Singapore Partial Tax Exemption (PTE) Calculator 2026 — IRAS 75% on First S$10k + 50% on Next S$190k Chargeable Income, Multi-Year Projection & PTE vs STES Comparison

The Partial Tax Exemption (PTE) is a permanent IRAS tax incentive for qualifying Singapore tax-resident companies. It provides: 75% exemption on the first S$10,000 of chargeable income per YA, and 50% exemption on the next S$190,000 per YA. The maximum total exempt income per YA is S$102,500 (S$7,500 + S$95,000). At the 17% corporate tax rate, this saves up to S$17,425 in gross tax per YA. Unlike STES, PTE is available every year indefinitely — there is no 3-year limit. PTE is automatically applied by IRAS when processing your company’s tax assessment.

PTE is available to Singapore tax-resident companies that are not: (1) Investment holding companies (excluded from YA2020); (2) Companies eligible for and in their first 3 YAs under the Startup Tax Exemption Scheme (STES) — such companies would claim STES instead. All other Singapore tax-resident companies automatically receive PTE on their chargeable income each YA. There are no shareholder restrictions, employee requirements, or activity restrictions for PTE (beyond the IHC exclusion). Singapore branches of foreign companies can also claim PTE if tax-resident in Singapore.

No. Investment holding companies (IHCs) in Singapore have been excluded from the Partial Tax Exemption scheme with effect from Year of Assessment 2020. IRAS defines an IHC as a company whose principal activity is holding investments — such as shares, unit trusts, or real property — where the income consists primarily of dividends, interest, or rental income from passive investments. From YA2020 onwards, IHCs are taxed at the full 17% corporate rate on all chargeable income with no PTE relief. Before YA2020, IHCs could claim PTE. If your company holds some investments as a secondary activity alongside active business income, the classification as IHC depends on the principal activity — consult a registered Singapore tax agent.

For YA2026, PTE rates are: 75% exemption on the first S$10,000 of chargeable income (maximum S$7,500 exempt, saving S$1,275 in tax); 50% exemption on the next S$190,000 of chargeable income (maximum S$95,000 exempt, saving S$16,150 in tax). Total maximum exempt income per YA: S$102,500. Total maximum gross tax saving per YA: S$17,425. Additionally, for YA2026, the 40% Corporate Tax Rebate (capped S$40,000) is applied to the gross tax after PTE, potentially reducing tax further.

No — STES is more generous but limited to 3 years. STES exempts up to S$125,000 per YA (maximum saving S$21,250) versus PTE’s S$102,500 exempt (maximum saving S$17,425). The annual advantage of STES over PTE is S$3,825 in gross tax savings. However, STES is only available for the first 3 YAs after incorporation. From Year 4, companies automatically transition to PTE. PTE is better than STES in the sense that it is permanent — the S$17,425 annual tax saving continues indefinitely as long as chargeable income is above S$200,000. Companies should plan for the STES-to-PTE transition to avoid cash flow surprises in Year 4.

No — a company can only claim one scheme per YA. In the first 3 YAs after incorporation, if a company meets all STES eligibility criteria, it claims STES (more generous). If it does not qualify for STES (e.g., investment holding company, wrong shareholder structure), it falls back to PTE (if not an IHC). From Year 4 onwards, the company automatically claims PTE. The two schemes are mutually exclusive on a per-YA basis. There is no election required — IRAS applies the appropriate scheme automatically based on the company’s profile when processing the tax assessment.

Yes — PTE is a permanent scheme with no expiry date. Unlike STES which is limited to the first 3 YAs, PTE continues indefinitely for qualifying Singapore companies. There is no need to reapply or renew — IRAS automatically applies PTE each year when processing the corporate tax assessment. The rates have been stable for many years: 75% on first S$10,000 and 50% on next S$190,000. While there is no guarantee rates will never change (they depend on Budget announcements), PTE has been consistently maintained as a permanent fixture of Singapore’s corporate tax landscape since its introduction.

The maximum PTE tax saving occurs when chargeable income is at or above S$200,000: S$7,500 exempt × 17% = S$1,275 saved from Tier 1; S$95,000 exempt × 17% = S$16,150 saved from Tier 2. Total maximum PTE tax saving per YA = S$17,425. This maximum is achieved for all companies with S$200,000 or more of chargeable income — additional income above S$200,000 receives no further PTE benefit (full 17% applies). For the YA2026 year only, the additional 40% Corporate Tax Rebate (capped S$40,000) further reduces the remaining tax — up to an additional S$17,425 × 40% = S$6,970 saving from the rebate where gross tax is below S$100,000.

PTE reduces the effective tax rate below the 17% headline rate, with the biggest proportional impact at lower income levels. At S$10,000 income: effective rate = 25% × 17% = 4.25%. At S$50,000: effective rate = approximately 8.5%. At S$100,000: approximately 11.1%. At S$200,000: 13.6% (where PTE benefit plateaus). Above S$200,000: effective rate approaches 17% as income grows, since PTE exempts only a fixed S$102,500. At S$1,000,000 income: effective rate ≈ 15.3% (PTE saves only S$17,425 on a S$170,000 gross tax bill). Use this calculator to see the effective rate at your exact chargeable income level.

Singapore investment holding companies lost eligibility for the Partial Tax Exemption with effect from Year of Assessment 2020 (i.e., financial years ending in 2019 for December year-ends). This change was announced in Budget 2019. Before YA2020, IHCs could claim PTE on their passive investment income. The removal was part of Singapore’s efforts to align the scheme with productive business activity rather than passive holding structures. IHCs that previously benefited from PTE should have updated their tax planning from YA2020 onwards. Qualifying IHCs that derive rental income from qualifying properties may still access other IRAS incentives — consult a registered Singapore tax agent.

Yes — PTE applies to a company’s chargeable income, which includes both Singapore-sourced income and foreign income remitted to Singapore (if applicable). Singapore uses a territorial tax system with exemptions for foreign-sourced income (FSI) under the Foreign Sourced Income Exemption (FSIE) scheme for qualifying companies. Where foreign income is brought into the Singapore tax net (either because it doesn’t qualify for FSIE, or the company opts to bring it in), PTE can apply to the combined chargeable income. The 17% rate and PTE exemption apply to the aggregate chargeable income regardless of source, subject to the normal PTE tiers.

PTE and the YA2026 rebate are applied sequentially: Step 1 — PTE reduces chargeable income by up to S$102,500 exempt. Step 2 — The remaining taxable income is taxed at 17% to give gross tax payable. Step 3 — The YA2026 rebate (40%, capped S$40,000) is applied to the gross tax payable. Example: S$300,000 income → PTE exemption S$102,500 → net taxable S$197,500 → gross tax S$33,575 → YA2026 rebate 40% = S$13,430 → net tax S$20,145. The rebate applies only for YA2026 — it is not guaranteed for future years. This PTE calculator automatically applies the YA2026 rebate to the relevant projection year.

PTE applies only to the first S$200,000 of chargeable income — the first S$10,000 (75% exempt) and the next S$190,000 (50% exempt). Chargeable income above S$200,000 is taxed at the full 17% corporate rate with no additional PTE benefit. This means the PTE exemption provides a fixed maximum annual saving of S$17,425 regardless of how high a company’s income goes above S$200,000. As income grows well beyond S$200,000, the effective tax rate approaches the 17% flat rate. At S$2,000,000 income, for example, PTE saves S$17,425 on what would otherwise be S$340,000 gross tax — an effective rate of 16.1%, only slightly below 17%.

In theory, if a company qualifies for STES but prefers PTE (perhaps due to complex shareholder structure concerns), it could choose not to claim STES and use PTE instead. However, there is rarely a financial reason to do this — STES saves more tax than PTE in every scenario. The most common reason to evaluate this is when a company is uncertain about STES eligibility (e.g., venture capital backing dilutes individual shareholding), and it wants to confirm which scheme applies. IRAS generally does not require an explicit election — it applies the applicable scheme based on the company’s reported tax position and shareholder information.

For companies with income below S$200,000, PTE provides proportionally larger relief: at S$10,000 income — 75% exempt, effective tax rate 4.25%; at S$50,000 income — 75% × S$10k + 50% × S$40k = S$27,500 exempt, effective rate ≈ 8.5%; at S$100,000 income — S$52,500 exempt, effective rate ≈ 8.08%; at S$150,000 income — S$77,500 exempt, effective rate ≈ 10.2%; at S$200,000 income — full S$102,500 exempt, effective rate ≈ 13.6%. Below S$200,000, the full 75%+50% tiers may apply in part, giving better effective rates than above S$200,000 where the cap is reached.

Singapore’s Partial Tax Exemption has evolved over the years: Original introduction — provided 75% exemption on the first S$10,000 and 50% on the next S$90,000 (maximum exempt S$52,500). Enhancement around 2008 — the second tier was expanded to S$190,000 (increasing maximum exempt to S$102,500), where it remains today. Key YA2020 change — investment holding companies were excluded from PTE, significantly narrowing the eligible company pool. The rates (75% + 50%) and income bands (S$10,000 + S$190,000) have been stable since the 2008 enhancement. Given the stable, permanent nature of PTE, businesses can reliably plan around the S$17,425 maximum annual saving in their long-term tax projections.