Singapore Startup Tax Exemption Scheme (STES) Calculator 2026 — 3-Year IRAS Tax Projection, 75% First S$100k Chargeable Income, Eligibility Checker & YA2026 Rebate

The Startup Tax Exemption Scheme (STES) is an IRAS tax incentive for new Singapore-incorporated companies in their first three Years of Assessment (YAs). It provides: 75% exemption on the first S$100,000 of chargeable income per YA, and 50% exemption on the next S$100,000 per YA. Maximum total exempt income per YA = S$125,000. At the 17% corporate tax rate, STES saves up to S$21,250 in gross tax per YA. STES automatically applies if all eligibility criteria are met — no separate IRAS application is needed.

To qualify for STES, a Singapore company must: (1) Be incorporated in Singapore; (2) Be tax-resident in Singapore (management and control in Singapore); (3) Have no more than 20 shareholders throughout the basis period; (4) Have all shareholders as individuals, OR at least one individual shareholder holding at least 10% of ordinary shares; (5) Not be an investment holding company; (6) Not have developing or licensing intellectual property rights as its principal activity. All six criteria must be met throughout the basis period for each YA claimed. If any criterion is not met in a particular YA, STES is not available for that year.

STES is available for a qualifying company’s first three Years of Assessment (YAs) after incorporation. A YA corresponds to the financial year of the company: a company with a December 2024 financial year end would have YA2024 (potentially short first year), YA2025, and YA2026 as its STES years if incorporated in 2024. From YA4 onwards, the company automatically transitions to Partial Tax Exemption (PTE). STES cannot be extended, renewed, or carried forward. If a company has no chargeable income in one of the first 3 YAs, that YA’s STES benefit is forfeit — it cannot be applied in YA4.

STES rates (unchanged for many years, applicable for YA2026 qualifying companies): 75% exemption on the first S$100,000 of chargeable income per YA → saves S$12,750 in gross tax. 50% exemption on the next S$100,000 of chargeable income per YA → saves S$8,500 in gross tax. Maximum gross tax saving per YA from STES alone = S$21,250. After STES, if in YA2026, the additional 40% Corporate Tax Rebate (capped S$40,000) further reduces the remaining gross tax. Combined, a qualifying startup with S$200,000 income in YA2026 would pay just S$7,650 in net tax — an effective rate of 3.83%.

No. Investment holding companies are explicitly excluded from STES. IRAS defines an investment holding company as one whose principal activity is holding investments (shares, property, funds) for long-term capital gains or dividend income, rather than active business operations. This exclusion aims to ensure STES benefits operational startups rather than passive holding structures. If your company holds investments as a secondary activity (e.g., you earn both consulting income and dividend income), you may still qualify for STES if the active business is the principal activity. Consult your tax agent for specific guidance on mixed-income companies.

After STES expires (from the fourth YA onwards), the company automatically falls under the Partial Tax Exemption (PTE): 75% exemption on first S$10,000 of chargeable income (saving S$1,275) and 50% exemption on next S$190,000 (saving S$16,150). Maximum PTE tax saving = S$17,425 per YA — significantly less than STES’s S$21,250. This transition represents an increase in effective tax rate for growing companies. Plan your cash flow and tax reserves during the STES years to prepare for the Year 4 increase.

Yes — both stack. STES reduces taxable income first, then the YA2026 Corporate Tax Rebate (40%, capped S$40,000) is applied to the remaining gross tax. This double benefit is particularly powerful for startups in their STES period that happen to have YA2026 as one of their first 3 YAs. Example: S$200,000 income → STES exemption S$125,000 → net taxable S$75,000 → gross tax S$12,750 → YA2026 rebate (40%): S$5,100 → net tax payable S$7,650 (effective rate 3.83%). Note: The YA2026 rebate applies only for YA2026 — future rebates are not guaranteed.

The maximum STES gross tax savings per YA (from exemptions alone) = S$21,250 (S$12,750 from the first tier + S$8,500 from the second tier), achieved when chargeable income is S$200,000 or more. If the company is in YA2026, add up to S$40,000 in YA2026 rebate (capped). Over all three STES years: maximum cumulative STES tax savings from exemptions alone = S$63,750. With YA2026 rebate applied in the eligible year, total 3-year savings can exceed S$100,000 for a company with consistent income growth.

For companies with chargeable income below S$100,000, only the first STES tier applies: 75% of the chargeable income is exempt, and 25% is taxable at 17%. Example: S$60,000 income → S$45,000 exempt → S$15,000 taxable → gross tax S$2,550 → effective tax rate 4.25%. The second STES tier (50% on next S$100k) does not apply since income doesn’t reach above S$100,000. Companies below S$100,000 income have an effective rate of exactly 4.25% (25% × 17%) before any rebate, demonstrating just how powerful STES is for early-stage Singapore startups with initial small revenues.

Partially. STES requires that either (a) ALL shareholders are individuals, or (b) at least ONE individual shareholder holds at least 10% of ordinary shares throughout the basis period. If a company has both corporate shareholders (e.g., VC fund holding 80%) and individual shareholders (founders holding 20% in total with at least one holding ≥10%), STES is available. If the corporate shareholder takes 95% and no individual holds ≥10%, STES is disqualified. When structuring VC or angel funding: ensure at least one individual maintains ≥10% of ordinary shares (preference shares don’t count). Always model this with your corporate lawyer before closing funding rounds.

Your YA is based on your company’s financial year (FY) end: YA1 = first FY after incorporation; YA2 = second FY; YA3 = third FY. The YA corresponds to the calendar year in which the FY ends. Example: Company incorporated March 2023 with December FY end → YA1 = YA2023 (Dec 2023 FY); YA2 = YA2024 (Dec 2024 FY); YA3 = YA2025 (Dec 2025 FY). From YA2026 → PTE applies. Track this on IRAS myTax Portal where your company’s current YA is displayed. The STES calculator above allows you to select your first YA for accurate projection.

Yes. STES eligibility is assessed independently for each YA. If in YA2 a shareholder transfer causes no individual to hold ≥10%, or shareholders increase beyond 20, STES is lost for that YA (and must be reassessed for YA3). Common triggers for losing STES: (1) Funding round where existing shareholders are diluted below 10%; (2) Share transfer to corporate entities; (3) Employee share options that dilute individual shareholding thresholds; (4) Conversion from Pte Ltd to public company (but this typically disqualifies STES completely). Always verify STES eligibility with your corporate secretary before any shareholder changes during the 3-year STES window.

STES vs PTE comparison: STES exempts S$125,000 per YA (75% of first S$100k + 50% of next S$100k) — only for first 3 YAs. PTE exempts S$102,500 per YA (75% of first S$10k + 50% of next S$190k) — permanent for most companies. Tax savings: STES saves up to S$21,250 per YA gross tax; PTE saves up to S$17,425 per YA. Eligibility: STES requires specific shareholder structure, Singapore incorporation, and non-investment business; PTE is available to most companies (except investment holding companies from YA2020). In dollar terms, STES is S$3,825 better per YA — significant over 3 years at S$11,475 total advantage.

No. STES is only available to Singapore-incorporated companies — not Singapore branches of foreign companies. A branch is an extension of the foreign parent and is not “incorporated in Singapore” for IRAS purposes. If a foreign company establishes a Singapore branch, it does not qualify for STES but may qualify for PTE. If instead a Singapore subsidiary (separate legal entity) is incorporated, STES is available subject to the other eligibility criteria. This is a key structural consideration for foreign entrepreneurs setting up in Singapore: a Singapore subsidiary Pte Ltd enables STES; a Singapore branch does not.

Yes — share sales can affect STES if they change the shareholder profile: (1) If a sale increases total shareholders beyond 20 → STES lost for that YA; (2) If sales dilute all individual shareholders below 10% and some are corporate entities → STES lost for that YA; (3) If selling to another individual who takes ≥10% → STES preserved. Secondary share transfers between founders (individual to individual) typically don’t affect STES as long as total shareholders remain ≤20 and the individual ≥10% threshold is maintained. Always check with your Singapore corporate secretary and tax agent before any secondary transaction during the STES window.

STES applies to chargeable income — which is statutory income minus allowable deductions and losses carried forward from prior years. If a startup has accumulated losses from earlier loss-making years, these losses reduce the chargeable income when offset in a profitable year. STES is then applied to the reduced chargeable income. Example: S$300,000 profit in YA3 minus S$100,000 losses carried from YA1/YA2 = S$200,000 chargeable income. STES: 75% × S$100k + 50% × S$100k = S$125,000 exempt. Net taxable: S$75,000. This means the STES benefit applies on the post-loss-relief chargeable income, potentially reducing it. Plan your loss carry-forward strategy with your tax agent to optimise STES and PTE in profitable years.