. PTE exempts 75% of the first S$10,000 and 50% of the next S$190,000, up to S$102,500 a year, for as long as the company stays active.
Can a foreign-owned company qualify for SUTE?
Yes, provided the company itself is incorporated and tax-resident in Singapore. A foreign company or its Singapore branch cannot claim SUTE, but a Singapore Pte Ltd owned by foreigners can, as long as it meets the shareholder conditions.
Does the startup tax exemption apply if my company makes a loss?
No, because there is no tax to be exempted in a loss year. That year still counts as one of your three Years of Assessment, so a long pre-revenue period can use up the window before you turn profitable.
Can I claim SUTE and the YA 2026 CIT rebate together?
Yes. The CIT rebate is applied to the tax that remains after SUTE, not to your gross profit. For YA 2026, it is 50% of tax payable, capped at S$40,000, with a S$2,000 cash grant for eligible employers.
