4 ms·

What exactly "startup-friendly tax regime" does Singapore have and India doesn't?

kranner 7y ago
https://inc42.com/features/the-curse-of-angel-tax-travelkhana-left-with-zero-money-after-cbdt-seizes-inr-33-lakh-freezes-accounts/ https://inc42.com/features/the-curse-of-angel-tax-travelkhan... In addition to incidents like these, corruption is widespread in India. Exports qualify for GST exemption or refund, but in practice refunds are hard to get (at least without a 5% or more bribe).
- twerwe23423 7y ago
  Scary. Tells you about what a state drunk on its power can do; no wonder India is so big on 'digital transactions' (pushed, interestingly, by the likes of USAID).
  - hexagone 7y ago
    Unnecessarily political comment. That too when the Angel Tax, started by the previous government in 2012 (to curb money laundering) (source: https://m.economictimes.com/news/economy/finance/et-in-the-classroom-what-is-angel-tax/articleshow/67202362.cms https://m.economictimes.com/news/economy/finance/et-in-the-c...), and was ended by this government in 2019 (source: https://techcrunch.com/2019/08/23/india-angel-tax/ https://techcrunch.com/2019/08/23/india-angel-tax/).
    - kranner 7y ago
      Angel Tax was not 'ended'. There are still many conditions under which it is still applicable, governing both who can invest in a startup and how the startup can spend its money. [1] A bigger issue which is still applicable today is that long term capital gains tax on startups and other unlisted companies is still 28.5%, while for listed stocks it is 10%. [2] There are some exemptions announced today for foreign investments until 2024 with a lock-in period of 3 years. [3] [1] https://yourstory.com/2019/08/angel-tax-startups-angel-investors-india-dpiit-nirmala-sitharaman https://yourstory.com/2019/08/angel-tax-startups-angel-inves... [2] https://www.business-standard.com/article/companies/higher-ltcg-tax-spooks-start-up-investors-founders-esop-holders-119071000228_1.html https://www.business-standard.com/article/companies/higher-l... [3] https://www.livemint.com/budget/news/budget-2020-full-text-of-nirmala-sitharaman-s-budget-speech-11580547114996.html https://www.livemint.com/budget/news/budget-2020-full-text-o...
- lonelappde 7y ago
  5% of how much, though? how much more than 5%?
  - kranner 7y ago
    5% (up to 15%) of the amount to be refunded, which for exporters is all of their GST, which can be up to 28% of the gross value of goods sold. Just a twitter search for "GST refund bribe" will show a lot of examples.
r_singh 7y ago
I think Singapore does not apply capital gains tax for one. Has a simple corporate tax slab of %17 unlike India.
- r_singh 7y ago
  Another plus point is being able to keep profits in SGD as opposed to INR (which depreciates by 5% per year).
9nGQluzmnq3M 7y ago
I used to run a startup in Singapore, and 0% corporate tax for the first 3 years, 0% capital gains tax, and 0% income tax on local dividends was a pretty sweet deal. (I'm not sure what the current corp tax rates are, but AFAIK the latter two are unchanged.)

https://inc42.com/features/the-curse-of-angel-tax-travelkhana-left-with-zero-money-after-cbdt-seizes-inr-33-lakh-freezes-accounts/ https://inc42.com/features/the-curse-of-angel-tax-travelkhan... In addition to incidents like these, corruption is widespread in India. Exports qualify for GST exemption or refund, but in practice refunds are hard to get (at least without a 5% or more bribe).

twerwe23423 7y ago
Scary. Tells you about what a state drunk on its power can do; no wonder India is so big on 'digital transactions' (pushed, interestingly, by the likes of USAID).
- hexagone 7y ago
  Unnecessarily political comment. That too when the Angel Tax, started by the previous government in 2012 (to curb money laundering) (source: https://m.economictimes.com/news/economy/finance/et-in-the-classroom-what-is-angel-tax/articleshow/67202362.cms https://m.economictimes.com/news/economy/finance/et-in-the-c...), and was ended by this government in 2019 (source: https://techcrunch.com/2019/08/23/india-angel-tax/ https://techcrunch.com/2019/08/23/india-angel-tax/).
  - kranner 7y ago
    Angel Tax was not 'ended'. There are still many conditions under which it is still applicable, governing both who can invest in a startup and how the startup can spend its money. [1] A bigger issue which is still applicable today is that long term capital gains tax on startups and other unlisted companies is still 28.5%, while for listed stocks it is 10%. [2] There are some exemptions announced today for foreign investments until 2024 with a lock-in period of 3 years. [3] [1] https://yourstory.com/2019/08/angel-tax-startups-angel-investors-india-dpiit-nirmala-sitharaman https://yourstory.com/2019/08/angel-tax-startups-angel-inves... [2] https://www.business-standard.com/article/companies/higher-ltcg-tax-spooks-start-up-investors-founders-esop-holders-119071000228_1.html https://www.business-standard.com/article/companies/higher-l... [3] https://www.livemint.com/budget/news/budget-2020-full-text-of-nirmala-sitharaman-s-budget-speech-11580547114996.html https://www.livemint.com/budget/news/budget-2020-full-text-o...
lonelappde 7y ago
5% of how much, though? how much more than 5%?
- kranner 7y ago
  5% (up to 15%) of the amount to be refunded, which for exporters is all of their GST, which can be up to 28% of the gross value of goods sold. Just a twitter search for "GST refund bribe" will show a lot of examples.

r_singh 7y ago

I think Singapore does not apply capital gains tax for one. Has a simple corporate tax slab of %17 unlike India.

r_singh 7y ago
Another plus point is being able to keep profits in SGD as opposed to INR (which depreciates by 5% per year).

9nGQluzmnq3M 7y ago

I used to run a startup in Singapore, and 0% corporate tax for the first 3 years, 0% capital gains tax, and 0% income tax on local dividends was a pretty sweet deal. (I'm not sure what the current corp tax rates are, but AFAIK the latter two are unchanged.)