Small and medium enterprises or SMEs are often seen as irrelevant when compared to multinational companies in terms of their contribution to the country's economy. In Singapore, on the other hand, SMEs are the backbone of the economy, as they contribute more than 90 percent to economic growth. This is the main reason the Singapore government offers several grant programs and tax incentives to help businesses thrive. The following are some of the tax incentive programs currently being run by the government.
5% grant for SMEs:
Cash grants are one-time cash grants that are also non-taxable and are awarded to eligible SME companies. These enterprise Singapore development grants via https://www.promo2asia.com/funding focus on helping businesses offset high labor costs, especially during times of economic crisis. The grant is set at 5% of the company's total sales with a cap of $5,000.
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To calculate the total grant, companies must state their income for the year and multiply by 5%. The company receives a total amount or limit of $5,000 if the total amount exceeds the limit. Businesses need to spread their earnings when two periods are covered to maintain equality for the two periods.
Tax exemption for start-up and start-up businesses:
For startups, the Singapore government under Singapore Internal Revenue Management (IRAS) allows these companies to apply for full tax exemption for their first year. This exemption is open to all companies registered in the country and having less than 20 shareholders. Eligible companies are companies that do business in real estate investment and development but are eligible for a partial tax exemption of up to 20% by the government.