Businessmen look at Singapore to initiate their setups for a number of reasons. While the ease of setting up operations and running a business is a prime motivator in this cause, another main contributing factor is Singapore’s tax regime. Tax filing in Singapore is known for its attractive personal and corporate income tax rates, extensive double tax treaties, tax relief measures, a one-tier tax system, and the absence of capital gains tax.
Persons, including trustees, partnerships, corporations, and units of persons carrying on any profession, business, or trade in the region of Singapore are levied to pay tax on all sorts of profits (except for the profits generated from the sales of capital assets) generated in or derived from Singapore. The entities are also charged on certain foreign-sourced income from any type of business, trade, or profession.
This guide here presents you with a general overview of tax filing in Singapore. What are the general tax rates in Singapore? How many types of taxes do people file in Singapore? Who is responsible for filing taxes? Let us find answers to all these questions.
Personal Income Tax Filing
Singapore offers the lowest possible personal income tax rate in the world. In order to determine the personal income tax liability of an individual in Singapore, you need to first identify the amount of chargeable income and the tax residency status and then apply the tax rate to it.
What Is the Amount of Chargeable Income for Individual Residents?
Filing an individual tax return is mandatory for tax residents if they earn S$22,000 or more annually. Tax residents are not obliged to pay tax if their annual income is less than S$22,000. However, you may have to file a tax return if you are alerted by authorities to file your tax return.
Who Are the Tax Residents?
You are seen as a tax resident if you are:
- a Singaporean
- a foreigner who has worked or stayed in Singapore in the tax year for 183 days or more
Tax residents are obliged to pay individual taxes on their chargeable income according to the resident tax rate table below. An individual is considered a non-resident if they have remained or operated business in Singapore for less than 183 days in the tax year.
Personal Tax Rates
| Tax rate on dividends obtained from Singapore business | 0% |
| Tax rate on capital gains | 0% |
| Tax rate on first S$20,000 | 0% |
| Tax rate on next S$10,000 | 2% |
| Tax rate on first S$30,000 | $200 |
| Tax rate on next S$10,000 | 3.5% |
| Tax rate on first S$40,000 | $550 |
| Tax rate on next S$40,000 | 7% |
| Tax rate on first S$80,000 | $3,350 |
| Tax rate on next S$40,000 | 11.5% |
| Tax rate on first S$120,000 | $7,950 |
| Tax rate on next S$40,000 | 15% |
| Tax rate on first S$160,000 | $13,950 |
| Tax rate on next S$40,000 | 18% |
| Tax rate on first S$200,000 | $21,150 |
| Tax rate on next S$40,000 | 19% |
| Tax rate on first S$240,000 | $28,750 |
| Tax rate on next S$40,000 | 19.5% |
| Tax rate on first S$280,000 | $36,550 |
| Tax rate on next S$40,000 | 20% |
| Tax rate on first S$320,000 | $44,550 |
| In excess of S$320,000 | 22% |
Corporate Tax Filing
Both resident and non-resident companies that carry on business in Singapore are levied to pay tax on their foreign-sourced income when it is remitted or believed remitted to Singapore and on their Singapore-sourced income. On certain types of income, non-resident companies are subject to WHT (withholding tax). Interest, moveable or rental property, royalties, technical service fees, etc. are all subject to WHT when these are deemed to arise in the Singapore region.
Tax Residence of Company
A company is deemed a tax resident in Singapore if the management and control of the business operations lie inside Singapore. Meaning, if the key decisions regarding a business’s strategic matters are made in Singapore, the company is believed to be a tax resident in Singapore.
In general, a company is deemed non-resident in Singapore if the directors held board meetings outside Singapore and the management and control are also practiced outside Singapore. This can be held true even if the day-to-day activities of the business are taking place in Singapore.
Corporate Tax Rates
Singapore’s present headline corporate tax rates are overlaid at a flat 17%. However, the effective tax rate for corporations can be significantly lowered because the Singapore government offers incentive programs and tax exemption for businesses in Singapore.
| Type Of Corporate Tax | Rate (%) |
| Tax on corporate income | 17% |
| tax rate for dividends offered to shareholders | 0% |
| tax rate for foreign-sourced income that is taxable | 0% |
| tax rate for capital gains | 0% |
Types Of Taxes in Singapore
Income Tax – levied on the income of individuals and corporate businesses.
Property Tax – inflicted on holders of properties based on the anticipated rental prices of the property assets.
Estate Duty – obliterated since February 15, 2008.
Motor Vehicle Taxes – these are taxes other than import duties imposed on motor vehicles. These taxes are levied on road congestion and curb car possession.
Excise Duties and Customs – Singapore charges very few import duties and excise. Excise duties are inflicted on petroleum, tobacco, and liquors. Also, very few imported products held import duties. The import duties are mainly levied on tobacco, vehicles, petroleum products, and liquor.
Goods & Services Tax (GST) – GST is imposed on consumer products. The tax is charged when money is spent on goods and services, including imported items. This type of indirect tax is known as VAT (Value Added Tax) in various other countries.
Betting Tax—paid on private lottery, sweepstake, and betting.
Stamp Duty—imposed on legal and commercial documents relating to immovable property, stock, and share.
Others – the two other taxes are the airport passenger service charge and the foreign worker levy. The foreign worker levy is inflicted to control the activities of foreign workers in Singapore.
If you are a legalized business in Singapore (either resident or non-resident) looking for tax filing services to make the day-to-day activities of your business less hectic, you can consult Mi2U Business Support. We help companies operating in Singapore comply with regulations and manage tasks such as accounting, tax filing, GST registration, and more with efficiency and precision. Contact Mi2U Business Support now to get all your business-related problems solved!
