Singapore Taxation

The various types of taxes in Singapore include the following;

• Income tax: A tax that is levied on the income of individuals and companies in Singapore.
• Goods and Services Tax: Goods and Services Tax (GST), also known as VAT in other countries, is an indirect consumption tax levied on the import of goods, as well as nearly all supplies of goods and services in Singapore. Exemptions apply to the sale and lease of residential property, most financial services, export of goods, and international services.
• Property tax: Property tax is payable on the purchase of immovable properties such as buildings and land in Singapore.
• Betting and Sweep-stake duty: The betting and sweep-stake duty is imposed on the promoters of private lotteries, betting and sweepstake activities in Singapore.
• Stamp Duty: Stamp duty is a tax imposed on the execution of legal documents that relate to shares or immovable property. Note that it is not a tax on the transactions per se.
• Casino tax: This is a new tax thats has been introduced in light of the casinos that are operated by the two Integrated Resorts in Singapore. The casino tax is levied on the gross gaming revenue of casinos.
• Road tax: All vehicles in Singapore must pay road tax.

Note: There is no capital gains tax, no estate duty, no surtax, no payroll tax, no transfer tax, and no capital duty in Singapore.

Singapore corporate income tax rate
The current corporate income tax rate during the first three years of company incorporation is as follows:

*Note that the 0% tax rate is applicable only if the company has a maximum of 20 shareholders of which atleast one is an individual shareholder holding at least 10% of the shares.

The corporate income tax rate for a company from the fourth year of company incorporation is as follows:

Singapore personal income tax rate
The minimum taxation threshold for individuals in Singapore is S$22,000. Personal income tax rates vary for tax residents and tax non-residents.

Singapore personal income tax rates for residents
Singapore citizens, Permanent Residents and foreigners who have stayed or worked in Singapore for 183 days or more in the tax year are considered to be residents.

Singapore personal income tax rate for tax non-residents
Non-residents are foreigners who have stayed or worked in Singapore for less than 183 days in the tax year. Tax non-residents are taxed at 15% or the above mentioned progressive rates, whicher results in a higher tax amount.

Since Singapore follows a territorial system of taxation, tax is levied only on income that is accrued in or derived from Singapore and foreign sourced income that is remitted into Singapore. Overseas income that is not received in Singapore is tax exempt. Note however that there are certain conditions under which overseas income that is remitted into Singapore is exempt from Singapore tax. These conditions are:

1. The foreign jurisdiction's from which income is received must have a headline tax rate of at least 15%; and
2. The foreign income should have been subjected to tax in the foreign jurisdiction.

There is no capital gains tax in Singapore.

There is no dividend tax in Singapore. This is because Singapore follows a single-tier tax system. In other words, the tax that a company pays on its income is the final tax and the dividends that the company distributes to its shareholders are tax free.

• GST stands for Goods and Services Tax and is the equivalent of VAT.
• GST is an indirect consumption tax levied on the import of goods and nearly all supply of goods and services in Singapore.
• Businesses entities that anticipate an annual turnover of S$1million must register for GST.
• Note that GST is not a cost to the company as it is levied on the end consumer.
• Businesses merely collect the GST on behalf of the tax department. Subsequently, businesses will pass on the collections made to the tax department by filing GST returns on a quarterly basis.
• The following goods and services are exempt from GST:
  • Export of goods outside Singapore;
  • International services offered outside Singapore;
  • Sale and lease of residential land; and
  • Financial services.

The current rate of GST in Singapore is 7%.

Taxation of resident and non-resident companies

A company is considered a Singapore resident for tax purposes is its control and management is exercised in Singapore, while a non-resident company is one whose control and management is exercised outside Singapore.

Generally, the basis of taxation is the same for all companies, irrespective of their tax residency status. There is no difference in the corporate income tax rates for resident and non-resident companies. However, there are certain tax benefits that are accorded to resident companies and not to non-resident companies. These benefits include:

1. A 0% tax rate on the first S$100,000 taxable income for each of the first three tax filing years for a newly incorporated Singapore company, subject to certain qualifying criteria.
2. Tax benefits that are accorded to companies under the various tax treaties that Singapore has concluded with various countries.
3. Tax exemption for Singapore remitted foreign sourced income that was subject to at least a 15% headline tax rate in the foreign jurisdiction.

Apart from these benefits, there is no difference in the taxation of resident and non-resident companies in Singapore.

Taxation of resident and non-resident individuals

You are considered a tax resident of Singapore if you are a Singapore citizen, Singapore Permanent Resident or a foreigner who has stayed or worked in Singapore for 183 days or more in the tax year. You are considered a non-resident if you are foreigner who has stayed or worked in Singapore for less than 183 days in the tax year.

The basis of taxation is not the same for tax resident individuals and tax non-residents. Different tax rates and tax rules apply to resident and non-resident individuals.

Taxation of resident individuals

Resident individuals are taxed at progressive rates from 0% to 20% on income above S$320,000. Resident individuals are entitled to tax reliefs (such as course fees relief, parent relief, spouse relief, etc.) that can be deducted from their chargeable income. Furthermore, tax deductions can be claimed for qualified employment related expenses, qualifies rental related expenses, and donations to qualified charitable organizations.

Taxation of non-resident individuals

• Non-resident individuals who are employed for 61-182 days in a year will be taxed at a flat rate of 15% or the progressive resident rates, depending upon which tax rate results in a higher tax liability. Non-residents are not eligible to tax reliefs. Tax deductions can be claimed for qualified employment related expenses, qualifies rental related expenses, and donations to qualified charitable organizations.
• Non-resident individuals who are employed for 60 days or less in a year are exempt from tax on their employment income. However, this rule does not apply to company directors, public entertainers, or foreign professionals such as speakers, consultants, trainers, coaches, foreign experts, etc.
• Director fees, consultant fees, and all other income is taxed at 20%.

The tax year for companies is the financial year. Companies are free to decide on their financial year. Corporate tax returns must be filed by November 30 of the Year of Assessment (YA).

The tax year for individuals is the calendar year spanning January 1 to December 31. Personal income tax returns must be filed by April 15 of the Year of Assessment (YA).

Note that taxes are paid on a preceding year basis.

You can estimate your Singapore taxes by using this Singapore Tax Calculator.

Yes. You can use the Singapore Tax Calculator - a specially designed tool for comparing Singapore tax liability vis-a-vis tax liability in major countries around the world. The tool is especially useful in determining the tax advantages of relocating to Singapore.

For comprehensive information on Singapore's tax system for companies, please refer to our Singapore Company Taxation Guide.