A person is tax resident in Singapore if he
or she spends at least 183 days in a
year or straddling two years in Singapore,
or if the average number of days spent
in Singapore over a three-year period
equates to at least 183 days per year.
Note that the 183-day rule generally does
not apply to a director of a company.
A foreign person who has become
a Singapore Permanent Resident and has
established his or her home in Singapore
is resident for tax purposes.
All individuals pay tax on income earned
or received in Singapore; overseas income
received in Singapore after January 1, 2004, including income paid into a Singapore bank account
(but excluding overseas income received through a partnership in Singapore), is not taxable.
Income tax is assessed based on a preceding year basis.
|Chargeable income||Rate (%)||Gross tax payable (S$)|
There is a one-off personal income tax rebate of 20% for resident individuals, subject to a cap of SGD2,000, for tax payable for year of assessment 2009.
The income tax rate for non-residents’ employment income is either 15% or the relevant resident tax rate, whichever produces the highest sum. Director's fees, consultation fees and most other income are taxed at 20%, which is generally withheld at source.
Certain other payments to non-resident individuals are subject to withholding tax at source.
The majority of dividend payments received are exempt from income tax.
Capital Gains Tax
Generally, capital gains realised from the sale of property in Singapore, or derived from buying and selling shares or other financial instruments, are not subject to tax.
If, however, such sale of property or buying and selling of shares and other financial instruments are regarded as a trade, the gain may be regarded as taxable income.
Estate Duty and Estate/Trust Income
There is no estate duty in Singapore.
However, assets that continue to produce income during the period one day after death until the end of the administration period are deemed to be either estate or trust income; such income is therefore subject to income tax until the assets are sold or transferred. Note that foreign-sourced income remitted during the period January 22, 2009 and January 21, 2010 is tax exempt.
Stamp duty is payable on certain executed documents relating to properties and shares, or interest in properties and shares. Such documents include a lease, sale, purchase, gift or mortgage of property. Liability arises once the document is executed, even if the transaction itself has been aborted.
The amount of duty payable varies according to the transaction. For example, in the case of a mortgage, the duty is S$4 for every S$1,000 or part thereof, subject to a maximum duty payable of S$500.
Real Estate Taxes
Property tax is charged on immovable property, including a house, building and land. The amount of tax due is calculated based on a percentage (tax rate) of the annual value of a property. The tax rate is 10%, or 4% where the property is granted an owner-occupier concession.
From January 1, 2011, the 4% tax rate will be replaced by a three-tier tax rate based on the annual value, as follows:
|Annual value||Tax rate|
Duties and/or goods and services tax (GST) apply to all goods imported into or manufactured in Singapore.
Dutiable goods fall into four broad categories: intoxicating liquors, tobacco products, motor vehicles and petroleum products. Duties include S$48, S$70 or S$90 per litre of intoxicating liquor multiplied by alcoholic strength; S$300 per kg for the majority of tobacco products; 20% on motor vehicles; 12% on motorcycles.
There are additional documentation and other fees.
Taxation of Foreign Employees
The income tax rate for expatriates’ employment income is either 15% or the relevant resident tax rate, whichever produces the highest sum. Directors’ fees, consultation fees and most other income are taxed at 20%, which is generally withheld at source.
Tax clearance must be sought from the Inland Revenue Authority of Singapore (IRAS) where a foreign employee ceases to work for the company, is posted to work in an overseas location, or plans to leave Singapore for a period of more than three months. Certain exemptions from this requirement apply, where the foreign employee:
- has worked in Singapore for a period not exceeding 60 days in a calendar year (this does not apply to directors, public entertainers and people exercising a profession, vocation or employment of a similar nature);
- worked for less than 183 days in a calendar year, or a continuous 183-day period straddling two years, and his or her earnings were less than S$20,000 per year (this does not apply to directors, public entertainers and people exercising a profession, vocation or employment of a similar nature);
- worked in Singapore for three continuous years or more and earned less than S$20,000 per year;
- is transferred to another company in Singapore within the group due to merger, takeover or restructure; or
- is away from Singapore for training or business purposes (excluding overseas posting) for three to six months.
The employer must withhold all moneys owed to the foreign employee until clearance is given by the IRAS, or after 30 days from the date the IRAS receives notification from the employer, whichever is earlier.