MCAS and MATS as part of the MC Group of Companies will assist our Client’s timely discharge their annual legal, accounting and tax obligations.
Singapore Tax System – Key Facts
|1||Singapore follows a territorial basis of taxation.
Companies and individuals are taxed mainly on Singapore sourced income.
Foreign sourced income (ie. branch profits, dividends) will be taxed when it is remitted or deemed remitted into Singapore.
|2||Singapore corporate tax rate is capped at 17%.|
|3||Singapore personal tax rates start at 0% and are capped at 22% (above S$320,000) for residents and a flat rate of 15% to 22% for non-residents.|
|4||The current GST rate is 7%|
|5||Interest, royalties, rentals from movable properties, management and technical fees, and director’s fees paid to non-residents (individuals or companies) are subject to withholding tax in Singapore.|
|6||For personal taxes, the tax year is the normal calendar year i.e. January 1 – December 31. Deadline for filing personal tax return is April 15.|
|7||For corporate taxes, a company is free to decide on its financial year. Deadline for filing corporate tax return is November 30. Taxes are paid on a preceding year basis.|
|8||Singapore has no capital gains tax. Capital loss expenses are correspondingly not allowed as deductions.|
|9||Singapore has concluded more than 50 bilateral comprehensive tax treaties to help Singapore companies minimize their tax burden.|
Types of Taxes in Singapore
|1||Income tax||Chargeable on income of Companies and Individuals|
|2||Property tax||Chargeable on owners of properties based on the expected rental value|
|3||Good & Services||The tax is paid when money is spent on goods or services, including imports. This kind of indirect tax is also known as Value Added Tax (VAT) in many other countries.|
|4||Customs & Excise||Singapore is a free port and has relatively few excise and import duties.
Certain products such as motor vehicles, tobacco, liquor and petroleum products are subject to import duties.
|5||Stamp Duty||Imposed on commercial and legal documents relating to stock & shares and immovable property|
|6||Foreign Worker Levy||A pricing mechanism to regulate the number of foreign workers in Singapore.|
|7||Airport Passenger Tax||A Passenger Service Charge of SGD 21 should be incorporated in the air ticket (including tickets issued outside of Singapore).
For Passengers who are in transit for less than 24 hours may leave the airport without having to pay the service charge upon departure from Singapore.
|8||Betting Tax||Duties paid on private lottery, betting & sweep-stake.|
|9||Motor Vehicle Tax||These taxes are imposed to curb car ownership and road congestion|
Singapore Tax Authority
The Inland Revenue Authority of Singapore (IRAS), was formed in 1960 and was formerly known as the Inland Revenue Department.
IRAS is responsible for collecting income tax, property tax, goods & services tax, betting taxes and stamp duties.
IRAS plays a role in tax policy formulation by providing policy inputs, as well as the technical and administrative implications of each policy as well as actively monitoring and developing the tax environment in Singapore. It aims to foster a competitive tax environment that encourages enterprise and growth.
The Income Tax Act of Singapore is the governing statute regarding corporate and individual taxation matters.
Current Tax Rates in Singapore
Corporate Tax Rates
|Tax rate on corporate profits for up to 300,000 SGD||Effective tax rate at 8.5%|
|Tax rate on corporate profits above 300,000 SGD||17%|
|Tax rate on capital gains accrued by the company||0%|
|Tax rate on dividend distribution to shareholders||0%|
|Tax rate on foreign-sourced income not brought into Singapore||0%|
|Tax rate on foreign-sourced income brought into Singapore||0 – 17% subject to conditions|
Personal Tax Rates
|Tax rate on first 20,000||0%|
|Tax rate on next 10,000||2%|
|Tax rate on next 10,000||3.5%|
|Tax rate on next 40,000||7%|
|Tax rate on next 40,000||11.5%|
|Tax rate on next 40,000||15%|
|Tax rate on next 40,000||18%|
|Tax rate on next 40,000||19%|
|Tax rate on next 40,000||19.5%|
|Tax rate on next 40,000||20%|
|Tax rate on above 320,000||22%|
|Tax rate on capital gains||0%|
|Tax rate on dividends received from Singapore company||0%|