One of the best business registration firm and corporate solutions specialist in Singapore – Rikvin assured that Singapore’s Personal Income Tax structure is one of the friendliest and most competitive in the world. The tax year is from 1 January to 31 December in each calendar year and income is assessed on a preceding year basis. Singapore adopts a progressive personal tax rates, relative to an individual’s amount of income.
Below are some of the relevant factors of Singapore income tax:
- The amount of income tax that you have to pay depends on your tax residency in Singapore. The taxes for residents are different from non-residents.
- Top marginal resident tax rate of 20% kicks in at S$ 320,000 of taxable income.
- Non-residents are taxed at the flat rate of 15% or the resident rates whichever results in a higher tax amount.
- In general, all remuneration arising from an employment under which duties are performed in Singapore would be fully taxable irrespective of where the funds are made available to you
- Besides salaries and bonuses, perquisites such as housing and stock options will form part of your taxable employment income.
It is mandatory under the law of Singapore government to file Singapore personal income tax. IRAS diligently enforces the requirements relating to the filing of the personal tax and convincing both tax residents and non-residents to comply in order to avoid paying fines and/or court prosecution.
For those who will fail to abide with the law, the following consequences should apply:
- If the tax is not paid by the due date, a 5% penalty and 1% additional penalty per month up to 12% (total of 17%) will be imposed.
- Additional penalty of 1% up to a maximum of 12% on any unpaid tax for each month that the tax remains unpaid;
- IRAS may direct the taxpayer’s employer to deduct any unpaid tax from his salary;
- IRAS may direct the taxpayer’s banks, tenants or any third parties to pay any unpaid tax to IRAS from any money held for the taxpayer or due to him;
- IRAS may restrict the taxpayer from leaving Singapore
- IRAS may take legal actions against the taxpayer.
Finally, we have outlined some Tips on ways to save tax
- Tax residents are eligible for tax reliefs that can be offset against the assessable income. You can get reliefs for wife support, child maintenance etc.
- You may claim expenses incurred against your employment income; enjoy tax deductions for approved charitable donations.
- Under the Not Ordinarily Resident (NOR) Scheme, you can enjoy either Time Apportionment of Singapore employment income or Tax Exemption of Employer’s contributions to Overseas Pension Fund, or both.
- If you work for a foreign employer and need to travel overseas in the course of work, you may enjoy time apportionment of employment income under the Area Representative Scheme.
- With the Avoidance of Double Taxation Treaties signed by Singapore, your income may not be taxed twice in Singapore and your home country. (For more information on countries which have Avoidance of Double Taxation Treaties with Singapore, see List of DTA Treaties)
Rikvin services team consists of a group of professionals who have in depth knowledge, legal, financial, tax, Singapore personal income tax, and corporate and regulatory frameworks. They guide you through every step, respond promptly, and closely follow your application progress to ensure that your case is presented in the best possible manner that it deserves.