Make sure that you know all about tax filing in Singapore if you are living and working in the country.
In Singapore, computing personal income tax is based on a progressive structure. It is essential to know the taxable income types versus the non-taxable ones. Are you a non-resident in Singapore? It is imperative to know whether the tax filing Singapore applies to you or not.
The rate of personal income tax Singapore is one of the world’s lowest. Therefore, it is necessary to determine the chargeable income and the tax residency to ascertain your income tax liability in Singapore. The progressive resident rate of tax applies after that. Some of the significant points of personal income tax in Singapore are as follows:
1. Tax rules vary based on an individual’s tax residency
2. The country does not impose inheritance or capital gain tax
3. There is a progressive tax rate for the residents of Singapore beginning at 0 percent and concluding at 22 percent above S$320,000
4. Individuals need to file their tax on April 15 every year. The assessment of income tax in the country depends on the preceding year
5. A person is taxed solely on his/her earnings in Singapore. When an individual earns his/her income overseas, it is not subject to taxation except for a few cases.
Tax Rates For Personal Income In Singapore
The individual residents of Singapore must file their returns for income tax Singapore in case their yearly income is at least S$20,000. On the other hand, residents do not have to pay tax when their annual salary is below S$20,000. Nevertheless, an individual might still have to file their tax return when the tax authority tells them to submit their tax return.
Rules for income tax in Singapore can vary based on the individual’s tax residency status.
Personal Tax For Residents Of Singapore
A person is regarded as a tax resident in Singapore when they are:
1. A Permanent Resident of Singapore and have set up his/her permanent house in the country
2. A Singaporean
3. A foreigner but has worked or stayed in Singapore for at least 183 days in a tax year
Also, a tax resident has to pay their taxes on chargeable earnings according to the resident rate of tax.
Personal Tax For Non-Residents Of Singapore
A person can be regarded as a non-resident in Singapore for taxation purposes. It is so when he/she is a foreigner who worked or stayed in the country for less than one hundred and eighty-three days in a tax year. Also, a non-resident can be taxed in Singapore, as mentioned below:
1. The employment income of a person can enjoy tax exemption when he/she is in Singapore on short-term employment. Short-Term employment refers to less than equal to 60 days in a year.
However, this exemption does not apply to the personnel:
a. Director of a company
b. Public entertainer
C. Professionals like coaches, trainers, consultants, queen’s counsels, foreign speakers, and foreign experts
2. When a person lives here for 61-182 days annually, their income earned in Singapore will be taxable. However, they can claim donations and expenses to save tax. They are not in a position for claiming personal reliefs in Singapore though. Such a person’s income is taxed at the progressive resident rate of tax or at 15 percent, whichever is higher.
3. The remuneration and fees of the director/consultation fees can be taxable in the range of 15 to 22 percent.
Filing Returns For Personal Income Tax
Every eligible taxpayer in Singapore should file their tax return yearly. Also, they should submit all duly completed forms to the tax authority of Singapore by April 15 every year. As mentioned earlier, a person only has to file tax when his/her annual income is at least S$20,000. A person may still have to declare 0 income while filing their return even when they had no income in the previous years.
You can opt to file your tax returns by mail or online in Singapore. IRAS can send the relevant paper tax form when requested. The online form is available every year from March 1.
1. Form B1 – for a tax resident individual
2. Form M – for a non-resident individual;
3. Form B – for a self-employed person
Last, but not least, a person may be penalised for late tax filing Singapore or not filing.
You may be interested to know about Corporate Tax in Singapore.