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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;
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Property Tax Act; Property Tax (Surcharge) Act;
Goods & Services
-
Tax Act;
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Estate Duty Act;
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Betting & Sweepstake Duties Act;
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Private Lotteries Act; and
-
Stamp Duties Act.
The tax collection for
FY2002/03 is $16.6 billion.
How much tax do you have to pay for working in Singapore?
This page
contains information which will help you to better understand your income
tax position as a foreigner working in Singapore.
Residence Status
The amount of tax you have to pay depends on :
However, your employment income is exempt from tax if you are here on
short-term employment. See Table 1 for a summary of the tax implications.
TABLE 1 - Tax
Implications at a Glance
Employment Period in Singapore
|
|
|
|
60 days or
less |
|
Short-term
employment income is exempt from tax.* |
|
More than 60
days but less than 183 days |
|
Employment
income is taxed at 15% or resident rates, whichever gives rise to higher
tax. |
|
183 days or
more |
|
All income
is taxed from 0% to 22% from the Year of Assessment 2003. |
* This rule does not apply if you are a director, public entertainer or
exercising a profession in Singapore.
Resident Individual
You will be regarded as a tax resident if
-
you have been in Singapore for at least 183 days in a calendar year; or
-
you have been physically present or working in Singapore for 3 consecutive
years even though the number of days you are in Singapore is less than 183
days in the first and third year. See Table 2 for an example.
|
TABLE 2
|
Year |
Period |
Number of days |
|
1
|
1.11.2000 to 31.12.2000
|
61
|
|
2
|
1.1.2001
to 31.12.2001
|
365
|
|
3
|
1.1.2002
to 28.2.2002
|
59
|
As a tax resident, you will be taxed on all income earned in Singapore and
any overseas income that is brought into Singapore. You will also be given
personal reliefs and your income will be taxed at graduated rates from 0%
to 22% for the Year of Assessment 2003. See Table 3.
TABLE 3 - Tax Rates for Resident Individuals
|
Chargeable Income ($)
|
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
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N.A
|
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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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