Living in another country can be a relatively tough experience. You’ll have many things to learn, including new languages, and a new taxation system. Many people readily move to Singapore because living and staying here is quite beneficial. The country is one of the best places to live, play and work in Asia. It also offers quick access to other great nations, such as Vietnam, Malaysia, Indonesia, Thailand, and Cambodia. And what’s more, Singapore is popularly touted as a country with a low tax rate for individuals, including expatriates. This piece will reveal vital details about tax in Singapore for expats.
What Taxes Are Paid in Singapore?
If you’ve recently moved to Singapore, the first thing you need to identify is the taxes paid in this jurisdiction. Taxes are charged on the following in Singapore:
- Corporations
- Personal income
- Real estate
- Non-resident income
However, taxes are not charged on any of the following:
- Donations
- Inheritance
- Wealth
- Capital gains
- Dividends
You’d do well to note that the Singapore government has recently ordered an increase in tax for individuals with a high net worth. This was done to protect low-earning individuals and ensure that high earners contribute optimally to economic and social growth.
As an expat in Singapore, you’ll probably be concerned about the provisions of personal income tax and how it affects you. The first thing to note is that Singapore has a considerably favorable personal income tax regulation. That’s why you’ll find hundreds of expatriates, wealthy people, and entrepreneurs setting up shop here. These people are likely interested in benefiting from Singapore’s lenient tax laws, managing a private banking portfolio, and as an ideal location to run their business.
Like other Asian countries, Singapore is a territorially-taxed jurisdiction. This means that tax will only be charged on income generated or earned from activities within the country. Foreign income is not considered at all. Personal income tax in Singapore ranges between 0% – 22% (increasing to 24% from YA2024). The highest rates are charged for high earners. You need to note that progressive tax rates are charged on tax residents. Non-residents will be taxed at 15% or resident rate, depending on which results in a higher tax amount.
How To Obtain Tax Residency in Singapore?
Tax residency in Singapore is considered by many t-o be a desirable status. However, becoming a tax resident in Singapore isn’t gained automatically. According to the Inland Revenue Authority of Singapore, you will only become a tax resident under any of the following conditions;
- Staying in the country for more than 183 days – Under this condition, you’ll gain tax residency for that year.
- Staying in the country for at least 183 days over a continuous period of two years – In this scenario, the employment period of the individual should exceed two calendar years. The individual will enjoy being a tax resident for the two years they have spent in the country.
- Staying for three consecutive years – The individual will be a tax resident for three years.
Anyone who stays between 61 – 182 days or those employed for less than 60 days are considered non-tax residents. Singapore’s taxation rate encourages people to stay in the country and continue to earn from such activities.
What Are the Tax Filing Requirements in Singapore?
In many countries, expatriates have to submit numerous forms and undergo several checks before filing their taxes. However, the process in Singapore is relatively straightforward.
Your income will be assessed according to income earned during the preceding year, as of 31 December. You are required to file your tax before April 15 the following year.
A great way to avoid missing your tax payments is to sign up for the General Interbank Recurring Order (GIRO). This system will help you arrange for your next tax payment through regular 12-month deductions.
If you currently earn less than S$22,000, you’ll not be required to file taxes. You must note that most employers will submit salary information directly to the Inland Revenue Authority of Singapore. As a result, you may not need to submit any tax information.
What Tax Forms Do Expats in Singapore Have to File?
Singapore residents are required to file their taxes using form B1. This form is similar to what’s issued to expats on the tax payment due date (April 15). Whereas for self-employed is required to file their taxes using form B and non-resident individuals will report their earnings with form M.
How Can We Help?
Tax evasion and failing to pay your taxes are serious offenses in Singapore. It’s considered a criminal offense and is punishable by the law. The punishment for tax offenses will depend on the amount of money involved. First-time offenders who haven’t done anything too serious may be released with a simple warning. If not, you could pay up to 400% of the tax undercharged, pay a lump sum of $10,000, or get up to three years imprisonment. We’re sure that no well-meaning expatriate would like to default on their taxes. However, it can be tough to keep an eye on tax deadlines while performing day-to-day activities. That’s where we come in.
Premia TNC is a business consultancy service provider. We’ll work with you to ensure that your tax is paid on time and your filing is complete. Our tax experts will ensure everything is handled for you.
FAQs
What's the tax rate in Singapore?
The tax rate in Singapore varies depending on your residency status. Non-residents may be charged at a rate of 15% on reported income. However, residents are charged at a progressive rate of 0-24%.
Are expats exempt from tax?
All expats in Singapore are expected to pay tax on income earned within the country.
