When it comes to taxation for foreign investors in Singapore, it is important to note that personal taxationin this country is moderate and progressive. Resident persons who gain employment income commonly are granted earned income relief in different amounts. Furthermore, there are quite a few other types of tax reliefs.
Our accountants invite you to watch the following video summarizing taxation for foreign investors in Singapore:
Contributions of employers in Singapore
Employers, as well as employees, have to make contributions to the Central Provident Fund (CPF) if the persons who are hired are citizens of Singapore or permanent residents. Foreign employees – who are not permanent residents or citizens – and their employers do not have to contribute to the CPF. The employee’s contribution can be deducted from the taxable income (see below) and the employer’s contribution is exempt from taxation for foreign investors in Singapore unless the contribution surpasses the statutory limit.
Taxable income for foreign investors in Singapore
Income in Singapore includes:
• gains or profits from an activity or profession;
• earnings from employment: is due to be derived from Singapore if the employment is exercised in the country (for example, if the services are implemented in Singapore), no matter where the remuneration is actually received. It includes wages, leave pay, fees, commissions, bonuses, gratuities, perquisites, allowances and benefits in-kind (for example, meals, clothes and housing provided by the employer). Our accountants in Singapore can provide more information on this matter;
• pensions and annuities.
Dividends resulting from payments from companies under the one-tier taxation system are exempt from taxes.
Individual inventors can receive an exemption of 90% on the gross income from royalties.
Interest income resulted from an individual form of money deposit in a standard savings, current or fixed deposit account with a recognized bank or finance corporation in Singapore is exempt from taxation.
Net rental income resulted from a property in Singapore is accumulated with other income and is subject to tax in Singapore.
Capital gains earned by an individual are not taxed, because Singapore does not tax capital gains. Our accountants in Singapore – link to HOME - could give further information regarding capital gains.
Rates of taxation in Singapore
The taxation rates for foreign investors in Singapore are:
• Resident persons are taxed progressively, at rates which range between 2% and 20%;
• Nonresident individuals are taxed at the higher of a fixed rate of 15% (without any deductions of personal relief and allowances) and resident tax rates;
• All other income resulted from sources in Singapore, together with director’s fees and consultant’s fees, are taxed at a fixed rate of 20%.
• Nonresident persons who are not directors hired on a short-term basis for maximum 60 days of the calendar year could be exempt from taxation in Singapore.
Do you need to know more about taxation for foreign investors in Singapore? Please contact us for more details.