Taxes for Expats in Singapore

    Your complete guide to expat tax in Singapore:

    Tax rates

    2017 income tax rates

    Taxable Income Band SGD National Income Tax Rates
    1 - 20,000 0%
    20,001 - 30,000 2%
    30,001 - 40,000 3.5%
    40,001 - 80,000 7%
    80,001 - 120,000 11.5%
    120,001 - 160,000 15%
    160,001 - 200,000 18%
    200,001 - 240,000 19%
    240,001 - 280,000 19.5%
    280,000-320,000 20%
    320,000+ 22%


    Singapore tax-resident individuals, with certain exceptions, are subject to Singapore income tax on income accrued in or derived from Singapore.

    Foreign- source income received or deemed received in Singapore by an individual is exempt from income tax in Singapore, except for income received or deemed received through a partnership in Singapore.

    Certain investment income derived from Singapore sources by an individual also is exempt from income tax. Nonresidents are subject to Singapore income tax only on income accrued in or derived from Singapore.

    Tax rates for non-residents

    Taxes on employment income:

    The employment income of non-residents is taxed at flat rate of 15% or the progressive resident tax rates (see table above), whichever is a higher tax amount.

    Taxes on director's fee, consultation fees and all other income:

    From 2017, the tax rates for non-resident individuals (except certain reduced final withholding tax rates) has been raised from 20% to 22% . This is to maintain parity between the tax rates of non-resident individuals and the top marginal tax rate of resident individuals.

    The tax year is the calendar year.

    An individual is required to file their Singapore tax return in respect of income from the preceding year by the 15th of April of the following year, or the 18th of April if filed electronically.

    Penalties apply for late filing or for failure to file.

    Who pays

    Who pays tax in Singapore?

    Singapore tax-resident individuals, with certain exceptions, are subject to Singapore income tax on income accrued in or derived from Singapore.

    Foreign- source income received or deemed received in Singapore by an individual is exempt from income tax in Singapore, except for income received or deemed received through a partnership in Singapore.

    Certain investment income derived from Singapore sources by an individual also is exempt from income tax. Nonresidents are subject to Singapore income tax only on income accrued in or derived from Singapore.

    A Singapore citizen is considered a tax resident in Singapore if they normally reside in Singapore, except for temporary absences consistent with the claim of being a resident.

    A foreigner is considered a tax resident in Singapore if, in the calendar year preceding the year of assessment, they were physically present in Singapore or exercised an employment in Singapore (other than as a director of a company) for 183 days or more, or if they ordinarily reside in Singapore.

    A foreigner whose employment period in Singapore covers at least three consecutive years of assessment may be considered a tax resident in Singapore on a concessionary basis for all three years of assessment, even though the individual may have spent fewer than 183 days in Singapore in the year of arrival, departure, or both.

    An employee who has exercised employment in Singapore for fewer than 183 days during their year of arrival, but expects to exercise the employment in Singapore for a continuous period of at least 183 days straddling two consecutive calendar years, may be taxed as a resident in Singapore for both years of assessment.

    If in doubt, always seek professional taxation advice.

    How it works

    How is income taxed in Singapore?

    Expatriate tax advice on employment income -

    Taxable employment income includes cash remuneration, wages, salary, leave pay, directors' fees, commissions, bonuses, gratuities, perquisites, gains received from employee share plans and allowances received as compensation for services. Benefits-in-kind derived from employment, including home-leave passage, employer-provided housing, employer-provided automobiles and children's school fees, are also taxable. Certain of these benefits receive special tax treatment. However, the special treatment for employer-provided housing ceased, effective from the 2015 assessment year.

    Directors fees paid to a non-resident are taxed at 20%.

    Self-employment and business income - Self-employment income subject to tax is based on financial accounts prepared under generally accepted accounting principles. Adjustments are made to the profits or losses according to expat tax law. Business income is aggregated with other types of income to determine taxable income.

    Income from a trade, business, profession or vocation paid to a non-resident is taxed at 20%.

    Income from professional services paid to a non-resident is taxed at 15%. This is a final withholding tax on the gross amount, unless the non-resident professional elects to be assessed at a rate of 20% on net income.

    Investment income - Under the one-tier system, dividends paid by Singapore tax-resident companies are exempt from income tax in the hands of shareholders, regardless of whether the dividends are paid out of taxed income or tax-free gains.

    Dividends, other than tax-exempt and one-tier dividends, are taxed at the applicable income tax rates.

    Singapore-source investment income (that is, income that is not considered to be gains or profits from a trade, business or profession) derived directly by individuals from specified financial instruments, including standard savings, current and fixed deposits, is exempt from tax. Examples of such income include interest from debt securities, annuities and distributions from unit trusts.

    Interest (excluding tax-exempt interest from approved banks, finance companies, loans and certain qualifying debt securities) paid to non-residents is taxed at 15%.

    Royalties for the use of, or right to use, movable property and scientific, technical, industrial or commercial knowledge or information paid to non-residents are taxed at 10%.

    Net rental income is aggregated with other types of income and taxed at the applicable rates.

    Rent or other payments for the use of movable property paid to non-residents is taxable at 15%.

    Further expat tax rules apply to taxation of employer-provided stock options and share ownership plans. Professional expatriate tax advice is highly recommended. 

    Here's a useful link for determining your residency status.

    DTAs

    Taxes for expats in Singapore: Double tax relief and tax treaties

    Relief from double taxation is granted on income derived from professional, consultancy and other services rendered in countries that do not have double tax treaties with Singapore.

    Double tax relief is also available for foreign taxes levied on expat’s income taxed in Singapore if Singapore has a tax treaty with the country concerned and if the individual is resident in Singapore for tax purposes.

    Singapore has entered into tax treaties with 81 countries.

    Individuals who receive employment income in Singapore and who are tax residents of countries that have concluded double tax treaties with Singapore may be exempt from Singapore income tax if their period of employment in Singapore does not exceed a certain number of days (usually 183) in a calendar year or within a 12-month period and if they satisfy certain additional criteria specified in the treaties.

    Social security

    Social security for expats in Singapore

    The Central Provident Fund (CPF) is a statutory savings scheme to provide for employees' old-age retirement in Singapore. Only Singapore citizens and permanent residents working in Singapore are required to contribute to the CPF. All foreigners (including Malaysians) are exempt from CPF contributions. Foreigners may not make voluntary contributions to the CPF.

    Only employees who are Singapore citizens or Singapore permanent residents (under immigration rules) and working in Singapore are required to contribute to the CPF, at a rate of up to 20%.

    Graduated rates may apply for the first two years after the employee attains permanent residence. The employer’s statutory contribution rate to the CPF is up to 17%, subject to a monthly ordinary wage ceiling of SGD 6,000 and a total annual wage ceiling of SGD 102,000. The contribution is remitted by the employer (in respect of its own contributions and that of the employee).

    Self-employed individuals who carry on a trade, business, profession or vocation may also participate in the CPF scheme.

    A Supplementary Retirement Scheme (SRS) exists and may be advisable for expatriates to look into.

    Residency

    Expat advice on residency

    Expats are resident for tax purposes if, in the year preceding the assessment year, they reside in Singapore except for such temporary absences from Singapore as may be reasonable and not inconsistent with a claim by such persons to be resident in Singapore. This also includes persons who are physically present or who exercise employment (other than as a director of a company) in Singapore for at least 183 days during the year preceding the assessment year.

    Relevant to expat advice, a concession is available for foreign employees whose employment period straddles two calendar years. Under this concession (commonly known as the “two-year administrative concession”), the individual is considered resident for both years if they say or work in Singapore for a continuous period of at least 183 days straddling the two years, even if fewer than 183 days were spent in Singapore in each year.

    Non-resident expats employed for not more than 60 days in a calendar year in Singapore are exempt from tax on their employment income derived from Singapore. This exemption does not apply to a director of a company, a public entertainer or a professional in Singapore.

    Under the Not Ordinarily Resident (NOR) scheme, a qualifying individual may enjoy tax concessions for 5 consecutive assessment years, including time apportionment of Singapore employment income, if certain conditions are satisfied.

    CGT/IHT

    Do I have to pay capital gains tax and inheritance tax in Singapore?

    Singapore does not impose tax on capital gains. However, in certain circumstances, the tax authorities consider transactions involving the acquisition and disposal of real estate, stocks or shares to be the carrying on of a trade.

    There is no inheritance or estate tax in Singapore.

    However, on this point, do not assume that just because you've expatriated to live in Singapore that your estate will not be liable to inheritance tax (IHT) in your old home nation, or any nation where you hold assets.  For example, those domiciled in Britain remain liable for IHT on their worldwide estate.

    If you are concerned about mitigating your IHT liability, we'd like to offer you a free initial consultation to determine whether we can help you.

    Finally...

    We believe the above information is accurate, however tax rates and rules can change, and we are NOT tax experts. Therefore, please do not rely exclusively on the information to determine your liability for tax.

    Speak to a local tax expert for personalised advice, or consult an international taxation consultancy.

    If you'd like our help to source someone to assist you, please get in touch and we will do all we can to help.

    Relax, and join the 10,000 other international investors who have made the smart decision to let us help.

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