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Singapore - Income Tax
In addition, Singapore has a single level of government so taxation is not as much of a burden as it is on the citizens of some countries. Personal income tax starts at 2% on the first S$5,000 and then gradually increases to 28% on income that is more than S$400,000. As an expat, your income tax will depend on how much money you earn, whether or not you are considered a tax resident or a non-tax resident, and if your home country has a tax treaty with Singapore.
Singapore currently has tax treaties with more than 50 different countries. These are double taxation agreements and An Avoidance of Double Taxation Agreement ("DTA") between Singapore and another jurisdiction prevents double taxation of income earned in one jurisdiction by a resident of the other. The agreements also offer a reduction or exemption of tax on certain types of income. There are different kinds of agreements including the Comprehensive Avoidance of Double Taxation Agreement, Limited Treaties, Exchange of Information Arrangements, and Agreements which are Signed but not Ratified. You can find out more information on the IRAS website at http://iras.gov.sg/irasHome/page.aspx?id=812
Tax reliefs are offered as standard deductions against your assessable income. These are given to tax resident individuals. The reliefs you can claim for the Year of Assessment (YA) will be dependent upon your personal situation. Some of the relief schemes include: Earned Income Relief, Spouse Relief, Handicapped Spouse Relief, Qualifying Child Relief, Handicapped Child Relief, Parent Relief, Handicapped Parent Relief, Relief for Course Fees, Life Insurance Relief, Foreign Maid Relief Levy, and the Supplementary Retirement Scheme Relief. These are similar to the deductions that can be taken in the American tax system.
There are other expenses that can be claimed as well. For instance, you may claim deductions for approved charitable donations. You can also either get a Tax Exemption of Employer’s contributions to Overseas Pension Fund or Time Apportionment of Singapore employment income under the Not Ordinarily Resident Scheme.
As a foreigner, your tax residency will depend on the amount of time you have been employed in Singapore. If your stay in Singapore has been for at least 183 days then you will be considered a resident and your income will be taxed at progressive resident rates. You can also claim tax reliefs. If you have lived and worked in Singapore for less than 183 days, but more than 60, then your income is subject to tax at applicable rates to Singapore residents or 15%, whichever one is more. You cannot claim tax reliefs. For more information regarding tax-residency, visit: http://www.iras.gov.sg/irasHome/page01_ektid6140.aspx
If you live in Singapore but receive income from an outside source then it is exempt from being taxed.
Your income is assessed on the prior year and the period ends December 31st. Your income tax return must be filed by April 15th. Normally, you’ll get your income tax bills sometime in September. In addition to your salaries and any bonuses you might receive, stock options, housing (called Benefits in Kind), and other prerequisites are also considered part of your taxable income. The Benefits in Kind (BIK) like housing and car benefits are taxable at nominal rates while residential phone bills, school fees, and utilities are taxable on the actual amount that is paid by the employer.
As an expatriate you will only start paying taxes around 18 months after starting work in Singapore, thanks to the way the tax year is figured. Once you submit the tax returns the IRAS will issue you a Notice of Original Assessment. This might be followed by a Notice of Additional Assessment after the IRAS finishes the computation. Although your tax liability will be stated in one lump sum payable, you can generally apply to discharge it through installments throughout the year.
Before you leave Singapore, your employer has to get tax clearance from you. The majority of employers will hold onto the monies until your tax clearance is complete since they will be responsible for any tax that you might owe the IRAS. This will also apply if you change employers while you’re still in Singapore.
For more information, visit:
Inland Revenue Authority
55 Newton Road
(Opposite Novena MRT Station)
Opening Hours: Monday to Saturday, 8am - 5pm
Tel: 1 800 356 8300
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