Taxes In Singapore: What Taxes Do Foreigners Have To Pay And How Much?

 In Economics & Finance, Singapore, The Finder

It may be globally known as a tax haven, but that doesn’t mean that you don’t have to pay taxes at all in Singapore. The Singapore Personal Income Tax structure is one of the friendliest and most competitive in the world, given that so much of the country’s economy is reliant on foreign investments. There are a plethora of tax advantages offered to offshore non-resident companies, as well as a multitude of Free Trade Agreements (FTAs) and Double Taxation Treaties (DTTs) for foreign companies.

The tax year runs from 1 January to 31 December in each calendar year, with income being assessed on a preceding year basis. Do note that the tax filing due date falls on April 15 (by paper) or April 18 (online filing) each year. Understanding the workings of the Singapore tax system is essential for anyone relocating to or already moving there.

The good news is that Singapore is a major financial hub and has a well-established network of financial institutions to help you acclimatise to your new home. We have consolidated a guide on everything you might need to know about paying taxes in Singapore as a foreigner to help you with this new transition! (Do note that this guide deals with individual income tax, as opposed to corporate taxes paid by businesses.)

This guide should not be used in isolation to make any financial decisions about your Singapore tax affairs and you should always consult a tax specialist for professional advice.

Income bracket

taxes in singapore
Photo credit: Markus Winkler / Unsplash

Personal income tax rates is based on a progressive structure that starts at zero percent and ends at 22 percent above $320,000. This means that the more you earn, the more taxes you pay. Despite this, Singapore’s personal income tax rates are actually one of the lowest in the world. In fact, there is no capital gain or inheritance tax. Individuals are taxed based only on the income earned in Singapore and (barring a few exceptions) you will not be taxed on the income you earn whilst working overseas, foreigner or not.

Filing of personal tax returns is mandatory for tax residents if your annual income is $20,000 or more. For tax residents with an annual income less than $20,000, you would not need to pay taxes. However, you might still need to file a tax return if you have been informed by the Singapore tax authority (IRAS) to submit your tax return.

What percentage of taxes do you pay in Singapore? 

Singapore resident

Chargeable IncomeRate (%)Gross Tax Payable ($)
On the first 20,000

On the next 10,000
0

2
0

200
On the first 30,000

On the next 10,000


3.50
200

350
On the first 40,000

On the next 40,000


7
550

2,800
On the first 80,000

On the next 40,000


11.5
3,350

4,600
On the first 120,000

On the next 40,000


15
7,950

6,000
On the first 160,000

On the next 40,000


18
13,950

7,200
On the first 200,000

On the next 40,000


19
21,150

7,600
On the first 240,000

On the next 40,000


19.5
28,750

7,800
On the first 280,000

On the next 40,000


20
36,550

8,000
On the first 320,000

In excess of 320,000


22
44,550
Note: This table is subject to change and should be used as a rough guide.

You can refer here for more information regarding how to calculate your personal income tax.

Foreign resident

Type of IncomeNon-resident individual tax rate / withholding tax rate
Director’s remuneration22 percent
Income derived from activity as a non-resident professional (consultant, trainer, coach, etc.)15 percent of gross income or 22 percent of net income
Income derived from activity as a non-resident professional (consultant, trainer, coach, etc.)10 percent concessionary rate
Other income e.g. rental income derived from a Singapore property22 percent
SRS withdrawal by a non-citizen SRS member22 percent
Interest, royalty etc.Reduced final withholding tax rate (subject to conditions) as follows:
Interest: 15 percent
Royalty: 10 percent

OR

22 percent if reduced final withholding tax rate is not applicable.
Pension22 percent
Note: This table is subject to change and should be used as a rough guide.

Different income tax rules apply in Singapore depending on the tax residency status of the individual. More information on foreign resident income tax can be found here.

Citizenship

taxes in singapore
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So you might be wondering, who can be considered a tax resident? If you’re a tax resident, that means you pay income taxes at local resident rates. Living in Singapore doesn’t automatically qualify you as a tax resident – given that, due to the rise of home-based work, you can work for a Singapore company and be based somewhere else completely in the world.

Here’s how you can figure out whether you are a tax resident of Singapore, and what that means!

What is your tax residency status?

According to the Inland Revenue Authority of Singapore (IRAS), you are a tax resident for a particular year of assessment if you are a:

  1. Singapore Citizen or Singapore Permanent Resident (SPR) who normally resides in Singapore except for temporary absences; or
  2. Foreigner who has stayed/worked in Singapore:
    1. for at least 183 days in the previous calendar year; or
    2. continuously for 3 consecutive years; or
  3. Foreigner who has worked in Singapore for a continuous period straddling 2 calendar years and your total period of stay* is at least 183 days. This applies to foreign employees who entered Singapore but excludes directors of a companypublic entertainers or professionals

    * including your physical presence immediately before and after your employment.

Foreigners issued with a work pass that is valid for at least 1 year will also be treated as tax residents. However, your tax residency status will be reviewed at the point of tax clearance when you cease your employment based on the tax residency rules. If your stay in Singapore is less than 183 days, you will be regarded as a non-resident.

How to file your tax returns?

taxes in singapore
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Thankfully, filing your income tax returns in Singapore is an easy process that can be done both online and on paper! You can simply log in to IRAS’s myTax Portal using your SingPass (if you are a PR, Passholder or selected Work Permit holder) or request for an IRAS PIN here. If you don’t have your SingPass yet, you can register for one here.

Once you have logged in, you just have to fill in information about your income (if your employer has not already done so) and tax reliefs being claimed. For those that prefer to file your taxes using a physical form, IRAS will send one to your mailing address when the time comes.

You can choose to file your returns online or by mail. IRAS will send you the appropriate paper tax form, upon request, the online form will be available from 1 March every year.

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