Everything You Need to Know about the Singapore Income Tax

Singapore doesn’t have any capital gains tax and estate duty. You don’t need to pay them.

Everything You Need to Know about the Singapore Income Tax

Singapore has one of the lowest tax rates in the world but is strict in terms of the tax that needs to be paid. To help you with that here are some essential pieces of information about the income tax in Singapore:

Who Needs to pay Tax in Singapore?

Everyone residing and earning income in Singapore has to pay income taxes. This also applies to foreigners in the city-state. However, there is an exception between residents and non-residents for tax purpose, which we discuss below. Singaporeans outside Singapore don’t need to pay taxes in the country, however, there are a few exceptions.

Who is a Tax Resident in Singapore?

If you are among these three categories, you are a Singapore tax resident, and will have to pay the tax as normal:

  • Singapore citizens
  • Singapore Permanent Residents
  • Foreign workers who have resided in Singapore for at least 183 days or more in a tax year.

Tax Rates for Tax Resident in Singapore?

The tax rate is progressive, starting from 0% to 22%. The amount you pay depends on the income you made on the tax year.

Here is a table:

Income

Tax Rate

First 20,000

0%

Next 10,000

2%

Next 10,000

3.5%

Next 40,000

7%

Next 40,000

11.5%

Next 40,000

15%

Next 40,000

18%

Next 40,000

19%

Next 40,000

19.5%

Next 40,000

20%

Above 320,000

22%

*The amount is in SGD.

Who is a Non- Resident in Singapore?

Anyone who has been in Singapore for less than 183 days is a non-resident. This could be a tourist, a visitor, or someone who has been in the city-state for a short term residence.

Tax Rates for Non-Residents in Singapore

Here are the conditions:

You don’t need to pay taxes if you are in Singapore for short-term employment of up to 60 days. However, the exemption is not applicable if you are a public entertainer (for example, an artist), or a company director. Furthermore, you will need to pay taxes if you are in Singapore for a short-term, but actually are doing your profession, for example, queen’s counsel, consultants, coaches, etc.

If you are in Singapore for 61 to 182 days, you may have to pay 15% of your tax or the normal (progressive) tax rate as in the table in the above section, whichever is higher.

Consultant fees, director fees and remuneration, and other related incomes are taxes between 15% and 22%.

Where Do You Pay Taxes in Singapore?

You file your taxes with the IRAS, which is the Inland Revenue Authority of Singapore. Normally, you don’t need to file a return if your income is less than $22,000, however, you may still need to fill a form if you have been informed by a tax authority, where you will have to declare zero tax.

Tax residents should fill form B1, self-employed should go for form B, and non-resident individuals need to fill form M. You can fill the form online, or go to IRAS’s physical office.

Filing my own Tax is Confusing. What Should I Do?

Well, there are many services, mostly from accounting firms that help with the Singapore income tax. They will help you find your tax amount, and later to pay it.

When Should You Pay Taxes in Singapore?

You need to fill your taxes in the month of April for each year. In 2020, the deadline was 15 April for paper and 18 April for e-filing. After that, you normally get your Notice of Assessment between May and September. You need to pay within 30 days of recieving the tax bill.

How Much is the Capital Gains Tax and Estate Duty in Singapore?

Singapore doesn’t have any capital gains tax and estate duty. You don’t need to pay them.

More Info:- https://www.3ecpa.com.sg