Personal Income Tax in Singapore: A Guide to Foreigners
Working and living in Singapore has innumerable advantages. You get the opportunity to indulge yourself with the finest country in Asia to work, live, and play. In addition, you can take pleasure in touring other prominent countries in Southeast Asia such as Thailand, Cambodia, Vietnam, Indonesia, and Malaysia. They’re just 2-hour flight from Changi airport.
Apparently, the leading attraction for foreigners desiring to move in Singapore is the country’s amicable tax policies.
Who Are Non-residents?
Non-residents are foreigners who work or live in Singapore for 183 days or below in a fiscal year.
As a foreigner:
- Your earnings are tax-exempted if you work in Singapore for 60 days or less in a fiscal year.
- Your income tax rate is 15% if you work or live in Singapore for 61-182 days in a fiscal year.
- If you work in Singapore for 183 days and more in a fiscal year, your foreigner income tax will be at resident rates.
- In case you’re working in Singapore for an on-going period of at least 183 days beyond 2 years, income tax will be at resident rates.
- If you’re working in Singapore for 3 successive years, income will also be at resident rates.
Foreigners are subject to tax on all Singapore-sourced income. Tax exemptions are applicable for income that’s deposited in approved Singaporean banks. The income of foreigners in Singapore is tax at 15% (on the gross amount) without deductions for earn income reliefs and contribution to provident funds. Their income can also be tax at resident rates, whichever is higher. Personal income tax rates (resident rates) in Singapore depends on the individual’s chargeable income.
As a non-resident, you will be taxed as below:
- Your income from employment is tax-exempted if your employment is only for 60 days or below in a year. This tax exemption is not applicable if you work as a public entertainer, a director of a company, or you exercise your profession in Singapore. Coaches, trainers, consultants, foreign speakers, and foreign experts are categorize as practicing professionals.
- Your overall income earned is taxable if you work in Singapore for 61-182 days per annum. To save tax, you can claim donations and expenses but is not allow to claim personal-reliefs (as parent relief, eligible course fees, earned income relief, etc.). Employment income is 15% taxable.
- Consultant fees, director fees, and other earnings are taxed at 20%.
Income Tax Returns
It is every taxpayer’s responsibility and obligation to file annual tax returns. Fill-up forms must be tender to Singapore Tax Department every April 15. In case, your yearly income is S$22,000 above, the compulsory filing of tax return is required. If your yearly income is lower than S$22,000, there is no need to pay taxes. However, you need to file tax returns if there is a notice from the tax authority. Hence, it is a must to declare a zero income even if you have not incurred any earnings in the previous years. It has to be submit by April 15.
The Singapore’s regulator of taxes (Inland Revenue Authority of Singapore/IRAS), handles non-Singaporean permanent residents as foreigners. In case, you are a foreigner, you are accountable to revenue tax on all earnings obtained from or acquired in Singapore. However, the income tax depends on your tax residency status.
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