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Singapore Tax FAQs

What is the corporate tax rate in Singapore and its due date for filing?

The corporate tax rate in Singapore is capped at flat 17%. Some attractive tax incentives like full tax exemption and partial tax exemptions can reduce the tax amount for the businesses with annual turnover below S$300,000.
The due date for filing corporate tax in Singapore is 30 November of each year.

When should I file Singapore ECI and what are the inputs required for it?

Estimated Chargeable Income or ECI should be filed within the three months of your company’s financial year-end.
For filing, you need to declare the company’s estimated annual turnover and items like capital gains on fixed or disposal assets are not included.

Do my company have to register for GST?

GST is self-assesses tax and that is why, businesses are required to assess the need to be registered for GST Singapore. You may require to register for GST on a compulsory basis if annual turnover of your business exceeds or likely to exceed beyond S$ 1 million. Otherwise, you can opt for voluntary registration of GST.
The key advantage of registering GST on voluntary basis is that you can enjoy the benefits of claiming input tax incurred in the course of your business.

Personal Tax

What is the Personal tax regime in Singapore?

The tax regime is different for resident and non-resident individuals. For resident individuals, the tax rate is progressive. It starts from 0% and ends at 20% for income above S$320,000. For non-residents, the tax rate is flat 15% or the progressive tax rate, whichever leads to higher tax amount.

What is the last date for filing personal income tax?

The tax year of Singapore is from January 1 to December 31 and the due date for the filing income tax returns is April 15 of each year.

I am a non-resident who has resided in Singapore for less than 183 days, will I get taxed?

If you have stayed for 60 days or less in a year, you will be exempted from paying taxes. However, this will not be applicable if you are a director of a company, a public entertainer, or exercising a profession in Singapore. Professionals include foreign experts, foreign speakers, queen’s counsels, consultants, trainers, coaches etc. If you are in Singapore for 61-182 days in a year, you will be taxed on all income earned in Singapore. You may claim expenses and donations to save tax. However, you will not be eligible to claim personal reliefs. Your employment income will get taxed at 15% or the progressive resident rate, whichever gives rise to a higher tax amount.

If my salary is below S$22,000, should I not file my tax returns?

Even if your salary is below S$22,000, you are not bound to file your returns, but still you have to mention zero income in your tax form and submit it by 15 April. You will get subjected to penalties for filing late or not filing at all.

Which are the forms available for filing taxes?

The forms available for filing taxes are as under –

  1. For tax resident individuals – Form B1
  2. For self-employed – Form B
  3. For non-resident individuals – Form M

I amount mentioned on my tax bill received from IRAS is wrong, what should I do?

If you disagree with your tax amount, you need to inform tax department within 30 days from the date of your tax bill and state your reasons for objection. You need to pay the full amount of tax within 30 days of receiving your Notice of Assessment. This is regardless of whether you have informed tax authority about your objection. If your tax remains outstanding after 30 days, a penalty will be imposed.

I am a resident director of a Singapore company, will I be taxed differently?

No, there is no difference in taxation rates between a director and any other employee. Your income will also be taxed at the same progressive tax rate system. However, if the director is non-resident, then he/she will be taxed at a rate of 20%.

Am I eligible for contributing to CPF on an employment pass?

No, you or your employer, both, is not eligible for contributing to CPF when you are working in Singapore on an employment pass. CPF contributions are not allowed for foreigners. Any attempt made by the employee on employment pass, professional visit pass or work permit, to contribute to CPF will be rejected.

I am being paid for my dividend from a Singapore company, will I be taxed?

If the dividend income falls under any of the following conditions, you will not be taxed on it.

  • If the dividends are paid to its shareholders, from Singapore companies
  • Foreign dividends received in Singapore. However,  foreign source income received through partnerships in Singapore is excluded
  • If your foreign source income distributions comes from unit trusts and real estate investment trusts (REIT) that are authorized under Section 286 of the Securities and Futures Act.

Corporate Tax

I am a startup company, will I get taxed?

No, for the first three years, you can avail full tax exemption on profits up to S$100,000. In addition, the new start-up companies can avail a partial tax exemption of 50% on the next S$200,000 income for the first 3 years.

What is the income tax assessment period?

In Singapore, corporate income gets assessed on a preceding year basis. This means that the assessment period for any Year of Assessment (YA), is the financial year ending (FYE) in the year preceding the YA. For example, in year 2014 you will be filing corporate tax return for your company’s financial year that ended anytime between January 1, 2013 to December 31, 2013. Your company’s accounts are prepared up to the FYE of each year.

Can a Singapore branch of a foreign company avail tax exemptions?

Normally, Singapore branch office is non-tax resident in Singapore and therefore, there is no tax exemption or advantage, which they can avail of as compared to a Singapore resident company. However, Singapore branch of a foreign company is considered resident in Singapore, if the control and management of its business are exercised in Singapore. Such companies are do not have to pay the taxes on foreign-sourced income under the Double Taxation Agreements (DTAs).

What is PIC and CIT scheme?

The PIC scheme started in 2010, it was done to encourage and enhance the innovation and productivity quotient of companies. By participating in the PIC scheme, companies can avail attractive incentives i.e. up to 400% tax deductions and 60% cash payouts on the qualifying expenditure of the company. The intention of introducing this scheme is to promote the SMEs, who are cash-starved, to increase their productivity, and innovate. The corporate income tax (CIT) rebate has been introduced to help companies effectively deal with the increasing costs of business operations. All the Singapore companies can claim 30% CIT rebate subject to a cap of S$30,000 as of 2013.

Are Singapore companies taxed for receiving capital gains?

No. All types of capital gains in Singapore are tax exempt.

My company did not make any profit in this year. Do I still need to file my company’s tax returns?

Yes, even if your company did not make any profit, you will have to file a tax return. However, in the form, you will have to mention your estimated chargeable income (ECI) as ‘nil’.

What is the taxation regime for royalty income?

When a person gets money for allowing the use of his patents, trademarks, or copyrights, that income is known as royalty income. It does not matter, if a person gets the royalty income derived in Singapore, or earns it from outside Singapore and receives it in Singapore; it is taxable in both ways.

Do all the Singapore companies have to file their audited accounts?

No, following are the criteria which exempt Singapore companies from filing their audited accounts. These companies can file their unaudited accounts.

  1. If a company has no corporate shareholders; and
  2. Total number of company’s shareholders is not more than 20;
  3. The company’s annual revenue is not more than S$5 million.

Are there any incentives for a new startup in Singapore?

To promote and support Small and Medium Enterprises (SMEs), Singapore authorities have offered incentives to them. If a newly incorporated tax resident company in Singapore has less than 20 shareholders of which one is an individual shareholder controlling at least 10% of its shares, it will be taxed as follows:

  1. For first 3 years, its initial taxable income of S$100,000 is taxed at 0%, next taxable income of S$200,000 is taxed at 9% and income above S$300,000 is taxed at 17%.
  2. From the 4th year onwards, a tax rate of 9% is applicable to taxable income of up to S$300,000. Taxable income above the level of S$300,000 is taxed at 17%.

Can the dividends be transferred to shareholders overseas?

Yes, it is possible. Singapore taxation system does not levy tax on dividends paid to the shareholders of a company, if it has paid its corporate tax. It is a one-tier tax. The foreign country may or may not tax the income received through dividends. It depends on whether the country has any tax treaty with Singapore.

Can the company pay for its staff’s accommodation and car expenses?

Yes. It comes under non-cash benefits received by the employees from the employer. There are some tax implications for the company providing these facilities.

Is the royalty income is taxable?

Royalty is paid on use of copyrights, trademarks and patents. The royalty income accrued or received in Singapore is taxable.

Withholding Tax

What is Withholding Tax?

When a non-resident individual or a non-resident company gets paid by a Singapore resident or a company for its services or work done in Singapore, then a percentage of that payment is withheld. It is paid to IRAS as a Withholding Tax. This tax does not apply to Singapore residents or companies.

Is an entertainer liable to Singapore tax?

Yes, if the entertainer performs in Singapore then withholding tax must be deducted from the payment, even if it is paid outside of Singapore.

If the entertainer has worked in Singapore for more than 183 days then, is there any need to withhold taxes?

No! In this situation, the entertainer can be taken as a tax resident and there is no more a need to withhold taxes.
If he has paid more taxes than he should have then he must apply and get a refund.

Is the income of an entertainer performing in Singapore for 30 days taxable?

Yes! The entertainer’s income is taxable. Withholding tax applies to his income.

Generally, non-residents enjoy tax exemptions, if theirs is a short-term employment of not more than 60 days. However, a public performer or an entertainer does not qualify for the exemption.

Is cost of airfare and accommodation is deductible from the entertainer’s gross income?

Yes! You can deduct cost of airfare from the entertainer’s gross income. Cost of accommodation of the entertainer can also be deducted from the entertainer’s gross income only for a stay of less than 60 days. If the stay prolongs, the accommodation cost is not deductible.

Is there any need to withhold tax for a entertainer having work permit for Singapore?

No, if the validity of the work permit or the Employment Pass is not less than 1 year. Instead, when he ceases employment, it is necessary to withhold his any money pending tax clearance.

GST – Goods & Services Tax

What is GST and what is its current rate?

Goods and Services Tax in Singapore is a consumption tax levied by the government on supply of goods and services in Singapore. It is also levied on the goods imported in Singapore. GST is an indirect tax originally applied to lessen the dependence of Singapore economy on direct taxes like, corporate tax and individual income tax. It is only levied on the purchase of goods and services.

The current rate of GST in Singapore is 7%.

My annual turnover is less than S$1 million, should I register for GST?

If your turnover for the last 12 months is more than S$1 million or you expect it to be more than S$1 million for the next 12 months then, you are a right candidate for getting yourself registered for GST. It is required by the law.

  • You can also go for voluntary GST registration, if,
  • Your annual turnover is less than S$1 million; or
  • Your company supplies or exports goods outside Singapore; or
  • The financial services supplied by you are considered as the international services.

Is it required for me to collect GST, if my company exports goods or services out of Singapore?

No, absolutely not. There is no need for you to collect GST. Exports from Singapore are considered as Zero-rated supplies and they are not levied with GST.

ECI (Estimated Chargeable Income)

What is ECI and when is the due date for it?

The term ECI is the acronym for Estimated Chargeable Income. It is legally binding for a Singapore company to file its ECI statements with the Inland Revenue Authority of Singapore (IRAS). Every company must file it within 3 months from the end of its financial year end. Even a company with Zero-chargeable income for previous year of assessment, must file its “NIL ECI” statement with the IRAS.

Am I exempted from filing for ECI?

If you fulfill the following criteria, then you are exempted from filing your ECI:

Your company’s ECI is zero and its annual revenue is below S$1 million.

For a new startup company, ECI considered here is the amount before deduction of any exempt amount offered as a benefit by the authorities.

Following are some entities which are also exempted from filing their ECI statements;

  1. Foreign ship owners or charterers (Shipping returns are submitted by the Local shipping agent)
  2. Foreign universities operating in Singapore
  3. Designated unit trusts and CPF unit trusts approved by Singapore authorities.
  4. Section 43(2) of the Income Tax Act exempts some real estate investment trusts from filing their ECI statements
  5. Entities that are exempted by IRAS from filing their ECI statements

What to put in an ECI Form?

In its ECI statement, a company declares revenue from its main source of income. For this, it can use information from its audited or management accounts. The revenue from capital gains or from selling of fixed assets is not included in the revenue, thus it forms no part of ECI statement.
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