Your Guide to Filing Taxes in Singapore
Personal income tax in Singapore is based on a progressive structure. Find out what which income types are taxable and how the income tax applies to you as a resident vs non resident. Personal income tax obligation price in Singapore is one of the lowest on the planet. In order to identify the Singapore income tax liability of a specific, you require to very first figure out the tax residency as well as amount of chargeable income and afterwards apply the modern resident tax obligation price to it. Let this guide by Tropika Club help you file your income tax in Singapore.
Table of Contents
Introduction to Personal Income Tax Rate
Personal income tax rate in Singapore is one of the lowest in the world, if not the lowest. In order to help you to determine the Singapore income tax liability of an individual, you need to first determine the tax residency and amount of chargeable income based on what you earn, and then apply the progressive resident tax rate to it. Key points of Singapore income tax for individuals include the following:
- Singapore typically follows a progressive resident tax rate starting at 0% and ending at 22% above S$320,000.
- There is no capital gain or inheritance tax in Singapore.
- Individuals are taxed only on the income earned in Singapore. The income earned by individuals while working overseas is not subject to taxation barring a few exceptions which you will need to take note of .
- Tax rules differ based on the tax residency of the individual (citizen, permanent resident, etc.).
- Tax filing due date for individuals in Singapore is April 15 of each year. Income tax is assessed based on a preceding year basis.
Current Rates for Years of Assessment 2022 to 2024
Resident individuals are entitled to certain personal allowances from personal income tax and are subject to graduated or progressive tax rates ranging from 0% to 22% (This is adjusted to 24% from year of assessment 2024). Non-resident individuals are not entitled to any personal allowances and are subject to personal income tax at a flat rate of 22% (24% from year of assessment 2024). As a concession, employment income of non-residents is taxed at the higher of a flat rate of 15% or the graduated resident rates with personal allowances. This concession does not apply to non-resident directors.
A resident individual’s taxable income (after setoff of personal allowances) is subject to income tax at progressive rates. Current rates for the years of assessment 2022 to 2024 (income years 2021 to 2023) are shown below. Please always refer to the IRAS website for the most updated information.
Tax for Non-Residents
Non-resident individuals are taxed at a flat rate of 22% (24% from year of assessment 2024), except that Singapore employment income is taxed at a flat rate of 15% or at resident rates with personal reliefs, whichever yields a higher tax. A non-resident director’s remuneration or income does not qualify for the reduced rate, and withholding tax (WHT) at 22% (24% from year of assessment 2024) must be deducted from remuneration paid to a non-resident director.
Tax Treatment of Income Earned Overseas
Generally, overseas income received in Singapore on or after 1 Jan 2004 is not taxable. This includes overseas income paid into a Singapore bank account. You do not need to declare overseas income that is not taxable.
There are certain circumstances, however, in which overseas income is taxable:
- Your overseas income is received in Singapore through partnerships in Singapore.
- Your overseas employment is incidental to your Singapore employment. That is, as part of your work here, you need to travel overseas. (e.g. company assignment)
- You are employed outside of Singapore on behalf of the Singapore Government.
You need to declare the qualified taxable overseas personal income under ’employment income’ and ‘other income’ (whichever applicable) in your tax form during your income tax submission .
Income Tax Payable On Company Benefits
According to the Income Tax Act, there are certain types of payments that are taxable and certain types of payments that may not be taxable, and it is good to differentiate between both. Employers (and not the employees) have the responsibility to make the distinctions between which types of payments are taxable and non-taxable. To achieve this, it is compulsory for employers not on the AIS to provide a hardcopy of form IR8A and Appendix 8A and/or 8B or Form IR8S (where applicable) by 1 March of each year to IRAS.
For employees on the AIS, they might not know which types of payments, especially when they are company benefits, are taxable or not, since employers submit their employment income returns. For employees not on the AIS, they may be surprised to find that certain kinds of company benefits are actually taxable.
Examples of taxable benefits received from your employer:
- Car provided by employer
- Reimbursements of medical and dental treatments for dependants other than yourself, your spouse and children
- Overtime payments
- Per diem allowances (daily allowance given to employees on overseas trips, out of Singapore, for business purposes), provided the amount is in excess of acceptable rates
- Fixed monthly allowance for transport or if mileage on private cars are reimbursed
- Fixed monthly meal allowance
Note however that some of the non-cash benefits (e.g. accommodations) are taxed using special formulas resulting into a lower taxation on these benefits-in-kind. Thus, a properly structured compensation package (i.e. salary plus benefits in kind) for the executives can help reduce their individual tax liability in Singapore. Further details on this are outside the scope of this guide.
How to Start Filing Your Income Tax in Singapore
Personal Income Tax can be filed starting from the end of the first quarter of each year – you can do it electronically via the IRAS website from 1 March to 18 April every year. The assessment is for income earned in the preceding year – for example, in 2022, you would be filing for taxes for the income you received or derived in 2021. If you prefer paper filing, you will have to submit your completed tax form to the IRAS headquarters by 15 April.
STEP 1: Prepare the necessary resources.
Make sure you have these ready:
- SingPass / IRAS Unique Account (IUA)
- Form IR8A (if your employer is not participating in the Auto-Inclusion Scheme)
- Particulars of your dependents (e.g. child, parent) for new relief claims
- Details of rental income from your property and other income, if any
- Business Registration Number / Partnership Tax Reference Number (for self-employed and partners only)
STEP 2: Log in to myTax Portal
- Log in to myTax Portal with your SingPass / IRAS Unique Account (IUA).
- Click on “Individuals” > “File Income Tax Return” and follow the instructions.
STEP 3: Key In or Verify your details
Key in details such as your income, deductions and reliefs. If your organisation participates in the Auto-Inclusion Scheme, these details will be pre-filled. You will simply need to verify the information.
STEP 4: Update existing tax reliefs
If you qualify for additional or new tax reliefs (e.g. relief for newborn child), please include your claims. If you previously claimed any reliefs that you no longer qualify for (e.g. course fees), you will need to remove them.
STEP 5: Declare other sources of income, if any.
If necessary, declare your other sources of income (e.g. rental income).
STEP 6: Receive acknowledgement receipt
You will see an acknowledgement page after successfully e-filing. Save or print a copy if you can.
You can find a more detailed process here.
For those who are unable to file taxes online, IRAS will send them the relevant paper tax return between February to March.
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