The entrepreneur’s guide to Singapore Capital Gains Tax (CGT)

A Capital Gains Tax (CGT) is a tax on the profit made when selling an asset—like stocks, or bonds: property, digital assets, digital currencies, or a business. 

In many countries, the government takes a percentage of that gain if you buy low and sell high.

But in Singapore, there’s no capital gains tax.

That means you don't have to pay tax on the gains if you sell properties. However, it’s not always that simple. If your transactions resemble business activities, IRAS may tax your gains as income.

For example:

• Frequent trading? It could be considered taxable business income.
• Foreign assets? Other countries' CGT rules may still apply.

Now, let’s dive deeper into what this means for entrepreneurs, investors, and business owners.

1. What is the capital gains tax in Singapore?

As per the IRAS regulation regarding Singapore CGT, "Gains from the sale of a property, shares, and financial instruments in Singapore are generally not taxable. 

However, gains from "trading in properties" may be taxable." 

What does it mean? It means that if you sell with the intent of making a profit, the profit becomes taxable. 

To check whether or not you sell with profit-making intent, IRAS uses the Badges of Trade to test. In other words, IRAS wants to determine whether your gain is capital (not taxable) or income (taxable).

For example, you buy a share in 2023 for 5 SGD, but in 2025, that share is 10 SGD, and you sell it.

The gain you make is the difference between the value of the share according to the market at a given time. This profit is not taxable. 

Another example is when you 

However, the same activities can be taxable if they meet the Badges of Trade criteria.

1. What are the Badges of Trade? (And when do you pay tax?)

The badges of Trade are factors that help decide whether your profits should be taxed as income instead.

The test rule is straightforward: It determines whether you intend to make a profit or not.

Our tax and accounting experts provide you with a quick checklist to see if your activities qualify under the "Badges of Trade" test.

2. What is the safe harbor rule in Singapore?

Companies selling shares in another company may not have to pay tax on their profits if they meet the Safe Harbour Rule. This rule exempts capital gains tax when:

•  The company owns more than 20% of the ordinary shares in the other company.
•  The shares have been held for at least 24 months as a long-term investment.

If these conditions aren’t met, IRAS will check other factors (like how often you trade) to decide if the sale should be taxed. This rule applies to all companies, whether the company being sold is in Singapore or another country, listed or private. 

However, it only applies to share sales made between 1 June 2012 and 31 May 2022.

3. Capital gains tax in other countries (and why it matters for you)

If you invest or expand abroad, capital gains tax is a major consideration. Many countries impose this tax on profits from selling assets like stocks, property, or businesses.

Depending on where you operate, capital gains tax rates can be substantial, sometimes as high as 30% or more, directly impacting your returns and investment decisions.

For business owners, this tax can also affect exit strategies, making it more expensive to sell a company or divest from certain assets.

In high-tax jurisdictions, careful tax planning is essential to minimize liabilities and maximize net profits.

So, how do other countries compare to Singapore in terms of CGT policy? Here’s our comparison table. 

4. How can we help you determine whether or not your profits are taxable?

Not all profits are taxed in Singapore, but how do you know if yours are? The IRAS considers multiple factors when determining if your gains are non-taxable or taxable

The problem? Misclassification can lead to unexpected tax liabilities. That’s where Global Link Asia Consulting tax experts step in. We can help you:

• Assess your transactions using IRAS guidelines;
•  Ensure compliance while optimizing your tax position;
•  Avoid penalties and unnecessary tax burdens.

If you are thinking about expanding overseas with Singapore to be your company headquarters, we can help you:

• Register a company in Singapore;
• Open a corporate bank account in Singapore with a 99% success rate;
• Choose the right company types for tax optimization in Singapore;
• Apply for Singapore business licenses;
• Get an affordable, professional registered office address for business;
• Support to open, authenticate, and manage Stripe Paypal Business in Singapore, Hong Kong, and the U.S;
• Handle all your tax accounting needs, timely annual filings, auditing, and more.

5. FAQs about Singapore capital gains tax

We offer a comprehensive range of accounting and tax services for Singaporean companies. Our services include:

• Tax Consulting including corporate income tax, GST tax, contractor tax, and more.
• Monthly/Annual Tax Accounting services in accordance with Singapore accounting standards (SFRS).
• QuickBooks Consulting and Licensing.
• Corporate Income Tax Return Preparation
• GST Tax Return Preparation.

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