In Singapore, one’s tax liability depends on your tax residency status. This in turn depends on how much time one has lived and worked in the city-state. (Do note the cut-off periods are 60 days and 183 days respectively.)
Individuals, depending on their tax-residency status, are liable to pay income tax on all income derived from or accrued in Singapore. This includes salaries and bonuses (contractual or non-contractual) and employment benefits (e.g., housing and stock options).
In general, Singapore’s tax administrator, Inland Revenue Authority of Singapore (IRAS), categorizes non-Singaporeans and non-Singapore Permanent Residents as foreigners for tax purposes. However, if you are given a work pass that is valid for one year or more, you will be regarded as a Singapore tax resident.
How Do I Know My Tax Status?
At least 183 days
You will be regarded as a tax resident if you stay or work in Singapore:
- for a minimum of 183 days in a calendar year. Under the country’s regulations, a foreigner is regarded as a tax resident if they stay or work in Singapore for at least 183 days. It is important to note that weekends, public holidays, and any temporary absences from work are counted into the aforementioned 183 days. Notably, the foreigner is allowed to claim tax reliefs (discussed below) when filling up Form B1 for tax-residents. However, any foreign-sourced income they bring into Singapore is tax-exempt.
- for at least 183 days for a continuous period spanning two years. This applies to foreign employees who arrived in Singapore from January 1, 2007. However, this does not include directors of a company, entertainers or professionals. If the foreigner lives or works in Singapore for an uninterrupted period of no less than 183 days straddling two years, they will be classified as a tax resident for two years in accordance with the two-year administrative concession.
- continuously for three successive years. If the foreigner stays or works in Singapore continuously for three consecutive years, they are regarded as a tax resident for all the three years as per the three-year administrative concession. This rule can also be applied if they are present in Singapore for a minimum of 183 days in the first and third year. The progressive resident rates are from 0 to 22 percent.
Related Article: What Are the Property Taxes in Singapore For Foreigners?
Less than 183 days
Foreigners are regarded as non-residents for tax purposes if they stay in Singapore for fewer than 183 days in a calendar year. For these residents, they will not be eligible for tax reliefs when filing up Form M (tax form for non-residents). But, the income they earn in Singapore is taxed at a fixed rate of 15 percent. (The same is true for progressive resident rates if it results in a higher tax liability.) Notably, from YA 2017, Director’s fees and other income will see a tax rate of 22 percent flat. For earlier YAs, this rate is 20 percent.
Less than or equal to 60 days
Foreigners who are in Singapore for less than or equal to 60 days, IRAS will not charge them any taxes. However, this exemption will not be applicable to company directors, public entertainers, foreign experts, foreign speakers, queen’s counsels, consultants, trainers, coaches, etc. Similarly, this rule will not apply if your non-attendances from Singapore are incidental to your Singapore employment. If that is the case, your total income (including earnings for services rendered outside Singapore) will be fully taxable in Singapore.
But What If I’ve Paid Tax on My Foreign Income Already?
This is not an issue as overseas income derived outside Singapore, Singapore dividends, and bank interests are tax-exempt in Singapore.
When Are Tax Returns Filed in Singapore?
Income is assessed on a preceding year basis, ending December 31. So you must file your income tax returns by April 15 of the following year. You can usually expect to receive the income tax bills by September.
What Are the Personal Tax Rates in Singapore?
In Singapore, tax residents are taxed at progressive tax rates. Non-residents are taxed at the flat rate of 15% or the resident rates — whichever results in a higher tax amount on your employment income. Director’s fees and other income are taxed at the prevailing rate of 20% (22% from the Year of Assessment 2017). Non-residents are not entitled to any tax reliefs.
Related Read: Individual Income Tax Rates
Are There Any Other Tax Schemes in Singapore?
A unique category of individuals, who are classified as Not Ordinarily Residents (NOR), are given favourable tax treatment for five years of assessment.
To be eligible, these residents must be:
- a Singapore non-resident for tax purposes in the past three years of assessment; and
- in the assessment year when the individual becomes eligible for the NOR status, he or she must have been a Singapore tax-resident
Under the scheme:
- a NOR taxpayer pays income tax on only his or her part of the employment income that correlates with the number of days he or she spends in Singapore. This is provided they had spent a minimum of 90 days outside Singapore for business reasons and their total Singapore employment income is at least $160,000. If the tax on the apportioned income is less than 10% of their total employment income, they will need to pay a tax of 10% of their total employment income.
- a NOR taxpayer qualifies for tax exemption on contributions made by their employer to a non-obligatory overseas pension fund that would otherwise be taxable in their hands.
Related Article: What to Do If You Miss the Tax Filing Deadline?
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