Tax System & Tax Rates

Tax-System

Almost after a decade, Singapore witnessed first ever change in the Personal Income tax rates. To meet the increased demands of funds in the future, the Singapore government has made provisions to levy increased taxes on wealthy Singaporeans. We are proud to have a competent team that continuously monitors and stay abreast with all the latest and even minutest change in the Singapore tax system & tax rates. To know more, you can get in touch with singaporeaudit.com.sg.

Singapore indeed has one of the most liberal and flexible tax systems in the world. To attract foreign entrepreneurs and investors to the country, the Singaporean government apart from offering lower corporate tax rates, also offers various tax incentives and exemptions for businesses and individuals alike. For better understanding of the Singapore tax system, let us explore the prevailing tax system and tax rates in the country.

Role of Inland Revenue Authority Singapore (IRAS)

The Inland Revenue Authority Singapore (IRAS) is the sole governing body handling and looking after all the subsequent income tax related issues in Singapore. On 1 September 1992, the IRAS officially came into existence with an aim to control, govern and resolve all the issues related to the Singapore taxation regime, including corporate tax, personal tax, property tax, goods and services tax, withholding tax and double tax. Individuals as well as the Singapore incorporated companies are mandated to file their income tax returns, exemptions, rebates and queries to the IRAS.

Tax System and Tax Rates of Singapore 2013

Corporate Tax:

  • The headline corporate tax rate in Singapore is at a flat 17% on the income of S$300,001 to S$2,000,000.
  • From YA 2013 to YA 2015 Companies are granted 30% corporate income tax rebate  capped at S$30,000 per year.
  • For YA 2016 and YA 2017 Companies are provisioned to be granted a corporate income tax rebate of 30% capped at S$20,000 per year.
  • Additionally, there is a zero percent tax on the capital gains and no tax on the dividends distributed to the shareholders.

Personal Tax:

  • From the YA 2012 to YA 2016 the tax rates will remain the same.
  • The above said income tax rates start at 0% of the  income earned up to and below S$20,000 per year and are capped at 20% for income earned above S$320,000.
  • From the YA 2017 onwards revised income tax rates, will be applicable as proposed in the Singapore budget 2015.
  • The revised personal income tax rates have revised income slabs from income ranging from S$200,000 to S$320,000.
  • The revised personal income tax rates will also start from 0% applicable to income earned up to or below S$20,000 and will be capped at 22 % applicable to income earned above S$320,000.
  • In addition to that, Singapore Budget 2015 announces a personal income tax rebate of 50% on net income tax payable up to maximum S$1,500 for the YA 2015.

Property Tax:
According to the revisions mentioned in the Singapore Budget 2015, the changed property tax rates are

  • Owner occupied residential property will be charged at a tax rate ranging from 0% – 15%
  • Non-owner-occupied residential property will be charged at a tax rate ranging from 10% – 19%
  • The non-residential property will be charged with the same tax rate at a flat 10% rate.

Goods and Services Tax:

  • Goods and Service Tax also called as GST is applied on supplies of all local sales of goods and services unless those are exempted to zero-rated as per the current GST law. .
  • From 2013 GST rate is fixed at 7% and continues to remain the same as per Budget 2015

Withholding Tax:
After a Singaporean company or an individual makes payment of a certain nature like royalty, interest, technical service, fees, etc., to a non-resident company or an individual, the Singaporean party paying that amount has to withhold a specific percentage of that payment, in order to pay the withheld amount later to the IRAS. This withheld amount is called Withholding tax.

  • As of now, the withholding tax ranges between 10 to 15%, depending on the nature of business activities and type of non-resident companies.
  • A non-resident company is one that does not come under the umbrella of the Singapore taxation laws.  
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