Singapore offers some of the lowest individual tax rates in the world making it an ideal location for high-income earners. In this article, we will discuss the salient points about personal taxes in Singapore including:
- Tax residency and tax rates
- Taxes on foreign income
- Income exempt from tax
- Tax deductions
- Tax filing requirements and procedure
Key facts about personal taxes
- Singapore tax residents are taxed at a progressive rate ranging from 0%-22%
- Non-tax residents are taxed at a rate between 15%-22%
- There are no taxes on capital gains, dividends or inheritance
- With a few exception, foreign sourced income is exempt from taxes levied by Singapore
Personal tax rates
The amount of tax an individual must pay depends on his or her tax residency status. In Singapore, the following individuals are considered to be tax residents of the country:
- Singapore citizens
- Singapore permanent resident
- Any foreigner who has worked or stayed in Singapore for 183 days or more
Tax rates for Singapore tax residents
Tax residents are taxed at a progressive rate that ranges from 0%-22%. The table below provides the current tax rates for individual income at different income brackets:
|Taxable income||Income tax rate|
|Next S$10,000 (up to S$30,000)||2%|
|Next $S10,000 (up to S$40,000)||3.5%|
|Next S$40,000 (up to S$80,000)||7%|
|Next $S40,000 (up to S$120,000)||11.5%|
|Next S$40,000 (up to S$160,000)||15%|
|Next S$40,000 (up to S$200,000)||18%|
|Next S$40,000 (up to S$240,000)||19%|
|Next S$40,000 (up to S$280,000)||19.5%|
|Next S$40,000 (up to S$320,000)||20%|
A non-resident is an individual who has stayed or worked in the country for under 183 days. Non-residents must pay taxes at the following rates:
Non-resident tax rates
|Number of days in Singapore||Tax rate|
|60 days or fewer||0%|
|61-182 days||Flat rate of 15% OR
A progressive tax rate capped at 22%–whichever results in the higher amount
Certain types of non-resident income are taxed at a rate ranging from 15%-22%—even if the individual has stayed in Singapore for under 60 days. These types of income in called “non-exempt income” and these include:
Tax rates for non-exempt income
|Income type||Tax rate|
|Income earned as a public entertainer||15%|
|Income earned as a consultant, trainer or coach||15%|
Tax on foreign income
In general, income earned from employment outside of Singapore is not taxable. This includes income that has been received in a Singapore bank account. Furthermore, qualifying foreign sourced income does not need to be declared.
However, foreign income is taxed under the following conditions:
- The foreign employment is incidental to Singapore employment. This means the position requires the individual to work and travel outside of Singapore but the position is based in Singapore.
- The individual works in Singapore for a foreign employer
- The income was received in Singapore through a partnership (unless the income qualifies for exemption)
- The individual earned the income outside of Singapore while working for the Singapore government.
- The individual received income in Singapore for professional, technical, consultancy or other services completed in a location overseas that does not qualify as a fixed place of operation. This includes locations that are used temporarily or for preparatory and auxiliary activities to the main service.
Income exempt from tax
Capital gains: Singapore does not tax any income that can be considered capital gains including the sale of fixed assets, stock or bonds or intangible assets such as goodwill.
Dividend income: Singapore does not tax dividends issued by Singapore companies; in certain cases, dividends from Hong Kong and Malaysia based companies are also not taxed.
Inheritance: In 2008, Singapore removed inheritance tax — also known as estate duty — on the assets of a deceased individual. Common estate assets that are no longer taxed include:
- immovable property
- bank accounts
- publicly listed shares
- items in a safe deposit box
In addition to the already low rates, to reduce the tax burden on individuals even further, Singapore allows for the following tax deductions:
Employment expenses: Individuals can deduct expenses incurred as a part of their employment as long as the expense meets the following criteria:
The expense was incurred while carrying out the requirements of the job The expense was not reimbursed by the employer The expense was not a capital expenditure (such as the purchase of a fixed asset) The expense was not for personal use
Examples of deductible employment expenses include:
- meal expense
- transport expense
- car services
- medical reimbursements
- housing expense that is related to employment
Donations: Individuals can claim donations to qualifying charitable organizations as deductions. Examples of donations include:
- cash donations
- shares donations
- artifact donations
- land and building donations
Expenses incurred from rental income: Individuals can claim rental income expenses under the following conditions:
- The expense was solely for the purpose of producing rental income and
- The expense was incurred while a tenant was living in the property
Self-improvement tax relief: Singapore tax residents can receive tax rebates and relief for the following items:
- Course fee relief — Reimbursements on course fees for individuals who invest in upgrading their skills and improve their employability
- CPF Cash Top Up — Tax relief for individuals who set money aside for retirement
- Supplementary Retirement Scheme (SRS) Relief — Tax relief to encourage individuals to save for retirement beyond their CPF saving
Deduction for angel investors: Singapore allows angel investors to deduct their investments in new startups under the following conditions:
- The angel invests at least $100,000 of qualifying investment in a qualifying startup company within 12 months of the initial investment and
- The angel holds the investment for a continuous period of two years from the date of the last qualifying investment.
Similar to corporate income taxes, individuals must file taxes every year with the Inland Revenue Authority of Singapore (IRAS). There are two deadlines to file individual income taxes:
- E-filing deadline: April 18
- Paper filing deadline: April 15
Taxes are assessed based on the income earned from January 1 to December 31 of the previous year (ie personal taxes filed in 2018 cover the income earned from January 1 to December 31 of 2017).
Individuals who make less than S$22,000 do not have to pay taxes in Singapore; however, they are still required to file taxes with IRAS.
Personal taxes can be filed online or by mail. To file, IRAS requires each taxpayer to file one of the following forms based on his or her occupation and tax residency status:
- Form B1 – Employed individuals
- Form B – Self-employed individuals
- Form M – Non-resident individuals
After taxes have been filed, the Singapore government will issue a tax bill to the individual known as a Notice of Assessment (NOA) between May and September. Once the the NOA has been received, the individual has 30 days to pay the taxes due.
If the individual disagrees with the NOA, he or she can file an Objection of Assessment to correct the tax bill. An Objection of Assessment must be filed within 30 days of receiving the tax bill. Note that the individual is still obligated to pay the full amount on the NOA within 30 days even if he or she disagrees with the tax bill.
If taxes are not paid within 30 days, IRAS will issue a 5% penalty.
- How to register a Singapore company
- Corporate Tax in Singapore
- Internal Revenue Authority of Singapore (IRAS)