2015 Singapore Personal Income Tax Guide

Complete overview of personal income taxes in Singapore

Singapore personal income taxation guide, a detailed overview of personal income tax requirements in Singapore. The personal income tax rates in Singapore are among the lowest in the world. The personal income tax liabilities of an individual are determined by a number of factors including tax residency, the amount of chargeable income and then the final rate is arrived at by applying the progressive tax rate.

Basic of Singapore Personal Income Taxes

• Progressive tax rates starting at 0% going up to 20%
• No capital gains tax
• no inheritance tax
• No tax on overseas derived income (with few exceptions)*
• Annual tax filing is due April 15th for the previous year

Personal Income Tax Guide

Singapore personal income tax rates for 2015

Overview of Singapore personal income tax rates

Tax residents of Singapore are taxed based on their total taxable income. The filing of a personal tax return is required if your annual income is more than $22,000 in the previous year. You do not need to pay personal income tax if your annual income is less than $22,000 however you will be required to file if you have been contacted by the Singapore tax authority. Listed below are the progressive personal tax rates in Singapore:

Less than $20,000

• Effective tax rate of 0%
• Payable taxes of $0

More than 20,000 less than $30,000

• 2% tax on the first $10,000 taxable income above $20,000
• Maximum payable taxes of $200

More than 30,000 less than $40,000

• 2% tax on the first $10,000 taxable income above $20,000, plus
• 3.5% tax on the next $10,000 taxable income above $30,000
• Maximum payable taxes of $550

More than 40,000 less than $80,000

• 2% tax on the first $10,000 taxable income above $20,000, plus
• 3.5% tax on the next $10,000 taxable income above $30,000, plus
• 7% tax on the next $40,000 taxable income above $40,000
• Maximum payable taxes of $3,350

More than 80,000 less than $120,000

• 2% tax on the first $10,000 taxable income above $20,000, plus
• 3.5% tax on the next $10,000 taxable income above $30,000, plus
• 7% tax on the next $40,000 taxable income above $40,000, plus
• 11.5% tax on the next $40,000 taxable income above $80,000
• Maximum payable taxes of $7,950

More than 120,000 less than $160,000

• 2% tax on the first $10,000 taxable income above $20,000, plus
• 3.5% tax on the next $10,000 taxable income above $30,000, plus
• 7% tax on the next $40,000 taxable income above $40,000, plus
• 11.5% tax on the next $40,000 taxable income above $80,000, plus
• 15% tax on the next $40,000 taxable income above $120,000
• Maximum payable taxes of $13,950

More than 160,000 less than $200,000

• 2% tax on the first $10,000 taxable income above $20,000, plus
• 3.5% tax on the next $10,000 taxable income above $30,000, plus
• 7% tax on the next $40,000 taxable income above $40,000, plus
• 11.5% tax on the next $40,000 taxable income above $80,000, plus
• 15% tax on the next $40,000 taxable income above $120,000, plus
• 17% tax on the next $40,000 taxable income above $160,000
• Maximum payable taxes of $20,750

More than 200,000 less than $320,000

• 2% tax on the first $10,000 taxable income above $20,000, plus
• 3.5% tax on the next $10,000 taxable income above $30,000, plus
• 7% tax on the next $40,000 taxable income above $40,000, plus
• 11.5% tax on the next $40,000 taxable income above $80,000, plus
• 15% tax on the next $40,000 taxable income above $120,000, plus
• 17% tax on the next $40,000 taxable income above $160,000
• 18% tax on the next $120,000 taxable income above $200,000

More than $320,000

• 2% tax on the first $10,000 taxable income above $20,000, plus
• 3.5% tax on the next $10,000 taxable income above $30,000, plus
• 7% tax on the next $40,000 taxable income above $40,000, plus
• 11.5% tax on the next $40,000 taxable income above $80,000, plus
• 15% tax on the next $40,000 taxable income above $120,000, plus
• 17% tax on the next $40,000 taxable income above $160,000
• 18% tax on the next $120,000 taxable income above $200,000
• 20% tax on taxable income above $320,000
• Minimum payable taxes of $42,350 + 20% flat on income above $ 320,000

Taxation for a Singapore Personal Tax Resident

Determining the taxable income for a Singapore tax resident

Tax residents are required to pay taxes based on their chargeable income as listed in the above tax rate.

What is chargeable personal income? Chargeable income is your personal income which is subject to taxation as follows:

How to determine chargeable income

• Total income
• Minus expenses = Statutory Income
• Minus donations = Assessable Income
• Minus personal reliefs = Chargeable Income

Defining Total Income

• Personal income from trade, business, professional services, or vocation as a sole proprietor, or member of a partnership
• Personal income from profits from employment
• Personal income from dividends, interest derived from investments
• Personal income from rent, premiums, royalties derived from properties
• Excluding qualified offshore personal income sources

Defining Personal Expenses

• Qualified employment related expenses which are incurred personally
• Qualified rent related expenses for personal usage

Defining Personal Donations

• Qualified donations to a recognised charity organisation

Defining Personal Reliefs

• Deductions for qualified dependants such as spouse, children under 20, elderly parents, and handicapped adult children
• Deductions for education in qualified courses
• Deductions for earned income reliefs
• Other special personal reliefs may also apply

Defining Chargeable Income

• Personal chargeable income is the adjusted gains after deductions as listed above

Taxation for a Non-Singapore Tax Resident

Determining the taxable income for a non-Singapore tax resident

Foreigners who are legally reside in Singapore for less than 183 days in the previous year and have not held or possess a permanent residency, work visa or permit or related visa are considered non-residents. You will be taxed as follows:

Short-term Employment in Singapore of less than 60 days

• You are exempt from Singapore personal income tax unless you are:
• A Public Entertainer, or a
• Professional performing services in Singapore, including but not limited to
• Foreign expert, or
• Foreign Speaker, or
• Queens counsel, or
• Consultants, or
• Trainers, or
• Coaches, or
• Teachers and Professors, or
• Director of a company in Singapore and receive a director’s fee

Employment in Singapore of more than 61 days but less than 182

• You are required to pay tax of 15% or the progressive resident’s rate, whichever is higher
• You can claim qualified expense deductions
• You can also claim qualified charitable donation deductions
• You are not eligible for personal reliefs in most cases

Non-resident Director of a Singapore Company

• Director fees are charged a flat rate of 20% for all non-resident directors of a Singapore company

Filing personal income tax returns

How to file your personal income tax return in Singapore

Filing a personal income tax return is an annual obligation for all taxable individuals. Singapore requires that your personal income tax return must be filed on or before April 15th for the previous year’s personal income.

You are not required to pay tax if your yearly personal income is under $22,000. You might still be required to submit your personal income tax returns if you have been contacted by the Singapore tax authority and they have requested that you submit your personal tax form. If you have no income over the previous year, you should still declare no personal income on your tax form and submit to the Singapore tax authorities on or before April 15th. It is mandatory to file your personal income tax return if your annual personal income is greater than $22,000.

You can either file your personal income tax return online, at the Singapore post office, or by mail. The Singapore tax authority (IRAS) will normally send you the paper personal income tax form in February or March allowing you enough time to file your personal income tax return.

Once you have submitted your personal income tax return, you should receive your Notice of Assessment or personal income tax bill typically before September of the same year. The personal income tax bill will show the payable amount of taxes you are liable to pay. If you do not agree with your personal tax assessment, you must inform the Singapore tax authorities within 30 days of the date that you received the personal income tax bill and explain the reasons why you disagree with the assessment.

If you do not have any objections you must pay the entire personal income tax bill within 30 days of receiving your Notice of Assessment. If you do not pay your entire tax on time the remaining amount outstanding after 30 days will incur a fine or penalty.

The appropriate forms differ for different individuals:

• Singapore tax residents are required to submit Form B1
• Self-employed Singapore tax residents are required to submitForm B
• Non-Singapore tax residents are required to submit Form M
• You will be subject to penalties for filing late or not filing.

Employment Benefits

Treatment of employment benefits on personal income taxes

All income from your employment is considered taxable, unless they are specifically qualified as exempt from personal income tax or are part of an administrative coverage. The income includes all benefits, both as money earnings or otherwise, gained by way of your employment.

Some examples of taxable benefits:

• Housing allowance
• Car or car service
• Medical or dental reimbursements, including those for dependants
• Overtime pay
• Excessive per diem allowances *(based on country visited)
• Transportation allowance or reimbursements
• Meal allowances
• Other non-cash benefits are taxed at an adjusted rate as payment-in-kind and require consultation with an accountant

Offshore Personal Income

Treatment of personal income from sources overseas

In most cases income from overseas is not taxable even if the income is repatriated into a Singapore bank account. You are not required to declare your overseas income on your personal tax returns.

Examples of When Offshore Personal Income is Taxable:

• Income is derived from goods or services via a sole proprietorship or partnership
• Your overseas employment is part of your Singapore based employment
• You are employed by the Singapore government and preform your duties overseas

Non-taxed Items

Capital Gains, Inheritance

No Capital Gains Tax – Investment derived income such as those from real assets including property, financial assets are not directly taxed.

No Inheritance Tax / Estate duty – there is no tax imposed on money or property received as part of an inheritance.