Malaysia Hotline: +603- 2141 8908
Investors
turn to Singapore for establishing their operations for several reasons. The
ease of setting up and operating businesses is a prime motivator. Another
central determinant is Singapore’s tax regime – well-known for its attractive
corporate and personal tax rates, tax relief measures, absence of capital gains
tax, one-tier tax system, and extensive double tax treaties. The purpose of
this guide is to provide a general overview of Singapore’s tax system and tax
rates. We also have a very useful online tax calculator that you can use to to
estimate your Singapore taxes and to compare how they stack up against those in
your home country.
Singapore
Income Tax System
1.
Singapore follows a territorial basis of taxation. In other words, companies
and individuals are taxed mainly on Singapore sourced income. Foreign sourced
income (branch profits, dividends, service income, etc.) will be taxed when it
is remitted or deemed remitted into Singapore unless the income was already
subjected to taxes in a jurisdiction with headline tax rates of at least 15%.
Although the concept of locality of the source of income seems simple, in
realty its application often can be complex and contentious. No universal rule
can apply to every scenario. Whether profits arise in or are derived from
Singapore depends on the nature of the profits and of the transactions which
give rise to such profits.
2.
Singapore corporate tax rate is capped at 17%. By keeping corporate rates
competitive, Singapore continues to attract a good share of foreign investment.
Singapore follows a single-tier corporate tax system, where tax paid by a
company on its profits is not imputed to the shareholders (i.e. dividends are
tax free).
3.
Singapore personal tax rates start at 0% and are capped at 20% (above
S$320,000) for residents and a flat rate of 15% for non-residents.
4. To
increase the resilience of taxes as a source of government revenue, Goods and
Services Tax (GST) was introduced in 1994. The current GST rate is 7%. The
balanced mix of tax on consumption and income reduces the vulnerability of
revenue intake to adverse changes in economic conditions and strengthens the
resilience of Singapore’s fiscal position.
5.
Interest, royalties, rentals from movable properties, management and technical
fees, and director’s fees paid to non-residents (individuals or companies) are
subject to withholding tax in Singapore.
6. For
personal taxes, the tax year is the normal calendar year i.e. January 1 –
December 31. Deadline for filing personal tax return is April 15. For corporate
taxes, a company is free to to decide on its financial year. Deadline for
filing corporate tax return is November 30. Taxes are paid on a preceding year
basis.
7.
Singapore has no capital gains tax. Capital loss expenses are correspondingly
not allowed as deductions.
8.
Singapore has concluded more than 50 bilateral comprehensive tax treaties to
help Singapore companies minimize their tax burden.
Types
of Taxes in Singapore
1.
Income Tax is chargeable on income of individuals and companies.
2.
Property Tax is imposed on owners of properties based on the expected rental
values of the properties.
3.
Estate Duty has been abolished since February 15, 2008.
4. Motor
Vehicle Taxes are taxes, other than import duties, that are imposed on motor
vehicles. These taxes are imposed to curb car ownership and road congestion.
5.
Customs & Excise Duties – Singapore is a free port and has relatively few
excise and import duties. Excise duties are imposed principally on tobacco,
petroleum products and liquors. Also, very few products are subject to import
duties. The duties are mainly on motor vehicles, tobacco, liquor and petroleum
products.
6. Goods
& Services Tax (GST) is a tax on consumption. The tax is paid when money is
spent on goods or services, including imports. This kind of indirect tax is
also known as Value Added Tax (VAT) in many other countries.
7.
Betting Taxes are duties on private lottery, betting & sweep-stake.
8. Stamp
Duty is imposed on commercial and legal documents relating to stock &
shares and immovable property.
9.
Others – The two main taxes are the foreign worker levy and the airport
passenger service charge. The foreign worker levy is imposed to regulate the
employment of foreign workers in Singapore.
Contact
us
If
you have further queries, please contact Tannet
24
hours Malaysia hotline：603-21418908;
24
hours Hong Kong hotline：852-27837818;
24
hours Hong Kong hotline：86-755-
36990589;
Email:
mytannet@gmail.com
TANNET GROUP : http://www.tannet-group.net, http://en.tannet.com.my