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Singapore’s personal tax rates start at 0% and are capped at 22% (according to Year of Assessment 2023) for Singapore residents and a flat rate of 15% to 22% for non-residents (according to Year of Assessment 2023). In this article, we highlight what income tax is, the various tax rates applicable in different jurisdictions and how to calculate it for yourself.
What is Income Tax?
The term income tax refers to a type of tax that governments impose on income generated by businesses and individuals. Taxation rates may vary by type or characteristics of the taxpayer and the type of income.
When is Income Taxable?
Income is taxable when it accrues in or is derived from Singapore, whether or not the individual is resident in Singapore. Income derived from sources outside Singapore is only taxable if it is received in Singapore by a resident individual through a partnership in Singapore.
Personal Tax Rates for Singapore Residents
As a resident of Singapore, your tax rates start at 0% and are capped at 22%. Filing of personal tax return for tax resident is mandatory if your annual income is S$20,000 or more. Tax residents do not need to pay tax if your annual income is less than S$20,000. Additionally, earned income relief is also given to further reduce the tax payable depending on age.
Personal Tax Rates for non-Residents in Singapore
In Singapore, you will not be considered a resident if you are a foreigner who stayed or worked in Singapore for less than 183 days in the tax year. Therefore, you will be taxed on all income earned in Singapore under an income tax rate of 15% to 22% depending on your income. You may claim expenses and donations to save tax. However, you are not eligible to claim personal reliefs.
On the other hand, non-residents that reside in Singapore for under 60 days or less in a tax year will not be exempted from tax if you are a director of a company, a public entertainer or exercising a profession in Singapore. Professionals include foreign experts, foreign speakers, queen’s counsels, consultants, trainers, coaches, etc.
Corporate Income Tax Rates in Singapore
As both a local or foreign business-owner in Singapore, corporate tax rates do apply. According to the Inland Revenue Authority of Singapore (IRAS), your company is taxed at a flat rate of 17% of its chargeable income.
Corporate income tax rebates are given to companies to ease their business costs and to support their restructuring, these apply to income derived by Registered Business Trusts, non-resident companies that are not subject to a final withholding tax and companies that receive income taxed at a concessionary tax rate.
How to Calculate Income Tax?
To calculate your personal income tax according to your given income, refer to this table by IRAS. To calculate your corporate tax rates, refer to this Basic Corporate Tax Calculator (BTC) by IRAS to prepare your company's tax computation and work out the tax payable.
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