Browsed by
Tag: Tax Law

Stimulate Economic Growth

Stimulate Economic Growth

Recently, special attention is paid to economic policies pursued by Singapore. On the basis of objective indicators, Singapore continues to strengthen its position as "the best country for business" (this status was granted to him in 2009, the World Bank (WB) and International Finance Corporation (IFC). Thus, the country's budget, submitted in 2010, focused on building new opportunities for economic growth through tax incentives for citizens and legal persons, while groups with low and middle income countries will be given additional protection. As was announced by the Minister of Finance of Singapore Tharmanom Shanmugaratnamom, the government provides substantial tax breaks to companies investing in innovation and production, requiring the participation of highly qualified personnel, by reducing the effective tax rates, providing tax incentives, grants and subsidies for training and staff training. It is worth noting that the development of business through tax incentives for Singapore is engaged for the past 10 years, gradually reducing the tax rate on corporate profits (if in 2001 it was 25.5% in 2010 – 17%), providing companies with tax exemption on income within the first 3 years of activity (for example, in the first year company may get 100% exemption for the first 100 000 Singapore dollars, 50% release at 200 000 Singapore dollars in the second and third years). For more information see Wells Fargo Bank.

At the same time, numerous agreements on avoidance of double taxation in combination with exemption from taxation of income earned outside Singapore, Singapore made attractive for international business. Special attention is paid to the Government of Singapore inflow of foreign workforce. Many writers such as Robert Kiyosaki offer more in-depth analysis. Since 2004, Singapore has a program to attract foreign businessmen, according to which the foreign citizen, subject to meeting certain requirements (regarding education, work experience), could relatively easily get a work visa. This was one of the tricks of Singapore in an effort to become a regional business center and attract the best business and entrepreneurial minds in the country. Since 2010 increased fees for regulating the flow of labor. In general, for all three years, the overall increase in fees will amount to about 100 Singapore dollars per employee in manufacturing and services.

The Government of Singapore also encourages the deal to change the corporate structure by promoting mergers and acquisitions. Five-year scheme will be introduced to provide one-time tax benefit to help defray costs of organizing the mergers and acquisitions. Allowance will be 5% of the value of the transaction, but will be limited to 5 million Singapore dollars a year. For such transactions will be abolished stamp duty levied for the transfer of shares, not Listed on the Stock Exchange. This rule will apply to transactions whose value does not exceed 100 million Singapore dollars a year. In addition, the government plans to use the new incentives for the expansion of certain types of economic activities with high growth potential. For example, the scope of coverage schemes for the development and expansion of law firms will be expanded in order to strengthen Singapore's position as International Arbitration Centre. Under this scheme, the recognized law firms will be subject to VAT at 10% of value added, the resulting delivery of legal services international character.