ABOUT SINGAPORE - TAXATION IN SINGAPORE

 

The Inland Revenue Authority of Singapore (IRAS) was incorporated on 1 September 1992 by an Act of Parliament. IRAS acts as agent for the government to assess, collect and enforce payment of taxes. In connection with such functions, IRAS is responsible for administering the following Acts:

  • Income Tax Act;

  • Economic Expansion Incentives (Relief from Income Tax) Act;

  • Property Tax Act; Property Tax (Surcharge) Act;
    Goods & Services

  • Tax Act;

  • Estate Duty Act;

  • Betting & Sweepstake Duties Act;

  • Private Lotteries Act; and

  • Stamp Duties Act.

The tax collection for FY2002/03 is $16.6 billion.

How much tax do you have to pay for working in Singapore?

This page contains information which will help you to better understand your income tax position as a foreigner working in Singapore.

 

Residence Status

The amount of tax you have to pay depends on :

 

  • whether you are regarded as a tax resident or non-resident in Singapore; and

  • how much income you earn.

 

However, your employment income is exempt from tax if you are here on short-term employment. See Table 1 for a summary of the tax implications.

 

TABLE 1 - Tax Implications at a Glance

Employment Period in Singapore

Resident Status

Tax Implications

60 days or less

Non-Resident

Short-term employment income is exempt from tax.*

More than 60 days but less than 183 days

Non-Resident

Employment income is taxed at 15% or resident rates, whichever gives rise to higher tax.

183 days or more

Resident

All income is taxed from 0% to 22% from the Year of Assessment 2003.

* This rule does not apply if you are a director, public entertainer or exercising a profession in Singapore.

 

Resident Individual

You will be regarded as a tax resident if

 

  • you have been in Singapore for at least 183 days in a calendar year; or

  • you have been physically present or working in Singapore for 3 consecutive years even though the number of days you are in Singapore is less than 183 days in the first and third year. See Table 2 for an example.

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TABLE 2

Year Period Number of days
1
1.11.2000 to 31.12.2000
61
2
1.1.2001 to 31.12.2001
365
3
1.1.2002 to 28.2.2002
59

 

As a tax resident, you will be taxed on all income earned in Singapore and any overseas income that is brought into Singapore. You will also be given personal reliefs and your income will be taxed at graduated rates from 0% to 22% for the Year of Assessment 2003. See Table 3.

 

TABLE 3 - Tax Rates for Resident Individuals

Chargeable Income ($)
Rates
Tax Payable($)
On the first
20 000
0%
0.00
On the next
10 000
4%
400.00
On the first
30 000
 
400.00
On the next
10 000
6%
600.00
On the first
40 000
 
1 000.00
On the next
40 000
9%
3 600.00
On the first
80 000
 
4 600.00
On the next
80 000
15%
12 000.00
On the first
160 000
 
16 600.00
On the next
160 000
19%
30 400.00
On the first
320 000
 
47 000.00
Above
320 000
22%
 

 

Non-Resident Individual
You will be regarded as a non-resident if you have been in Singapore for less than 183 days in a calendar year.

As a non-resident, you will only be taxed on all income earned in Singapore. You will not be given personal reliefs and your employment income will be taxed at a flat rate of 15% or the resident rates for the Year of Assessment 2003 (shown in Table 3), depending on which gives a higher tax. See Table 4 for an example. For director's fees and income other than employment, they will be taxed at a flat rate of 22% for the Year of Assessment 2003.

 

TABLE 4 - Tax Computation for a Non-Resident for the Year of Assessment 2003

 
Tax at Non-Resident Rate of 15% ($)
Tax at Resident Rate ($)
Employment Income
50,000
50,000
Less: Personal Reliefs
 
 
Earned Income
N.A
1,000
Wife
 
2,000
Chargeable Income
50,000
47,000
Tax on 15%
7,500
N.A
Tax on 1st $40,000
N.A
1.000.00
Tax on next $7,000 @9%
 
630.00
Tax Payable
7,500
1,630.00
 
 
 
You will have to pay tax of $7,500 which is the higher of $7,500 and $1,630.00.

 

 

Here are some common questions and answers posed by foreigner working in Singapore.

 

Q1. If my Singapore income is being taxed in my own country, do I still need to pay tax in Singapore?

If your home country has a tax treaty with Singapore, it may protect you from being taxed twice on the same income. This depends on the provision of the tax treaty. You can get a list of Singapore's tax treaties with other countries, available at Tax Treaties.

 

Q2. When do I need to send in my Singapore Income Tax Form?

Usually, we will send an income tax form to you at your mailing address by 31 March of each year. You will then have to fill in and return the form to IRAS by 15 April of the same year.

 

Q3. If I were to make CPF contributions, will the contributions be tax deductible?

No. Foreigners (other than Singapore Permanent Residents) are no longer required to make CPF contributions under CPF rules. Hence, your voluntary CPF contributions will not be tax deductible and your employer's contributions to CPF (if any) will be taxed in your hands.

For more details, click
Tax Treatment of CPF Contributions (For Foreign Employees).

 

Q4. If I choose to make CPF contributions voluntarily and withdraw the amount subsequently upon cessation of employment or departure from Singapore, will I be taxed on the amount withdrawn?

You will not be taxed on the amount withdrawn as you are not required to make CPF contributions under CPF rules (see Q3).

 

Q5. Does my employer need to inform IRAS if I cease employment with the company?

Yes, your employer needs to seek tax clearance by:
informing IRAS at least one month before you cease employment or leave Singapore; and
withholding any monies due to you until tax clearance is given or 30 days after we have received your employer's notification, whichever is earlier.

However if you are a Singapore Permanent Resident and you are merely changing jobs in Singapore, your employer does not have to seek tax clearance unless you are leaving Singapore permanently.

 

Q6. What if the amount of money withheld by my employer is not enough to pay the tax that I owed?

You should arrange to pay the remaining amount that you owe. Otherwise, IRAS may appoint your bank or CPF Board as agent, under Section 57 of the Income Tax Act, to recover the tax from you. We may also prevent you from leaving Singapore by issuing you a stop order certificate. In such a case, you will need a release letter from IRAS before you can leave Singapore.

For more details, click
Employers - What You Need To Know About Tax Clearance

 

For more information on taxes in Singapore, visit www.iras.com.sg.

 

 


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