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Tax Guide

Financial Year – 1 January – 31 December
Currency – Singapore dollar

Corporate Tax Summary

Residence – A company, whether incorporated in Singapore or otherwise, is considered a resident of Singapore for tax purposes if the place of control and management of its business is exercised in Singapore. Generally, a company is treated as a resident of Singapore if, among other things, its directors’ meetings are held in Singapore.

Basis of Taxation – In Singapore, income is generally subject to tax on a territorial and remittance basis. A company is required to file an income tax return on income derived from, accrued in, or received in Singapore, although certain qualifying foreign-sourced income is exempt from income tax.

Income chargeable to Singapore tax is assessed on a preceding year basis and the due date for companies for filing the income tax return is 30 November of the Year of Assessment (YA). As an example, income derived by a company in its accounting year ended on 30 June 2020 would be assessed in YA 2021. The deadline to file its income tax return for that assessment year is on 30 November 2021.

Reference
Corporate Income Tax Rate (%) 17%
Branch Tax Rate (%) 17%
Withholding Tax Rate:
Dividends – Franked N/A
Dividends – Unfranked N/A
Dividends – Conduit Foreign Income N/A
Interest 15%
Royalties from Intellectual Property 10%
Fund Payments from Managed Investment Trusts N/A
Branch Remittance Tax N/A
Net Operating Losses (Years)
Carry-back Businesses (including sole-proprietors) can also elect to carry back their current year unutilized trade losses and capital allowances of up to SGD 100,000 to the immediate year of assessment preceding the current year of assessment. Any unutilized capital allowances and trade losses in excess of the SGD 100,000 limit would continue to be available for carry-forward under normal rules.
Carry-forward Trade losses can be carried forward indefinitely to offset against the income of the person, provided that the “continuity of ownership” test is met. Any capital allowances in excess of the income from all sources of a person (i.e. unutilized capital allowances) for any year of assessment can be carried forward to offset against income of that person for subsequent years of assessment, subject to both the continuity of ownership and the same business tests.

Individual Tax Summary

Residence – An individual will be regarded as a tax resident in Singapore if he is a Singapore citizen or Singapore permanent resident who resides in Singapore except for temporary absences or a foreigner who is physically present in Singapore or exercised employment in Singapore (other than as a director of a company) for 183 days or more in the preceding year of assessment.

Under the two-year administrative concession, a foreigner whose stay (including employment) in Singapore is at least 183 days straddling two calendar years may be regarded as a tax resident for both years of assessment. Under the three-year administrative concession, a foreigner who works or stays in Singapore for three consecutive years will be regarded as a Singapore tax resident.

Basis of Taxation – An individual is taxed on all income accrued in or derived in Singapore. Foreign-sourced income received in Singapore by a resident individual is not taxable except for income received through a partnership in Singapore.

Filing Status – An individual has to file his income tax return in respect of income earned in the preceding year by 15th April of the following year. An extension is granted until 18th April if the income tax return is filed electronically.

The individual has to pay the tax assessed within one month from the date of the Notice of Assessment.

Personal Income Tax Rates

Taxable Income Tax Payable – Residents Tax Payable – Non Residents
Up to S$20,000 0%
In excess of $320,000 22%

A resident is taxed on chargeable income (assessable income less personal relief) at graduated rates ranging from 0% to 22%.

Employment income of a non-resident is assessed at a flat rate of 15% or the progressive resident rates whichever gives rise to a higher tax amount.
Director’s fee and other income (e.g. rental income) are taxed at 22%.

Goods and Services Tax (GST)

Rate 7%
Taxable Transactions GST-registered businesses must charge GST on all sales of goods and services made in Singapore. The following supplies are exceptions to the requirement to charge GST at the prevailing rate of 7%.

Export of Goods – For exports of goods, GST is charged at 0% (zero-rate). Zero-rated supplies are considered taxable supplies. However, GST is charged at 0% instead of 7%.

Provision of International Services – GST is also charged at 0% (zero-rate) for the provision of international services. International services are similarly considered taxable supplies where GST is charged at 0% instead of 7%.
Exempt Supplies – GST does not need to be charged on exempt supplies, which are broadly categorised into: (i) The provision of financial services; (ii) The supply of digital payment tokens (with effect from 1 Jan 2020); (iii) Sale and lease of residential properties and (iv) The import and local supply of investment precious metals (IPM).

Registration If the company’s annual taxable supplies exceed SGD1million, it is compulsory for the company to register for GST. Otherwise, the company may choose to register for GST voluntarily after careful consideration.
Filing and Payment Both GST returns and payment are due one month after the end of the accounting period covered by the return. If the company is on GIRO plan for GST payment, GIRO deductions are on the 15th day of the month after the payment due date.

Other Taxes Payable

Tax Reference
Payroll Tax N/A
Stamp Duty Stamp duty is a tax on documents relating to immovable property in Singapore, stocks or shares.

Transfer of property:
There are three types of stamp duties on the sale and purchase of immovable properties. They are Buyer’s Stamp Duty (BSD), Additional Buyer’s Stamp Duty (ABSD) and Seller’s Stamp Duty (SSD).

BSD is calculated on the purchase price or the market value of the property, whichever is higher. BSD rates for residential properties range from 1% to 4% while the BSD rates for non-residential properties range from 1% to 3%.

ABSD is payable on acquisition of residential properties (including residential lands). ABSD rates depend on the profile of the buyer (e.g. tax residency of buyer, number of residential properties owned by the buyer, whether the buyer is an individual or an entity) and the rates range from 5% to 30%.

SSD is calculated by applying the SSD rate on the selling price or market value of the residential property, whichever is higher. It applies to residential properties or residential lands that were acquired on or after 20 February 2010 and disposed of within a holding period.

Lease:
Leases with average annual rent less than S$1,000 is exempt from stamp duty. For a lease period of 4 years or less, stamp duty is 0.4% of total rent for the period of the lease. Where the lease period exceeds 4 years, stamp duty is 0.4% of 4 times the average annual rent for the period of the lease.

Shares:
Stamp duty is payable at the rate of 0.2% on the value of the shares or the purchase price, whichever is the higher.

Land Tax Property tax is levied annually on owners of properties and has to be paid by 31 January of each year.

Property tax on owner-occupied and non-owner occupied residential properties are levied on a progressive scale based the properties’ Annual Value (AV). For owner-occupied residential property, the property tax rate ranges from 0% to 16% while for non-owner occupied residential property, the property tax rate ranges from 10% to 20%. The property tax rate applicable depends on the AV band.

Non-residential properties such as commercial, industrial buildings and land are taxed at 10% on the AV.

Customs and excise duties are imposed on intoxicating liquors, tobacco products, motor vehicles and motor fuel.

Last updated: 02.10.2020

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