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Singapore Tax Rates & Tax System

Tax System

When compared to many other countries, the Singapore tax rates are comparatively low. The Inland Revenue Authority of Singapore (IRAS) governs the tax system in Singapore that includes GST (Goods and Services Tax) and the complete personal and corporate income tax system. You can get in touch with TaxationServices.com.sg, to know more about Singapore taxation services.

Singapore is a business hub for foreign investors and entrepreneurs alike. Prior to starting a business in a foreign country, foreign investors give due importance to the prevailing tax system in the selected country. Therefore, keeping in sync with the business sentiments of the foreign investors, the Singapore government has ensured to maintain a regime of a progressive tax system in the nation. Singapore not only offers the lowest tax rates; but these rates are very competitive, when compared with the tax systems of other developing nations.

Governing Authority of Singapore Income Tax

Initially known as Inland Revenue Department after its inception in 1960, the Inland Revenue Authority of Singapore (IRAS) is the sole governing authority of the Singapore’s income tax regime. On September 1, 1992, IRAS was established by legislation as the statutory body to perform all the Singapore taxation related functions. As of now, IRAS is solely responsible for collecting all forms of Singapore taxes, including corporate tax, personal tax, goods and services tax, withholding tax and property tax.

Tax Systems & Tax Rates in Singapore

  • Corporate Tax System and Rates: The headline corporate tax rate in Singapore stands at a flat 17% of the income ranging from S$300,001 to S$2,000,000. The effective tax rates in Singapore provide full and partial tax exemption for new start-up companies in Singapore. The best part is, no tax is imposed on the capital gains and the one-tier taxation system ensures that the companies would not have to pay tax on the dividends given to the shareholders.
  • Personal Tax System and Rates: The personal income tax rates in Singapore for residents range from 0% – 22%. Starting from 0% for income less than $20,000 to 22% for the income in excess of $320,000.
    The employment income of non-residents is taxed at flat rate of 15% or at resident’s rate, whichever yields higher tax amount. The tax rate for non-resident directors is 22%. the non-residential professionals have to pay their by 15% of gross income or 22% of net income.
  • Property Tax System and Rates: Budget 2018 has increased top marginal Buyer’s Stamp Duty (BSD) from 3% to 4% with immediate effect. The property tax rate is proposed to progress with 2% and is capped at 20% for properties up to and above S$90,000.
    The progressive property tax rates for owner-occupied homes start with 0% for properties up to and below S$8,000. 4% tax is payable for properties above S$47,000, the tax rate then progresses 2% for the next slab of S$15,000 and is capped at 16% of the properties up to and above S$130,000.
  • Goods and Services Tax: The GST Singapore tax was introduced with a motive to offer a broad based recognition to the Singapore incorporated companies. GST is basically a broad based consumption tax levied upon almost all the supplies of goods and services in Singapore. Singapore customs, collects the GST levied on imported goods or services.
    Since 1 July 2007, the rate of GST has been kept constant at 7%. However, GST is not applicable to sales of goods and services that are either zero rated or exempted under the prevailing GST law.
  • Withholding Tax: The tax levied on the remuneration received by the non-resident companies and individuals from a Singapore source is known as withholding tax Singapore. The withholding rates vary according to the nature of payments made to the non-resident companies or individuals.

Please feel free to contact us on +65-6536 0036 or drop in an email at info@taxationservices.com.sg

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