Singapore Individual Taxes: Comprehensive Guide

Personal tax liability in Singapore depends on a person’s tax residency status. Personal income tax rates for Singapore resident taxpayers are progressive. At low income, no or nominal personal tax is charged and the highest personal income tax rate is 24%, i.e. no income is taxed above this rate.

The employment income of non-residents who have stayed for more than 60 days in Singapore is taxed at a flat rate of 15% or the progressive resident tax rates, whichever results in a higher tax amount. Please note that certain types of non-resident income, such as director’s remuneration and consultation fees, are taxed at a rate ranging from 15% to 24% even if the individual has stayed in Singapore for under 60 days.

You are considered to be a tax resident of Singapore if you meet any one of the following:

• a Singaporean; or
• a Singapore Permanent Resident and have set up your permanent home in Singapore; or
• a foreigner who has been physically present in Singapore for 183 days or more during the relevant tax year.

You can file your annual income tax return using any of the following options:

• E-Filing at myTax Portal
• Paper Form through mail.

If you choose to file your returns via mail, IRAS will send you the corresponding paper tax form upon request. The online form to be filed in a particular year is available on March 1 of that year.

According to IRAS, each taxpayer must file one of the following forms depending on his or her occupation and tax residence status:

• For tax resident individuals — Form B1
• For self-employed — Form B
• For non-resident individuals — Form M.

To determine whether someone is an employee or is self-employed, you have to consider the individual’s contract and the nature of their relationship with the employer.

According to IRAS, you are employed (i.e. you are an employee) if you enter into a contract for service with your employer where your work is performed under the direction of your employer. On the contrary, you are considered self-employed if you do not perform work for others under such a contract for service.

As a self-employed person, you work for yourself and realize a business profit or loss. Generally, your income is derived from buying and selling goods or from providing services.

Note that all self-employed individuals are required to report the income earned from their business operations as business income. This income is part of their total personal income and is taxed at individual income tax rates.

In case of late or non-filing of tax returns, IRAS may take the following measures:

• Impose a late filing fee that can range from S$150 to S$1,000 and depends on the prior history of your filing and tax payment. Repeat offenders are likely to receive higher fees.
• Issue an Estimated Notice of Assessment (NOA).
• Issue a summons to attend the Court if IRAS has not received the required tax return and the payment of the late filing fee by the due date.
• Note that if you do not pay the penalty or fine imposed by the Court, you may be subject to imprisonment.

You must pay your taxes within one month from the date of the Notice of Assessment (NOA). Even if you have filed an objection, you are still required to pay the tax. If it is not paid by the due date, a 5% penalty is assessed. Subsequently, an additional 1% penalty will be imposed for every month that the tax is still unpaid, up to a maximum of 12% of the tax overdue.

Furthermore, an individual may face additional enforcement actions. These can include a) Travel Restriction Order (TRO) against your travel outside the country, b) legal actions against you by the IRAS, c) directives to your bank, employer, or lawyer to pay your debt to IRAS.

Generally, overseas income received in Singapore is not taxed in Singapore if the source of the income is outside Singapore. This exception includes income paid into a Singapore bank account. However, there are some circumstances under which overseas income may be taxable:

• You work in Singapore for a foreign employer, or your overseas employment is incidental to your Singapore employment.
• Your overseas employment income is for services rendered in Singapore.
• You are employed outside Singapore on behalf of the Government of Singapore.
• You have received the income in Singapore through a partnership.

Here are some of the common mistakes that you should avoid:

• Incorrect declaration of income
• Claiming inappropriate deductions
• Incorrect claim for CPF contributions (applicable to self-employed)
• Submitting incorrect documents
• Not clicking the “Submit Income Tax Return” button.

Employment income includes:

• Cash receipts, such as your salary, allowance for housing and travelling, bonus, leave pay, and gratuity
• Benefits-in-kind
• Gains from stock and share options.

Please take into account that income derived from outside Singapore, bank interest income, capital gains income, and dividends from Singapore companies are not taxable.

According to IRAS, “Other” employment income can refer to the following:

• Part-time income
• Allowances for traveling, entertainment, housing
• Benefits-in-kind
• Gratuity
• Pension, but excluding Singapore Government pension
• Commission reflected in Form IR8A
• Retrenchment benefits
• Taxable cash assistance.

If you work for more than one company, the process of filing your income depends on whether or not your employers are participating in the Auto-Inclusion Scheme for Employment Income. 3 different scenarios are possible:

• If all companies you work for are part of the Auto-Inclusion Scheme for Employment Income, you do not have to report the details about your income, since this information is already submitted by your employers and included in your tax assessment.
• If some of the companies are members of the Auto-Inclusion Scheme for Employment Income, you are required to fill in your total employment income only from the non-participating employers.
• Finally, if none of the companies is in the Auto-Inclusion Scheme, you have to report in the Main Tax Form the total amount of your income from all employers.

If you need to make changes after e-filing your tax return, you can re-file it via myTax Portal. Please note that re-filing must be done within 14 days from your previous submission. You can find more details about the procedure of re-filing your tax return.

In case you filed your returns via paper form, write an email to IRAS, and specify the changes in your return.