FAQ ON INDIVIDUAL TAX MATTERS
You need to pay income tax on all income you have earned / received in Singapore. Overseas income which was received in Singapore (including those paid into a Singapore bank account) on or after 1 Jan 2004 is not taxable. This does not apply to overseas income received in Singapore through partnership in Singapore. Income tax is assessed based on a preceding year basis. For example, for Year of Assessment 2013, you will be taxed on the income earned in year 2012.
Foreigners refer to individuals who are not Singapore citizens or permanent residents. Foreigners are liable to tax in Singapore on all income accrued in, or derived from Singapore. The extent of your tax liability will depend on your tax residency status.
The amount of income tax you need to pay depends on how much you earn in Singapore and whether you are considered a tax resident or non-resident for income tax purposes.
You are considered a tax resident for a particular Year of Assessment (YA) if you are:
- a Singaporean; or
- a Singapore Permanent Resident (SPR) if you have established your permanent home in Singapore; or
- a foreigner who has stayed/worked in Singapore for 183 days or more in the year preceding the YA, in a capacity other than that of a director of a company.
Tax residents may claim expenses, donations and tax relief to help them save tax. If you are a tax resident, your total income less deductions (expenses, donations and tax relief) will be subject to tax at progressive rates ranging from 0% to 20%.
You are considered a non-resident for a particular YA if you are a foreigner:
who stayed/worked in Singapore for less than 183 days in the previous year who is a director of a company (without any employment pass)
Non-residents may claim expenses and donations to save tax. However, non-residents are not eligible to claim tax relief. If you are a non-resident, your employment income is taxed at 15% or the resident rate whichever gives rise to a higher tax amount. Director fees, consultant fees and all other incomes are taxed at 20%.
Refer to Personal Tax Rates above.
Singapore does not impose any capital gains tax. Inheritance tax is a tax that you have to pay when you die which comes out of the financial estate that you leave behind. In Singapore, it is commonly referred to as Estate Duty. Estate Duty in Singapore has been abolished effective 2008.