Singapore personal income tax: A detailed guide & Practical examples

Steal this knowledge, and learn how to navigate Singapore's personal income tax with our detailed guide.

We simplify the complexities of personal income tax for Singapore residents, foreign entrepreneurs, and business owners, offering practical examples to make it easier to understand. 

Whether you are new to managing taxes or seeking clarity, this guide is essential for mastering Singapore's tax landscape.

In this must-read guide, we help you 

• Understand Singapore's personal tax system, determine your income tax rates;
• Find out how much you have to pay tax and if you can apply any rebates and deductions;
• Know how to file tax returns and effectively navigate the regulations to prevent mistakes and ensure compliance.

1. Key highlights of personal income tax in Singapore

Key features of Singapore's income tax for Singapore residents and non-residents include the following

1.1. Key Features of Singapore's Personal Income Tax

• Progressive tax rates: Singapore imposes a progressive resident tax rate structure, ranging from 0% to a maximum of 24% for incomes from 1,000,000 SGD.
• Exemptions: Singapore does not enforce inheritance tax or capital gain tax, making it an attractive destination for individuals.
• Residency classification: Tax liability is based on an individual's residency status, categorized as a tax resident or non tax-resident.
• Taxable income: Taxes apply only to income earned within Singapore, with specific exceptions.
• Filing deadline: Individuals must file their tax returns by April 15 each year, based on the previous year's income.

1.2. How to determine the tax residency status of an individual?

You can determine your individual tax income based on your tax residency status. Tax residential status can be categorized into 2 groups as follows:

2. How you can determine your own Singapore personal tax rate?

2.1. How to determine your personal chargeable income?

You need to figure out your chargeable income to see how much tax you have to pay. The chargeable income is calculated as follows.

2.2. Singapore personal tax rate for tax resident

Personal income tax for tax residents in Singapore is active under a progressive tax rate structure, varying from 0% to 24%. Anyone earning an annual income of 20,000 SGD or above is required to file personal tax returns.

Individuals making less than 20,000 SGD might not be obligated to pay taxes but could still be required to submit a tax return if directed by the Singapore tax authorities.

There are age-related tax reliefs that actively reduce the amount of personal income tax payable in Singapore.

The table below shows how the tax rate is applicable for each income bracket.

For example, if the taxable personal income is 80,000 SGD, the personal income tax payable in Singapore will be calculated as follows:

• The first 20,000 SGD is not taxed (0%).
• The next 10,000 SGD is taxed at 2%.
• The subsequent 10,000 SGD is taxed at 3.5%.
• The remaining 40,000 SGD is taxed at 7%.

Summing these up, the total tax payable will be 3,350 SGD.

(20,000 x 0%) + (10,000 x 2%) + (10,000 x 3,5%)+ (40,000*7%) = 3,350 SGD.

2.3. Singapore personal tax rate for tax non-resident

For tax non-residents, you need to remember the following

• All income earned within Singapore is subject to taxation;
• You can claim deductions for eligible expenses and charitable contributions, which helps optimize your income tax in Singapore.
• There are 2 forms of tax rates: a fixed 15% tax rate applies to certain types of income and a progressive tax rate from 0% to 24%. The tax amount you pay is based on whichever results is in the higher amount.
• The tax calculation for tax non-residents is similar to that for tax resident individuals in Singapore

For non-tax residents (individuals who have spent less than 183 days in Singapore), their taxable income is determined as outlined in the IRAS section on determining tax residency status.

Cases such as directors, experts, and performers will be taxed as follows:

For example: Mr. Lam is a director for a company in Singapore. He has an Employment Pass and has worked more than 60 days in Singapore), receiving a salary of 85,000 SGD in 2024. Mr. Lam's personal income tax is calculated as follows :

3. Tax treatment on foreign-sourced income an

In general, income earned from overseas is not taxable, even if it is deposited in a Singapore bank account. 

However, foreign income is taxable under the following conditions:

• The foreign income comes from the job requiring travel outside Singapore;
• The individual works in Singapore for a foreign employer;
• The income is received in Singapore through a partnership (unless it qualifies for an exemption);
• The individual earned the income abroad while working for the Singapore government;
• The individual received income in Singapore for professional, technical, consultancy, or other services completed overseas at a temporary location.

4. Income exempt from tax

Capital Gains: Singapore does not tax income considered as capital gains. This includes profits from the sale of fixed assets, stocks, bonds, and intangible assets like goodwill.

Dividend Income: Singapore does not tax dividends issued by Singaporean companies. In some cases, dividends from companies based in Hong Kong and Malaysia are also not taxed.

Inheritance: In 2008, Singapore abolished inheritance tax, also known as estate duty, on the assets of a deceased individual. Common estate assets that are no longer taxed include immovable property.

5. Claiming exemptions under Avoidance of Double Taxation Agreements (DTAs)

Juridical double taxation happens when the same income is taxed twice - once in the jurisdiction where the income originates and again in the jurisdiction where it is received.

Only tax residents of Singapore and its DTA partners can benefit from a  double taxation agreements 

• Tax residents of DTA Partners

If you are a tax resident of a country that has a DTA with Singapore, you can avoid being taxed twice on the same income in Singapore.

• Exemption on short-term Singapore employment income

This can happen if you are working for a foreign employer.

If you are eligible, you can submit the Claim for DTA Exemption and Certificate of Residence to IRAS.

• Tax residents of Singapore

If you earn income from another jurisdiction, you may be taxed there. However, you can claim DTA benefits to enjoy a reduced tax rate or tax exemption in that jurisdiction. 

To earn the tax exemption, you need to submit the Certificate of Residency (COR) to the foreign tax authority to prove your Singapore tax residency.

6. How to file Singapore personal tax returns?

Individuals in Singapore, whether residents or non-residents, who have an annual income below 22,000 SGD are not mandated to pay taxes but are required to file a tax return if requested by the IRAS tax authority. Even if their income is zero, it's necessary to declare zero income tax on the tax form and submit it to the IRAS agency.

All eligible taxpayers must fulfill their annual tax filing obligations. The annual deadline for filing taxes is typically:

• April 15 for hard copy submissions or; 
• April 18 for electronic submissions.

Tax returns can be filed online or by mail, and the IRAS will provide the appropriate form based on the individual's residential status. Common forms include:

• Completion of Form B1 (income tax return for tax resident individuals) for paying personal income tax in Singapore; 
• Filling out Form M (income tax return for individuals not residing in Singapore).

 Completing Form B (income tax return for self-employed individuals or private business owners - Sole Proprietorship).

Be mindful that you may face penalties for not declaring Singapore personal income tax, not paying tax, or paying late.

Therefore, seeking assistance from a reputable, professional, and dedicated tax consulting service such as Global Link Asia Consulting can effectively support individuals or businesses in accurately and appropriately calculating and declaring taxes.

7. How can we help you deal with Singapore personal tax?

With over 10 years of experience helping foreign entrepreneurs and business owners deal with Singapore personal tax, we can help you with

• Singapore personal tax consulting: We offer expert guidance and support focusing on personal income tax regulations, including rates, exemptions, and deductions;
• Accurate document preparation: We assist in preparing essential personal tax documents, ensuring accuracy and completeness in tax declarations;
• Timely tax filing: Our team facilitates the process of filing personal taxes with Singapore tax authorities IRAS.

In addition, Global Link Asia Consulting, as your trusted one-stop corporate service provider helping hundreds of business owners start their businesses overseas and manage their companies with success, can help you

• Register a company in Singapore;
• Open a corporate bank account in Singapore with a 99% success rate;
• Choose the right company types for tax optimization in Singapore;
• Apply for Singapore business licenses;
• Get an affordable, professional registered office address for business;
• Support to open, authenticate, and manage Stripe Paypal Business in Singapore, Hong Kong, and the U.S;
• Handle all your tax accounting needs, timely annual filings, auditing, and more.

8. FAQs about Singapore personal tax income

We offer a comprehensive range of accounting and tax services for Singaporean companies. Our services include:

• Tax Consulting including corporate income tax, GST tax, contractor tax, and more.
• Monthly/Annual Tax Accounting services in accordance with Singapore accounting standards (SFRS).
• QuickBooks Consulting and Licensing.
• Corporate Income Tax Return Preparation
• GST Tax Return Preparation.

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