Personal Taxes in Singapore are competitive whether or not a person is a resident of Singapore, income that accrues or is earned only in Singapore is subject to taxation.
Generally, income is also taxed only if it is received in Singapore by a resident person through a Singapore partnership is income from sources outside of Singapore taxable.
Residents are eligible for a number of personal exemptions and are subject to graduated tax rates ranging from 0% to 22% (24% as of the year of assessment 2024). Individuals who are non-residents are not eligible for any personal exemptions and must pay tax at a fixed rate of 22% (24% starting in the year of assessment 2024).
Non-residents are given a break by having their employment income taxed at the highest of a flat rate of 15% or the graduated resident rates with personal exemptions. Directors who are not residents are not eligible for this exception.
RESIDENT TAX RATES
|Chargeable Income||Rate (%)||Gross Tax Payable ($)|
|On the first 20,000 On the next 10,000||0 2||0 200|
|On the first 30,000 On the next 10,000||- 3.50||200 350|
|On the first 40,000 On the next 40,000||- 7||550 2,800|
|On the first 80,000 On the next 40,000||- 11.5||3,350 4,600|
|On the first 120,000 On the next 40,000||- 15||7,950 6,000|
|On the first 160,000 On the next 40,000||- 18||13,950 7,200|
|On the first 200,000 On the next 40,000||- 19||21,150 7,600|
|On the first 240,000 On the next 40,000||- 19.5||28,750 7,800|
|On the first 280,000 On the next 40,000||- 20||36,550 8,000|
|On the first 320,000 In excess of 320,000||- 22||44,550|
Except for employment income, which is taxed at a flat rate of 15% or at resident rates with personal relief, whichever results in a greater tax, non-residents pay a flat rate of 22% (24% from the year of assessment 2024).
The compensation given to a non-resident director is not eligible for the reduced rate and must be subject to withholding tax (WHT) at a rate of 22% (24% from the year of assessment 2024).
NON RESIDENT TAX RATES
|Type of Income||Non-resident individual tax rate / withholding tax rate|
|Income derived from activity as a non-resident professional (consultant, trainer, coach, etc.)||15% of gross income or 22% of net income|
|Income derived from activity as a non-resident professional (consultant, trainer, coach, etc.)||10% concessionary rate (No change)|
|Other income e.g. rental income derived from a Singapore property||22%|
|SRS withdrawal by a non-citizen SRS member||22%|
|Interest, royalty etc.||Reduced final withholding tax rate (subject to conditions) as follows: Interest: 15% Royalty: 10% OR 22% if reduced final withholding tax rate is not applicable.|
FILING SG PERSONAL INCOME TAX RETURNS
Every eligible taxpayer has an annual duty to file their tax return. By April 15th, the tax authority in Singapore must receive all completed forms.
If the applicant’s annual income is less than S$22,000 (applicable to tax residents only), they are exempt from paying tax. But, if the tax authorities have instructed them to submit the tax form, they might still be required to file returns. Even if the applicant had no income in prior years, they must still disclose it on the tax form and submit it by April 15 (paper) or April 18 (online) (e-filing). If the annual income is S$22,000 or more, they are required to file tax returns.
The applicant has the option to submit the returns online by mail. The appropriate paper tax form will be sent to you by IRAS upon request; the online form will be accessible beginning on March 1 of each year.
- For tax resident individuals – Form B1
- For self-employed – Form B
- For non-resident individuals – Form M
If the applicant files the paperwork too late or not at all, they will be fined. The non-filing or non-payment of a tax return by the individual may also result in legal action by IRAS.
The applicant will receive your Notice of Assessment or tax bill between May and September after they have filed your returns. The amount of tax they owe will be shown on the tax bill. Within 30 days of the date of the tax bill, the applicant must notify the Singapore tax authority that they object to the amount of the tax and provide justification.
After getting the Notice of Assessment, the applicant has 30 days to pay the entire tax amount. Whether or whether they have alerted the tax authority of the objection is irrelevant. Penalties will be applied if the tax is not paid after 30 days.
TAX TREATMENT FOR INCOME EARNED OVERSEAS
Generally, foreign income earned in Singapore on or after January 1, 2004, is not subject to taxation. This includes foreign earnings deposited in Singaporean banks. Foreign income that is not taxable is not something the applicant has to declare.
Yet, there are some situations where foreign income is taxable:
- It is received in Singapore through partnerships.
- Overseas employment is incidental to Singapore employment. That is, as part of their work here, they must travel overseas.
- The applicant is employed outside of Singapore on behalf of the Singapore Government.
The eligible taxable foreign income must be reported on the tax form under “employment income” or “other income,” as appropriate.
TAX TREATMENT OF EMPLOYER BENEFITS IN SINGAPORE
Except for gains and profits that are expressly exempt from income tax or that are covered by an existing administrative concession, all gains and profits that the applicant obtains from their employment are subject to taxation. All advantages given or granted to them in connection with employment, whether in cash or another form, are included in the gains or profits. Some examples of taxable perks received from the employer include:
- Employer-provided vehicle
- Reimbursements for medical and dental services received by dependents besides you, your spouse, and your children
- overtime compensation
- Per diem allowances (daily payments made to employees traveling outside of Singapore on business), providing the amount is greater than the going rate
- Fixed monthly transportation allowance or reimbursement for private vehicle travel
- Monthly meal allowance
CAPITAL GAINS TAX, INHERITANCE TAX, ESTATE DUTY
Capital gains are “investment income” derived from tangible assets like real estate, financial assets like stocks or bonds, or intangible assets like goodwill. There is no capital gains tax in Singapore.
When the applicant passes away, they must pay an inheritance tax deducted from the financial estate. It is frequently referred to as estate duty in Singapore. With effect from 2008, estate duty in Singapore has been eliminated.
NOT ORDINARY RESIDENT (NOR) SCHEME
The Not Ordinary Resident (NOR) scheme is a program that offers eligible non-residents a variety of tax breaks. The program was launched in an effort to draw in talented people. The system is applicable to an individual’s employment income who is not a Singaporean. A person may benefit from lower taxes under the NOR Scheme, which are proportional to the amount of time spent in Singapore each year.
If a person is eligible for this program, his employment income is only taxed in proportion to the number of days he spends living in Singapore. Also, any employer payments to an international pension fund will be excluded from tax for any NOR.
An individual is eligible for this scheme on the following basis:
If the individual is a non-resident in the 3 immediately preceding assessment years and
If the individual is a tax resident in Singapore in the assessment year where he applies for the NOR status.
The benefit under the scheme will be available for 5 assessment years.
Once an individual qualifies for the scheme, he will have to fulfill the following additional conditions:
- The person must ensure he spends at least 90 days on business away from Singapore.
- His annual revenue from Singapore must be at least $160,000.
- The individual will still be required to pay tax on 10% of his total employment income even if the tax on his apportioned income is less than that percentage.
Reach out to us at Relin Consultants for more information.
What happens if I fail to pay my taxes on time?
After receiving the Notice of Assessment (NOA), you have one month to pay your taxes. A 5% late payment fee will be applied to the unpaid tax if you don’t pay by the deadline. If tax is not paid 60 days after the 5% penalty was assessed, you may be subject to an additional penalty of 1% per month if you continue to be in default. Each month that a payment is not made, this penalty will be assessed, with a cap of 12% of the outstanding tax.
The myTax Portal is the only place to submit requests for a waiver of the late payment penalty, and these requests are subject to approval. If it continues, additional enforcement measures will be used to reclaim the taxes. If you are unable to pay the tax in full, you may request to pay in installments, which are interest-free monthly payments made using GIRO for up to a year.
What happens if I miss the deadline to file my tax?
You will be charged a composition fee for submitting taxes late or not at all and can have a court date. Composition amount appeals must be submitted online through the myTax Portal and are subject to approval.
Try to file your taxes in advance because IRAS will remind you closer to the due date. Apply for an extension online through the myTax Portal if you require additional time to file your income tax return.
How can I pay income tax in Singapore?
Most taxpayers use GIRO, a one-time payment, or 12-month interest-free installments to pay their taxes. You can pay with NETS at a post office or by electronic payment methods like AXS, internet banking, phone banking, mobile banking (PayLah and PayNow applications), and SAM.
With the myTax Portal, taxpayers with trouble paying their taxes can request a longer payment schedule.