Singapore tax system: audit, reporting and optimization of taxation of Singapore companies and individuals: VAT, income tax and capital gains

Basic taxes (briefly)

Personal tax 2-22%
Corporate tax (in detail) The income tax rate is 17%. Partial tax exemptions up to certain small amounts and other benefits apply
Capital gains tax. Details
VAT. Details Goods and Services Tax - GST is an indirect tax similar to VAT. The GST rate is 7%
Other taxes Social contributions, Property tax
Government fee S$20
Stamp duty 0,2-4%

International tax agreement

Albania, Armenia, Australia, Austria, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Bermuda, Brazil, Brunei, Bulgaria, Cambodia, Canada, Chile, China, Cyprus, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Ethiopia, Fiji Islands, Finland, France, Georgia, Germany, Ghana, Greece, Guernsey, Hong Kong, Hungary, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Japan, Jersey, Jordan, Kazakhstan, Korea, Republic of, Kuwait, Lao People’s Democratic Republic, Latvia, Libya, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Mauritius, Mexico, Mongolia, Morocco, Myanmar, Netherlands, New Zealand, Nigeria, Norway, Oman, Pakistan, Panama, Papua New Guinea, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, Rwanda, San Marino, Saudi Arabia, Serbia, Seychelles, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand, Tunisia, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Uzbekistan, Vietnam
   
USA


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Taxation of individuals

Income tax is levied on income arising in Singapore whether or not the individual is resident in Singapore. Income from foreign sources is taxable in Singapore only if the Singapore resident receives such income through a partnership in Singapore.

Singapore residents pay tax on income on a progressive scale and various tax deductions are allowed. The tax rates are:

  • for income up to SGD 20,000 - 0%;
  • for income between SGD 20,000 and 30,000 - 2%;
  • for income between SGD 30,000 and 40,000 - 3.5%;
  • for income between SGD 30,000 and 40,000 - 3.5%;
  • for income between SGD 40,000 and 80,000 - 7%;
  • for income between SGD 80,000 and 120,000 - 11.5%;
  • for income between SGD 120,000 and 160,000 - 15%;
  • for income between 160,000 and 200,000 SGD - 18%;
  • for income between 200,000 and 240,000 SGD - 19%;
  • for income between 240,000 and 280,000 SGD - 19.5%;
  • for income between 280,000 and 320,000 SGD - 20%;
  • for income between 320,000 and 500,000 SGD - 22%;
  • for income between 500,000 and 1,000,000 SGD - 23%;
  • for income above 1,000,000 SGD - 24%.

Non-residents are taxed at a rate of 22%, except for employment remuneration which is taxed at 15% or on a progressive scale established for residents, with tax deductions applied if the latter amount is higher.

Capital gains from the disposal of assets (Capital Gains) are not taxable.

Dividends are not taxable except for dividends from foreign sources if they are received by a resident through a partnership in Singapore.

Interest income from Singapore banks and financial companies with the necessary licences is not taxable.

Income from foreign sources is not taxable unless it is received by a resident through a partnership in Singapore.

Income tax

Companies, both resident and non-resident, with operations in Singapore are subject to income tax on income generated in Singapore and on foreign-source income when generated in Singapore (or when deemed to be generated in Singapore).

The income tax rate is 17%. Partial tax exemption up to certain small amounts and other benefits are available.

Tax is not levied on capital gains from the disposal of assets (capital gains). Such gains may be reclassified as trading gains if the holding period is short, the frequency of transactions is high, etc. Gains from the sale of shares are tax-free until the end of 2027 if the company held at least 20% of the ordinary shares for at least 24 months. The exemption does not apply to shares in real estate companies and profits of insurance companies.

Dividends received from Singapore companies are not taxable.

Dividends from foreign companies may be exempt from tax under certain conditions, in particular, if dividends are distributed from profits on which tax was paid, the standard tax rate in the jurisdiction of the subsidiary is not less than 15%.

CFC rules

There are no CFC rules in Singapore.

Withholding tax on income

No withholding tax is withheld at source on dividend payments. Tax is withheld at a rate of 15% on interest payments and 10% on royalties.

Tax rates can be reduced in accordance with double taxation treaties (DTAs).

Goods and services tax (GST)

GST is an indirect tax similar to VAT. The rate of GST is 7%.

Social security contributions

Mandatory pension contributions are payable on citizens and permanent residents of Singapore. As a general rule, employers pay a contribution rate of 17%, employees pay 20% on employment-related monthly remuneration up to SGD 6,000 (Singapore dollar) as well as additional employment-related remuneration (e.g. annual bonuses) up to certain limits. The rates are lower for those aged 55 years and above and those with monthly remuneration up to SGD 750.

Employers must pay a monthly skill development levy at a rate of 0.2% on an employee's remuneration up to SGD 4,500 but not less than SGD 2.

Property tax

Tax is payable annually on land and buildings. Tax rates range from 0% to 16% for owner-occupied dwellings and from 10% to 20% for other dwellings. The rates depend on the value of the property. Commercial (non-residential) properties are taxed at 10%.

Stamp duty

Stamp duty is payable on paper and electronic documents relating to real estate, leases and shares.

When purchasing real estate, the buyer pays stamp duty at the rate of 4%. In addition, stamp duty is levied on the seller at a rate of up to 30% and additional stamp duty on the buyer at a rate of up to 15%, the rates depend on the type of property, resident/non-resident status, length of ownership, number of properties in ownership. The base is the transaction price or market value if higher. An additional asset transfer fee is charged, under certain conditions, also for transactions involving shares in companies owning residential real estate in Singapore.

For lease transactions, stamp duty is levied generally at a rate of 0.4%, the base being determined differently depending on the length of the lease.

For instruments executing share transactions, stamp duty is levied at a rate of 0.2% of the purchase price or market value of the shares if higher.

Double taxation treaties

Singapore has signed tax treaties:

98 DTCs: Albania, Armenia, Australia, Austria, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Bermuda, Brazil, Brunei, Bulgaria, Cambodia, Canada, Chile, China, Cyprus, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Ethiopia, Fiji Islands, Finland, France, Georgia, Germany, Ghana, Greece, Guernsey, Hong Kong, Hungary, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Japan, Jersey, Jordan, Kazakhstan, Korea, Republic of, Kuwait, Lao People’s Democratic Republic, Latvia, Libya, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Mauritius, Mexico, Mongolia, Morocco, Myanmar, Netherlands, New Zealand, Nigeria, Norway, Oman, Pakistan, Panama, Papua New Guinea, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, Rwanda, San Marino, Saudi Arabia, Serbia, Seychelles, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand, Tunisia, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States, Uruguay, Uzbekistan, Vietnam.

1 TIEA: United States.

Exchange controls

In general, there are no restrictions under currency controls in Singapore.

    Taxes of Singapore

    Min. rate for corporate tax 17%
    Capital gains tax No
    VAT 7%
    Withholding tax 0%/10%/15%
    Exchange control No
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