{"id":106836,"date":"2024-01-11T13:54:25","date_gmt":"2024-01-11T05:54:25","guid":{"rendered":"https:\/\/premiatnc.com\/sg\/?p=106836"},"modified":"2024-09-16T16:00:18","modified_gmt":"2024-09-16T08:00:18","slug":"withholding-tax-rate-singapore","status":"publish","type":"post","link":"https:\/\/premiatnc.com\/sg\/blog\/withholding-tax-rate-singapore\/","title":{"rendered":"A Guide To Understanding The Withholding Tax Rate In Singapore"},"content":{"rendered":"\n
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Are you a new business owner who wants to learn more about the withholding tax rate Singapore has, but has no idea where to begin?<\/p>\n\n\n\n

Fret not, our experts at Premia TNC are here to clarify all your concerns and dispel all your doubts regarding all the important taxation matters <\/a>for your business, including the withholding tax in Singapore.<\/p>\n\n\n\n

Withholding tax is a term used to describe a certain amount of money that is deducted from an employee\u2019s earnings and paid to the government. Withholding tax in Singapore is paid by non-residents who earn from Singapore-based companies or whose income is sourced from Singapore.<\/p>\n\n\n\n

The withholding tax rate Singapore businesses are expected to pay vary depending on the type of payment and type of business entity transacting. There are also rules guiding the filing and payment of withholding taxes to the Inland Revenue Authority of Singapore.<\/p>\n\n\n\n

This guideline contains information on all you need to know about the withholding tax rate Singapore offers and a simple guide to teach you how to file withholding tax.<\/p>\n\n\n\n

9 Types Of Payments Subjected To Withholding Tax<\/h2>\n\n\n\n

Before diving into the withholding tax rate Singapore businesses are expected to pay, it is important to first know which payments are subjected to withholding tax. The following types of payments are subject to withholding tax in Singapore:<\/p>\n\n\n\n

1. Loan or debt-related fees like commissions and interests<\/h3>\n\n\n\n

All interests charged on overdue trade accounts, commissions or loan fees, and interest credits paid to a non-resident of Singapore are charged for withholding tax.<\/p>\n\n\n\n

2. Management fees<\/h3>\n\n\n\n

Payments to management service providers outside Singapore are charged for withholding tax. However, there are certain factors that dictate how and if the tax should be deducted such as your company\u2019s agreement of double taxation and whether it is a permanent organization in Singapore.<\/p>\n\n\n\n

3. Rent<\/h3>\n\n\n\n

Charges for movable properties paid to companies outside Singapore are subject to the withholding tax rate Singapore businesses are expected to pay.<\/p>\n\n\n\n

4. Intellectual property, royalties, ad right of use<\/h3>\n\n\n\n

The withholding tax rate Singapore businesses are expected to pay is charged on royalties <\/a>as well as payments made for the use of scientific, industrial, commercial, and technical knowledge for a business to a non-resident or even hiring a non-resident to help you apply these skills or expertise to your business.<\/p>\n\n\n\n

5. Rendered services<\/h3>\n\n\n\n

Payments paid to non-residents of Singapore for services rendered such as equipment installation, consultation, technical support, training, and other related services are subject to the withholding tax rate Singapore businesses are expected to pay. However, services that are offered remotely are exempted.<\/p>\n\n\n\n

6. Purchase of actual properties from a non-resident dealer or trader<\/h3>\n\n\n\n

Payments made for the purchase of properties like houses or cars in Singapore from a non-resident dealer or trader is subject to the withholding tax rate Singapore businesses are expected to pay.<\/p>\n\n\n\n

7. Payouts on structured financial products<\/h3>\n\n\n\n

Payouts from structured financial products in Singapore to non-resident individuals or businesses are subject to the withholding tax rate Singapore businesses are expected to pay.<\/p>\n\n\n\n

8. Dispersion of Real Estate Investment Trust (REIT)<\/h3>\n\n\n\n

Payments received from the REIT scheme in Singapore by non-resident individuals or companies are also subject to the withholding tax rate Singapore businesses are expected to pay.<\/p>\n\n\n\n

9. Fees for the charter of aircraft or ships<\/h3>\n\n\n\n

Fees received by non-resident entities for the charter of aircraft or ships in Singapore are subject to the withholding tax rate Singapore businesses are expected to pay.<\/p>\n\n\n\n

How Are Non-Resident Companies Affected?<\/h2>\n\n\n\n

In Singapore, a company is termed a non-resident based on its main location or where decisions are being made. Companies that carry out major operations and decisions outside Singapore are termed non-resident companies.<\/p>\n\n\n\n

Non-resident companies also include foreign companies invited by the government, other organizations or companies, or even private individuals to provide their products or services in Singapore. All non-resident companies are subject to the Singapore withholding tax and are liable to pay 15% of their gross income<\/a>.<\/p>\n\n\n\n

How Are Non-Resident Individuals Affected?<\/h2>\n\n\n\n

Non-resident individuals are individuals who spend less than 183 days per year in Singapore. There are three categories of non-resident individuals, which include: board directors, foreign professionals, and public entertainers.<\/p>\n\n\n\n

Board directors<\/h3>\n\n\n\n

Board directors are individuals that offer corporate services and do not spend up to 183 days of a calendar year in Singapore. Although board directors may hold positions in companies, they are only considered as companies when offering their services under the company. Board directors are charged 22% on all earnings, including salaries, accommodation, director\u2019s fees, profits from shares and stocks, bonuses, and any other income.<\/p>\n\n\n\n

Foreign professionals<\/h3>\n\n\n\n

Professionals who spend at least 183 days in a year in Singapore are called resident professionals. Foreign professionals are individuals from any of the following categories:<\/p>\n\n\n\n