外国来源收入：在新加坡免税吗？

Foreign-sourced income refers to earnings derived from sources outside of Singapore. Typically, Singapore taxes such income upon its entry or receipt within its borders, resulting in double taxation as the income has already been taxed in the foreign country.

Foreign sourced may be used to invest in assets from other countries but the company is not permitted to use such foreign expenses or investments to claim tax deductions in Singapore local sourced income.

Tax Breaks on Foreign-Sourced Income in Singapore

3 methods that company can enjoy tax breaks on foreign income as follows:

Tax Exempted Foreign Sourced Income in Singapore

Certain forms of foreign-sourced income are exempt from Singapore taxation.

The three categories of specified foreign income that exempted if they meet the criteria are:

These exemptions have been in place since June 1, 2003. The scope of tax exemptions related to foreign-sourced income in Singapore has been increasing over recent years. This is because the government has been trying to make it easier for companies to use money earned from investments and operations in other countries so that the companies can better fund their corporate financial needs in Singapore.

Tax Exemption Conditions in Singapore For Foreign-Sourced Income

According to Section 13(9) of the Income Tax Act, tax exemptions are only to be granted for foreign-sourced income if all of three conditions are fulfilled. The 3 conditions are:

Furthermore, once all three conditions are satisfied, the individual or company may begin enjoying tax exemptions granted.

Receiving a Tax Exemption on Foreign-Sourced Income in Singapore

To receive a tax exemption for foreign-sourced income in Singapore, certain information must be supplied in the income tax return. These include:

Those who are filing Form C-S instead of Form C ought to include the above information in the company’s tax computation while also retaining any supporting documents and information.

Foreign Tax Credits: How to Claim Tax Breaks on Foreign-Sourced Income in Singapore?

Under normal circumstances, foreign income earned by a company based in Singapore is subject to taxation twice. The jurisdiction where the income originates may tax it. Additionally, Singapore may tax the income when it is remitted here. However, Singapore companies can avoid double taxation using foreign tax credits or exemptions.

Income from a foreign permanent establishment is usually taxed in the foreign country. Moreover, a foreign tax credit will only be granted if this income is also subject to Singapore tax.

Conditions to claim foreign tax credit are listed below.

A foreign tax credit is divided into two categories namely:

Double Tax Relief

Double tax relief is provided for under a Double Taxation Agreement (DTA).

Singapore residents can claim foreign tax credits for foreign taxes paid on foreign-sourced income. Additionally, the credit is capped at the lower of the foreign tax paid and the Singapore tax owed. Moreover, if a Double Taxation Agreement (DTA) exists, the credit is subject to its provisions.

Unilateral Tax Credits

Unilateral tax credits are available for Singapore tax residents who receive foreign-sourced income from countries without a DTA. Additionally, the country of origin generally taxes dividends and interest, considered passive income, in the year they are received. Singapore also taxes this income when it is remitted here. However, Singapore provides a foreign tax credit to offset the taxes paid in the foreign country.

To suffer double taxation is uncalled for, it advisable to seek for tax specialist to understand your income source to assess your eligibility for tax credit. Moreover, to gain more assurance you can even get an advance tax judgment from IRAS.