Singapore has a very favourable corporate and personal income tax rate. This is one of the main reasons for companies around the world domiciling their operations in Singapore. Favourable characteristics of Singapore’s tax regime are:
- low corporate tax rates
- low personal income tax rates
- attractive tax relief and incentives
- no capital gains tax
- no estate duties
- a one-tier tax system
- extensive avoidance of double taxation agreements
Overview
The Income Tax Act is the statute governing individual and corporate tax matters in Singapore. You can refer to the Income Tax Act at this link.
The statutory body governing tax matters is the Inland Revenue Authority of Singapore (IRAS) IRAS is responsible for the collection of income taxes, property taxes, goods and services taxes and stamp duties.
Resident Income Tax Rates
From Year of Assessment 2017 onwards
| Chargeable Income | Income Tax Rate (%) | Gross Tax Payable ($) |
|---|---|---|
| First $20,000 | 0 | 0 |
| Next $10,000 | 2 | 200 |
| First $30,000 | - | 200 |
| Next $10,000 | 3.50 | 350 |
| First $40,000 | - | 550 |
| Next $40,000 | 7 | 2,800 |
| First $80,000 | - | 3,350 |
| Next $40,000 | 11.5 | 4,600 |
| First $120,000 | - | 7,950 |
| Next $40,000 | 15 | 6,000 |
| First $160,000 | - | 13,950 |
| Next $40,000 | 18 | 7,200 |
| First $200,000 | - | 21,150 |
| Next $40,000 | 19 | 7,600 |
| First $240,000 | - | 28,750 |
| Next $40,000 | 19.5 | 7,800 |
| First $280,000 | - | 36,550 |
| Next $40,000 | 20 | 8,000 |
| First $320,000 | - | 44,550 |
| In excess of $320,000 | 22 |
Non-resident Income Tax Rates
Taxes on employment income:
– Employment income of non-residents is taxed at a flat rate of 15% or the progressive resident tax rates (refer to the Resident Income Tax Rates above), whichever is the higher tax amount.
| Type of Income | Non-resident individual tax rate / withholding tax rate from YA 2017 | |
|---|---|---|
| (a) | Director's remuneration | 22% |
| (b) | Income derived from activity as a non-resident professional (consultant, trainer, coach, etc.) | 15% of gross income or 22% of net income |
| (c) | Income derived from activity as a non-resident public entertainer (artiste, musician, sportsman, etc.) | 10% concessionary rate (No change) See Tax for Non-Resident Public Entertainers |
| (d) | Other income e.g. rental income derived from a Singapore property | 22% |
| (e) | SRS withdrawal by a non-citizen SRS member | 22% |
| (f) | 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. |
| (g) | Pension | 22% |
You can use this Tax Calculator for Non-Resident Individuals provided by the Inland Revenue Authority of Singapore (IRAS) to estimate your tax payable.
Key components of Singapore’s Tax System
- Singapore’s Personal Income Tax Rates
Singapore’s personal income taxes are progressive and start from 0% and are capped at 22% for residents. Non-resident tax rates start from 15% and are capped at 22%. - Singapore’s Corporate Tax Rates
Singapore’s corporate income tax rates are set at a flat 17%. The effective tax rates are typically lower when factoring in the various tax incentives and rebates given to companies. - Tax Year
The tax year for personal income taxes is the calendar year (1st January to 31st December). Personal income taxes are to be filed by 15th of April every year.
For corporate taxes, companies are free to decide on their own financial year. The deadline for corporate tax e-filing is 15th December every year. Taxes are paid on a preceding year basis. - Singapore’s Goods and Services Tax (GST)
Singapore’s GST is currently at 7%. - Capital Gains Tax
There is no capital gains tax to be paid in Singapore - Estate Duty
There is no estate duty to be paid in Singapore - Stamp Duties
Stamp duties are imposed on commercial and legal documents related to stocks, shares, immovable properties and trusts. - Levies
Levies such as the foreign worker levy are imposed to regulate the employment of foreign workers in Singapore. Hiring certain foreign workers with certain work passes in Singapore will result in levies imposed on the employer. For more details on the various work passes, visit http://singaporeemploymentagency.com/.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
Yours Sincerely,
The editorial team at Singapore Secretary Services
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Related articles:
An overview of Withholding Tax in Singapore
A guide to Corporate Tax in Singapore
Do I need to pay corporate tax on income that is derived outside of Singapore?
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