Personal Income Tax in Singapore stands at 22%. Starting in 2024, this rate will increase to 24%. Singapore imposes a progressive individual income tax system for tax residents.
Taxpayers must know the updated tax rate and taxable income for the year 2023-2024. Here is a detailed discussion of the Singapore personal income tax.
Income Tax Singapore
Income tax stands as both a fiscal and jurisprudential commitment.
It bestows upon individuals a significant duty, demanding that anyone whose earnings surpass a stipulated threshold must, as a matter of legal obligation, contribute a portion of their hard-earned income to the nation’s coffers.
The multifaceted terrain of income tax in India encompasses tax rates, income brackets, and regulations, all meticulously orchestrated by the government.
These intricacies are known to evolve periodically, ensuring that taxpayers must remain vigilant and adapt.
Here’s how the progressive tax rates for tax residents will be structured:
- Income up to S$500,000 (approximately US$370,000) will be taxed at varying rates.
- Income between S$500,000 and S$1 million will be taxed at 23%.
- Income exceeding S$1 million (approximately US$741,000) will be taxed at the highest rate of 24%
Singapore Individual Income Tax Rate
In Singapore, tax residents are subject to a progressive resident tax rate, as outlined below. If your annual income is S$20,000 or higher, it is mandatory to file a personal tax return.
Tax residents with annual incomes below S$20,000 are not required to pay tax, but they may still need to file a tax return if instructed to do so by the Singapore tax authorities.
Resident Tax Rates Singapore
| Chargeable Income | Tax Rate (%) | Gross Tax Payable ($) |
| First $20,000 Next $10,000 | 0 2 | 0 200 |
| First $30,000 Next $10,000 | – 3.50 | 200 350 |
| First $40,000 Next $40,000 | – 7 | 550 2,800 |
| First $80,000 Next $40,000 | – 11.5 | 3,350 4,600 |
| First $120,000 Next $40,000 | – 15 | 7,950 6,000 |
| First $160,000 Next $40,000 | – 18 | 13,950 7,200 |
| First $200,000 Next $40,000 | – 19 | 21,150 7,600 |
| First $240,000 Next $40,000 | – 19.5 | 28,750 7,800 |
| First $280,000 Next $40,000 | – 20 | 36,550 8,000 |
| First $320,000 Next $180,000 | – 22 | 44,550 39,600 |
| First $500,000 Next $500,000 | – 23 | 84,150 115,000 |
| First $1,000,000 In excess of $1,000,000 | – 24 | 199,150 |
Non-Resident Tax Rates Singapore
| Chargeable Income | Tax Rate (%) | Gross Tax Payable ($) |
| First $20,000 Next $10,000 | 0 2 | 0 200 |
| First $30,000 Next $10,000 | – 3.50 | 200 350 |
| First $40,000 Next $40,000 | – 7 | 550 2,800 |
| First $80,000 Next $40,000 | – 11.5 | 3,350 4,600 |
| First $120,000 Next $40,000 | – 15 | 7,950 6,000 |
| First $160,000 Next $40,000 | – 18 | 13,950 7,200 |
| First $200,000 Next $40,000 | – 19 | 21,150 7,600 |
| First $240,000 Next $40,000 | – 19.5 | 28,750 7,800 |
| First $280,000 Next $40,000 | – 20 | 36,550 8,000 |
| First $320,000 In excess of $320,000 | – 22 | 44,550 |
Read Also- Withholding Tax Rate in Singapore
Non-resident Tax Rates Singapore
For non-resident individuals in Singapore, the tax rates differ based on the type of income they earn:
1. Taxes on Employment Income:
- Non-resident individuals’ employment income is subject to taxation at a flat rate of 15%.
Alternatively, they may be taxed at the progressive resident tax rates (as indicated in the table above), whichever results in a higher tax amount.
2. Taxes on Director’s Fees, Consultation Fees, and All Other Income:
- For non-resident individuals, the tax rate is currently set at 22%
- This rate applies to various types of income, including rental income from properties, pension income, and director’s fees.
- However, it does not apply to employment income, which is subject to a flat 15% tax rate.
Withholding Taxes on the Income of Non-resident Individuals Singapore
Withholding taxes on income of non-resident individuals vary depending on the type of income and the Year of Assessment (YA) involved. Here are the withholding tax rates for non-resident individuals:
1. Remuneration including director’s fees received by non-resident directors:
- From YA 2017 to YA 2023: 22%
- From YA 2024 onwards: 24%
2. Income received by non-resident professionals (e.g., consultants, trainers, and coaches) for services performed in Singapore:
- From YA 2017 to YA 2023: 15% of gross income or 22% of net income
- From YA 2024 onwards: 15% of gross income or 24% of net income
3. Income received by non-resident public entertainers for services performed in Singapore:
- 10% concessionary rate up to 31 Mar 2022; 15% concessionary rate from 1 Apr 2022 for both periods.
4. SRS withdrawals received by non-Singapore SRS account holders:
- From YA 2017 to YA 2023: 22%
- From YA 2024 onwards: 24%
5. Interest, commission, fee, or other payment in connection with any loan or indebtedness:
- 15% reduced final withholding tax rate (subject to conditions) or 22% if reduced withholding tax rate is not applicable for both periods.
6. Royalty or other lump sum payments for the use of movable properties:
- 10% reduced final withholding tax rate (subject to conditions) or 22% if reduced withholding tax rate is not applicable for both periods.
Non-resident individuals need to understand these rates and comply with Singapore’s tax regulations when receiving such income.
Singapore Tax Rate on Foreign Income
In general, income earned from employment outside of Singapore is not subject to taxation, even if it’s received in a Singaporean bank account. Additionally, certain qualifying foreign income does not require a declaration.
However, foreign income becomes taxable under the following circumstances:
- Foreign employment is related to Singapore employment, meaning the position involves working and traveling outside Singapore but is based in Singapore. When an individual works in Singapore for a foreign employer.
- When income is received in Singapore through a partnership (unless it qualifies for exemption).
- When an individual earns income outside Singapore while working for the Singapore government.
- When an individual receives income in Singapore for professional, technical, consultancy, or other services performed in a location overseas that doesn’t qualify as a fixed place of operation. This includes temporary or auxiliary locations for main services.
Income Exempt From Tax in Singapore
- Capital Gains: Singapore does not impose taxes on income classified as capital gains. This includes profits from the sale of fixed assets, stocks, bonds, or intangible assets like goodwill.
- Dividend Income: Dividends distributed by Singaporean companies are not subject to taxation. Additionally, in certain situations, dividends from companies based in Hong Kong and Malaysia may also be exempt from taxation.
- Inheritance: In 2008, Singapore abolished inheritance tax, commonly known as estate duty, on the assets of a deceased individual.
This means that assets like immovable property, bank accounts, publicly listed shares, and items in a safe deposit box are no longer subject to taxation upon inheritance.
Singapore Income Tax Deductions
Singapore provides various tax deductions to ease the tax burden on individuals, including deductions for employment expenses like meal and transportation costs.
Donations to qualifying charitable organizations are eligible for deductions, covering cash, shares, artifacts, and land and building donations.
Individuals can deduct rental income-related expenses, provided they are incurred solely for generating rental income and while a tenant occupies the property.
Tax residents in Singapore can benefit from self-improvement tax relief, including course fee relief for skill enhancement, CPF Cash Top-Up for retirement savings, and Supplementary Retirement Scheme (SRS) Relief for additional retirement savings.
Angel investors in Singapore can deduct investments in qualifying startups if they invest a minimum of $100,000 within 12 months of the initial investment and maintain the investment continuously for two years from the date of the last qualifying investment.
Singapore Income Tax System
Territorial Taxation: Singapore follows a territorial basis of taxation. This means that companies and individuals are primarily taxed on income generated within Singapore.
Foreign-sourced income is taxed when it is remitted or deemed remitted into Singapore unless it was already taxed in a jurisdiction with headline tax rates of at least 15%.
- Corporate Tax Rate: Singapore’s corporate tax rate is capped at 17%. This competitive rate continues to attract foreign investment.
- Personal Tax Rates: Singapore’s personal tax rates range from 0% to 22% for residents, with the highest rate applied to income exceeding S$320,000. Non-residents are subject to a flat tax rate ranging from 15% to 22%.
- Goods and Services Tax (GST): Singapore introduced Goods and Services Tax (GST) in 1994, currently set at 7%. This mix of consumption and income taxes enhances the stability of government revenue and strengthens Singapore’s fiscal position.
- Withholding Tax: Certain payments, such as interest, royalties, rentals from movable properties, management and technical fees, and director’s fees made to non-residents (individuals or companies), are subject to withholding tax in Singapore.
- Tax Year and Filing Deadlines: For personal taxes, the tax year corresponds to the calendar year (January 1 – December 31), with a deadline for filing personal tax returns on April 15.
- Capital Gains Tax: Singapore does not impose capital gains tax, and consequently, capital losses cannot be claimed as deductions.
- Tax Treaties: Singapore has entered into more than 50 bilateral comprehensive tax treaties, which help Singaporean companies reduce their tax liabilities when conducting international business.
Filing Personal Income Tax Returns Singapore
Individuals in Singapore are required to file their taxes annually with the Inland Revenue Authority of Singapore (IRAS). There are two deadlines for filing individual income taxes:
- E-filing deadline
- Paper filing deadline
Individuals earning less than S$22,000 are exempt from paying taxes in Singapore but are still obligated to file taxes with IRAS.
Filing personal taxes can be done either online or by mail. IRAS provides specific forms for different taxpayer categories and tax residency statuses:
- Form B1: Employed individuals
- Form B: Self-employed individuals
- Form M: Non-resident individuals
After filing, the Singapore government issues a Notice of Assessment (NOA) to individuals between May and September. Taxpayers have 30 days from receiving the NOA to settle their tax liabilities.
If a taxpayer disagrees with the NOA, they can file an Objection of Assessment within 30 days of receiving the tax bill.
It’s important to note that even if there is a dispute, the individual must still pay the full tax amount stated on the NOA within the 30-day window.
Failure to pay taxes within the specified 30-day period may result in a penalty, which is currently set at 5% by IRAS.
FAQs About Personal Income Tax in Singapore
Follow the FAQs section for getting additional information about personal income tax in Singapore.
Who is required to pay income tax in Singapore?
Singaporean residents and foreigners working in Singapore are generally required to pay income tax on their Singaporean-sourced income.
What is the tax year in Singapore?
The tax year in Singapore corresponds to the calendar year, running from January 1 to December 31.
When are personal income taxes due in Singapore?
For e-filing, the deadline is typically April 18, while for paper filing, it’s April 15.
Is there a tax exemption for low-income individuals?
Yes, individuals earning less than S$22,000 are exempt from paying taxes in Singapore, but they must still file tax returns.
How can I file my personal income tax in Singapore?
You can file your personal income tax online or by mail, using the appropriate tax form based on your occupation and tax residency status (e.g., Form B1 for employed individuals).
What is a Notice of Assessment (NOA)?
The NOA is a tax bill issued by the Singapore government, typically between May and September, after you have filed your taxes. It outlines the amount of tax you owe or any refunds due.
Can I dispute my Notice of Assessment (NOA) if I disagree with it?
Yes, you can file an Objection of Assessment within 30 days of receiving your NOA to correct any discrepancies.
What happens if I don’t pay my taxes on time?
Failure to pay taxes within the 30-day period specified on the NOA may result in a penalty, which is currently set at 5% by the Inland Revenue Authority of Singapore (IRAS).
Are capital gains taxed in Singapore?
No, Singapore does not impose capital gains tax. Profits from the sale of assets, stocks, and bonds are generally tax-exempt.
Does Singapore have any tax treaties with other countries?
Yes, Singapore has concluded more than 50 bilateral comprehensive tax treaties, which help reduce tax liabilities for businesses and individuals conducting international transactions.
Finalization
Personal Income Tax in Singapore system is characterized by its territorial basis of taxation, competitive corporate tax rates, and progressive personal tax rates.
Filing taxes in Singapore is an annual requirement for both residents and foreigners earning income within the country.
Key deadlines, exemptions for low-income individuals, and the option to file taxes electronically or by mail are essential aspects of the process.
