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Taxpayer Rights in Singapore

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Taxpayer Rights in Singapore

2021-02-04T10:04:58+08:00March 20, 2020|0 Comments

Every taxpayer in Singapore has been endowed with specific rights which are protected by IRAS. Taxpayers who believe that they have been unjustly overcharged may make a formal objection to IRAS. Another important taxpayers’ right is that no taxpayer is to be charged for an amount of money which is not taxable.

Singapore Taxpayer Rights

Introduction

Everyone who pays taxes in any country is legally entitled to be protected by specific rights. Thus, all taxpayers in Singapore benefit from certain rights from which they benefit. For example, Singapore’s taxpayers have the right to avoid paying taxes on any gains and profits which have specifically been deemed to be exempt from income tax or are directly related to an existing administrative concession. Singapore taxpayers also have the right to file objections to the Inland Revenue Authority of Singapore (IRAS) if they believe that they have been unjustly overcharged on their tax bill. There are also a variety of other rights related to taxation which may be used by a Singapore taxpayer.

However, before any discussion of a Singapore taxpayer’s rights may take place, the Singapore tax system itself must be discussed.

On a related note, we at Paul Hype Page & Co have helped many a Singapore taxpayer understand a great deal more about taxation and their tax obligations, and we can certainly do the same for you. We can even work with you to reduce your tax burden through legitimate and legal means so that you may save a significant amount of money.

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Types of Taxes Which Are Imposed in Singapore

The two primary forms of taxation which are imposed in Singapore are corporate income tax, which is paid by companies, and individual income tax, which is paid by individual taxpayers. Another important tax which exists in Singapore today is the Goods and Services Tax. The government of Singapore imposes a goods and services tax of 7% on imported goods as well as products intended for general consumption. A withholding tax is also imposed on certain payments which are made to anyone who is not a resident of Singapore. Rent payments, business management fees, interest payments, and royalties, have withholding tax imposed upon them. The rate of withholding tax depends on the identity of the recipient and the nature of the payment.

Those who own real estate in Singapore must pay an annual property tax. This tax is imposed progressively and is based on the property’s annual value. Transfers of real estate property and the shares of a company are subject to stamp duty. When certain items are imported into Singapore, an import duty is imposed. These items include motor vehicles, alcoholic beverages, petroleum products, and tobacco products. Exports from Singapore are not subject to any form of taxation.

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How Singapore’s Tax System Benefits Businesses

Due to the low corporate tax rates of Singapore as well as the government-supplied tax schemes which have served to lower the tax burdens of newer companies and startups based in Singapore, it is not difficult and often beneficial for companies to conduct business operations in Singapore. There are also several lucrative tax incentives and grants which are provided to eligible companies. Although Singapore’s corporate tax laws mandate that company profits are to be taxed, such is not the case with regards to dividends which a company’s shareholders receive; neither are most forms of income sourced from abroad nor the profits garnered by companies. Similarly, Singapore does not tax capital gains and most types of foreign-sourced income. The network of Avoidance of Double Taxation Agreements (DTAs) and Unilateral Tax Credits of which Singapore is a part permit Singapore companies to reduce or even eliminate the amount of tax money to be paid on foreign-sourced income.

DTAs and Unilateral Tax Credits are part of international tax planning, which is a task some might find difficult to understand. This is where we at Paul Hype Page & Co can come in. We will assist you with your international tax planning in order to enable you to maximize your tax advantages. We will also help you use DTAs to your financial benefit.

 

How Singapore’s Tax System Benefits Individuals

Singapore attracts people from all over the world by offering low personal tax rates to them. The government of Singapore has also provided its individual taxpayers with many different tax deductions to ease their tax burdens. Individuals may also make use of DTAs if they are eligible to do so. Individual taxpayers in Singapore are not required to pay taxes on income from abroad, inheritance, capital gains, or dividends.

 

Rights of Singapore Taxpayers

Singapore taxpayers are granted certain rights with regard to their status as taxpayers. One such right is the right to avoid paying taxes on any gains and profits which have specifically been deemed to be exempt from income tax or are directly related to an existing administrative concession. In such a situation, the government has ruled that such a sum of money is not taxable. Therefore, should the taxpayer ever be faced with a claim that tax money is owed on such amounts of money, the taxpayer can justly refuse to pay the money claimed to be owed.

Singapore taxpayers also have the right to object to decisions made by IRAS if they believe that they have been overcharged. Objections can be related to one’s income tax bill, notice of assessment, audit assessment, annual value of property, and several other areas overseen by IRAS. If the taxpayer can prove that IRAS is in error, the taxpayer can claim the amount which had been initially and incorrectly overcharged by IRAS.

The Inland Revenue Authority of Singapore (IRAS) is the leading tax authority of Singapore. It operates under the auspices of the Ministry of Finance. It was created in 1960 and was originally known as the Inland Revenue Department. It integrated all of Singapore’s primary revenue collection agencies so as to serve as the focal point of all of the collection and administration of the country. IRAS collects tax money of various types. It also affects the creation of Singapore’s tax policies by providing government figures with important feedback about the impact which each tax policy would have upon the country and its taxpayers. IRAS is also in charge of the monitoring of changes to Singapore’s tax environment so that it can best decide upon the best course of action to be taken.

IRAS also oversees and protects the rights of Singapore’s taxpayers. It does so by doing what it can to ensure that no taxpayer is ever placed in an unjust situation with regard to taxation. IRAS must ensure that every taxpayer of Singapore pays a fair share of taxes and is taxed in a manner which is in accordance with the tax laws of Singapore today.

If someone who was once a Singapore taxpayer ceases to become one, the former taxpayer forfeits all rights once enjoyed while a taxpayer of Singapore. However, should such a person ever return to becoming a Singapore taxpayer, the person’s rights as one will be duly restored.

 

Taxpayer Rights in Singapore FAQs

Are any of Singapore’s Tax laws expected to be changed?2020-06-22T12:07:20+08:00

At the moment, not much has been said regarding possible changes to Singapore’s tax laws. Thus, one can conclude that none of Singapore’s tax laws are currently expected to be changed.

Are Foreign and Local Taxpayers in Singapore subject to different tax laws?2020-06-22T12:06:25+08:00

Foreigners and locals may sometimes be taxed differently in Singapore; however, the primary difference-maker with regard to taxation in the country is tax resident status. A taxpayer who is a resident, whether a local or a foreigner, is to be taxed at different rates and is subject to different tax laws than is a taxpayer who is not a Singapore tax resident. In certain circumstances, it is possible for a local to be a non-resident.

Do Taxpayers of Singapore have similar rights to their counterparts in neighboring countries?2020-06-22T12:05:40+08:00

Around the world, the rights of taxpayers typically do not differ greatly. Such is the case as well when one compares the rights granted by the Singaporean government to the country’s taxpayers to those granted by governments of other countries in the region to the taxpayers of those countries. Thus, taxpayers of Singapore generally have similar rights to those of neighboring countries, although some differences do exist.

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