Singapore’s tax system contains many different taxes. Apart from the most important taxes such as personal income tax, corporate tax, and goods and services tax, several other minor taxes are levied in certain situations. These taxes cover areas such as property, insurance, water, and even gambling.

Other Singapore Taxes

When most people think of taxes, their minds will usually move towards personal income tax based on annual income, corporate income tax, or goods and services tax (GST) if they live in a country that imposes it. Each of these have important roles to play within the Singapore tax system. Notably, Singapore’s personal income tax rates and corporate tax rates are among the world’s lowest. There are also several other taxes which must be paid by certain people living in Singapore, which will be detailed below.

 

Withholding Tax

Singapore’s tax laws require payers who make certain payments to non-resident individuals or companies to withhold a percentage of that payment and pay the amount withheld to the Inland Revenue Authority of Singapore (IRAS). Those who have tax residency in Singapore, i.e., those who have lived or worked in Singapore for at least 183 days of a year of assessment, may not claim withholding tax. Among the payments subject to withholding tax include management fees, director’s remuneration, rent for the use of movable property, specified distributions by unit trusts, interest, and royalties, just to name a few.

The lowest possible withholding tax rate is 0%, while the highest is 22%. However, management fees and technical assistance and service fees are not taxed in terms of a percentage; they are taxed at the prevailing corporate tax rate, which is currently 17%.

If a withholding tax is imposed at the prevailing corporate tax rate on the gross payment, the tax paid will not be regarded as the final tax. If the non-resident company intends to make claim for the expenses incurred in deriving the income, it may forward the certified accounts and tax computation to the IRAS for analysis and examination. Once the IRAS has determined the net income and tax, it will refund any withheld tax money above that of the tax on the net income.

 

Stamp Duty

Stamp duty is a tax imposed on any document which is connected to the purchase or lease of a property or the sale of shares. If the document was signed in Singapore, stamp duty must be paid within 14 days of the date of the document. However, this figure rises to 30 days after the date of the document’s receipt in Singapore if the document was signed abroad. Stamp duty in Singapore is governed by the Stamp Duties Act.

Stamp duty is divided into Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD). BSD is tax paid on the acceptance of documents known as Option to Purchase (OTP) or Sale & Purchase Agreements (S&P). BSD is to be paid by the buyer and is payable on the higher of either the actual price and market price. Its value ranges between 1% and 4% of total stamp duty. ABSD is to be paid by those who buy or acquire any residential properties or land. It is charged on top of BSD. ABSD rates vary based on the person who buys the property and the number of properties purchased; the lowest ABSD rate is 0%, imposed on Singaporean citizens who have purchased their first property, while the highest is a remittable 25% with a non-remittable 5% added. Developers are taxed at this high rate.

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Customs and Excise Duties

Singapore has among the fewest different customs and excise duties in the world. Nevertheless, just as it is with any other country, Singapore does impose such duties on all dutiable goods manufactured in or imported into the country. In Singapore, alcoholic beverages, tobacco products, petroleum products, and motor vehicles are dutiable.

Alcoholic beverages may have duties imposed upon them based either on alcohol content or dutiable content. Tobacco products have duties imposed upon them based on their weight with the exception of cigarettes. Duties on cigarettes are based on a combination of both weight and quantity. Duties on motor vehicles are based on customs value, while those on petroleum products are based on volume.

 

Property Tax

Those who own immovable property in Singapore are required to pay a property tax. The rate of this property tax is based on the annual value of the property if the property is either an owner-occupied or non-owner occupied residential property. For owner-occupied residential properties, this property tax ranges from 0% on properties valued below S$8,000 to 16% on properties valued above S$130,000. For non owner-occupied residential properties, the property tax ranges from 10% on properties valued below S$30,000 to 16% on properties valued above S$90,000. All non-residential properties are taxed at 10% of their annual value. 

 

Water Conservation Tax

In 1991, the Singaporean government introduced the Water Conservation Tax. This tax was introduced to promote conservation of water across the country and is imposed as a percentage of the relevant water tariff rate. Domestic users are required to pay a 30% tax on the domestic water tariff rate applicable to all water usage up to 40 cubic meters per month. This is equivalent to S$1.17 per cubic meter. For domestic usage beyond the first 40 cubic meters per month, the tax rate is 45%, which equates to S$1.40 per cubic meter. Non-domestic users must pay a 30% tax on the non-domestic water tariff rate; this tax is S$1.17 per cubic meter for all usage. Shipping users must pay this tax at a higher rate than either domestic or non-domestic users. Shipping users are to pay a 30% tax on the shipping water tariff rate, which is S$1.92 per cubic meter for all usage.

 

Tax on Insurance Policies

Different insurance policies are granted different income tax treatment in Singapore. Certain employees’ insurance policies which have their premiums paid for by the employer are taxable, while others are not. Taxable insurance policies include personal insurance policies for which the employee is the policyholder and group insurance policies covering life, personal accident, or critical illness where according to the employee’s contract, the employee is entitled to the payout. Insurance policies which are not taxable and therefore essentially receive a tax exemption include the following: group medical insurance policies which contain benefits available to all staff members; group insurance policies covering life, personal accident, or critical illness where the employee is not entitled to the payout according to the employee’s contract; travel insurance policies covering the period of business travel; and work injury compensation.

 

Casino Tax

Singapore’s casino tax was implemented in 2010. This tax is levied on a casino’s gross gaming revenue (GGR). GGR is calculated by subtracting the GST chargeable against the casino operator with regard to all gaming supplies (defined as betting and gaming services offered or conducted by a casino operator) made by the casino operator from the total amount of net wins received on all games conducted within the casino premises of the casino operator. The definition of net wins depends on whether the casino operator is a party to the wager. If the casino operator is a party to the wager, net wins is defined as the difference between the amount of money in bets received by the casino operator on the game and the amount paid out by the casino operator as winnings on the game. Casino games classified under this category include table games and gaming machines where players play against the casino operator. If the casino operator is not a party to the wager, net wins is defined as the amount determined by the total value of all consideration in money or money’s worth received by the casino operator for conducting the game. Some casino games that are part of this category are tournaments and contests where the players compete among themselves for a prize.

There are two different casino tax rates in place. Premium players, who are those who open a deposit account of at least S$100,000 with the casino operator, are subject to a 5% tax rate. All other players are to be taxed at a 15% rate.

Road Tax

Road tax in Singapore is imposed on owners of motor vehicles. This tax is to be paid annually. If the vehicle is fueled by petroleum, the tax rate is based on engine capacity. If the vehicle is fueled by diesel, although the tax rate is also based on engine capacity, the formula used to calculate the tax rate is different. Road tax on diesel vehicles is also affected by whether the vehicle is a Euro IV and below or a Euro V and above. There is also a road tax surcharge placed on vehicles which are 10 years old or older. This surcharge ranges from 10% on 10-year-old vehicles to 50% on vehicles 14 years old or older.