|Income from Property or Investments
||Other Sources of Income
- Gains from Sale of Property, Shares & Financial Instruments
- Rent from Property
- Annuity (recurring annual payments)
- Charge (alimony and maintenance payments)
- Estate / Trust Income
- National Service Housing, Medical and Education Award
- Winnings (Toto, 4D…)
- Withdrawal from Supplementary Retirement Scheme (SRS)
Singapore Income Tax Treatment of Income Earned Overseas
Generally, overseas income received in Singapore is not taxable. This includes overseas income brought into Singapore and paid into a Singapore bank account.
However, there are certain circumstances under which overseas income is taxable
For instance, foreign income received in Singapore through partnerships in Singapore while working overseas. Your overseas income is incidental to your Singapore employment hence it is deemed to be taxable.
Singapore Income Tax Treatment of Employer Benefits
All local and foreign gains and profits delivered to an individual because of business are taxable unless they are especially exempt from income tax or are covered by an existing administrative concession.
The gains or profits include all benefits, whether in money or otherwise, paid or granted to you in respect of employment.
Examples of taxable benefits received from your employer include:
Fixed monthly meal allowances
Fixed monthly allowances for transportation if mileage on private car are reimbursed
Car furnished by an employer
Accommodation and housing allowance
Refunds of medical and dental treatments for dependents other than the income earner, spouse and children
Per Diem allowances (such as allowances provided on overseas trips for business purposes), as long as the amount is beyond the acceptable rates.
However, certain non-cash benefits (i.e. accommodations like housing) are taxed using special formulas, known as concessionary basis, leading to lower taxation on these benefits-in-kind.
Hence, a compensation package (salary+ benefits-in-kind)has been structured exclusively for executives to help them reduce their individual tax liability in Singapore.
Here are some examples for the benefits-in-kind received as part of the employment:
Furniture & Furnishings provided
Food & Clothing, Hotel Accommodation
Home Leave Passage
Motor Car, Driver
Income Tax paid by Employer
Insurance Premium paid by Employer if employee is stated beneficiary in the Policy
Subscription, Entrance Fees, Memberships.
It is mandatory and required by the Law to file Singapore income taxes with IRAS.
The completed forms of individual income taxes must be filed by latest the 15th of April. For information related to filing of taxes, we at Paul Hype Page can assist you with them, given our proven track record. Feel free to reach out to us.
Assessment of Taxes and Who has to pay taxes
Individuals Earning less than $22,000 (Annual Income)
|Individuals Earning More than $22,000 (Annual Income)
You are not required to pay taxes
You will be required to pay taxes
0% Income tax
|Progressive rates, capped at 22% depending on how high is your Annual Income*
Both are required to file taxes with IRAS
*You may estimate your gross tax rate based on a table from IRAS
Submission of Personal Taxes
You can file your personal taxes online.
Alternatively, you may choose to file your personal taxes via mail. The various forms and it’s different purposes can be seen below.
||Who is it for
||Self Employed, Sole Proprietors
After filing your personal income tax returns, you will receive your Notice of Assessment (NOA) or tax bill by September. The tax bill will indicate the amount of tax you have to pay.
If you disagree with your tax amount, you need to inform the tax department within 30 days from the date of your tax bill and state your reasons for objection.
You need to pay the full amount of tax within 30 days of receiving your Notice of Assessment. This is regardless of whether you have informed the tax authority about your objection. If your tax remains outstanding after 30 days, a penalty will be imposed.
1. Even if you do not have any income in previous years, you will still need to declare zero income in your tax form and file your personal tax.
2. Taxes are assessed by Annual Year, from 1 January to 31 December of the previous year.
Which Period is your Income being Taxed
In Singapore, income tax in the year of assessment (YA) is calculated based on the income in the previous financial or calendar year.
Year of Assessment (YA): The YA is the year in which income tax is calculated and charged. Each YA begins on 1 January and ends on 31 December.
Basis Period: The basis period is the calendar year preceding that YA.
Eg. Your personal tax is being calculated during the calendar Year of 2010 for income earned from Basis period between 1 January 2009 to 31 December 2009.
Companies are allowed to adopt a different financial year other than a calendar year. A different basis period applies to businesses whose financial year end is not 31 December.
Eg. For a company with a June financial year end, the basis period for YA2010 is from 1 July 2008 to 30 June 2009. In this case, the income earned in this period is subject to tax in the year 2010 (YA2010).
How Tax Planning May Reduce Your Income Tax Burden?
In Singapore, there are five ways by which a taxpayer may save money on taxes to be paid.
1. If the taxpayer is a tax resident, the taxpayer is entitled to certain tax reliefs and deductions. Among the tax reliefs that can be claimed by residents include
Deductions may also be claimed if they are related to employment expenses, business expenses, certain types of donations, rental expenses, research and development (R&D) expenditure, or various other categories.
2. If the taxpayer is not a Singapore tax resident, Avoidance of Double Taxation Agreements (DTAs) may be used by the taxpayer to avoid being taxed in both the taxpayer’s country of residence and Singapore.
A DTA specifies all taxing rights between Singapore and the other country involved regarding income generated from economic activities between the two countries. Only tax residents of Singapore or the partner country may benefit from the effects of the DTA.
3. By using the Not Ordinarily Resident (NOR) scheme, a taxpayer could benefit from either Tax Exemption of Employer’s contributions to Overseas Pension Fund, Time Apportionment of Singapore employment income, or both.
A taxpayer qualifies for the NOR scheme if the taxpayer had not been a Singapore tax resident for the entirety of the three-year period before the YA in which the taxpayer applies for the scheme. The taxpayer must also be a tax resident during the current YA in order to be eligible. A taxpayer with NOR status will have it for five years.
4. A taxpayer may claim any expenses incurred against the taxpayer’s employment income and benefit from tax deductions for any approved charitable donations.
Tax-deductible donations include donations of cash, shares, land, buildings, or artefacts to approved bodies or organizations. The value of the tax deduction that can be claimed is 250% of the value of the donation made.
If you are a foreigner thinking of setting up a business or as an individual who would like to have a Singapore tax residency for your company or personal tax planning, reach out to us today.
With current tax regime implemented by OECD where there is common reporting standards (CRS) among all banks and Automatic exchange of information among tax authorities, Singapore offers a legitimate mean for international tax planning.