Singapore

2012 Tax rates of Singapore

Corporate tax

Rate

The corporate tax rate of Singapore is a three tier system. First SGD 10,000 is 75% exempted, Secondly the next SGD 290,000 is 50% exempted. Rates beyond this is taxed at a flat rate of 17%. Corporate tax is imposed on company profits. Company profits consist of all types of income. Cost exclusively related to acquire income may be deducted along taxable income. Certain rules apply for private exempt company whereas the first SGD 100,000 may be exempted, the next SGD 200,000 will be 50% exempt for it’s first consecutive three year period(valid from 2005), with certain conditions met.

Taxation of dividends

Singapore applies a 1-tier corporate tax system. This means that, when the corporate tax is paid on a company’s profit, this is final. Any dividends paid is fully tax exempt to the receiver.

Capital gains

Capital gains in Singapore are fully tax-exempt since it doesn’t apply any taxation for dividends.

Losses

Losses can be carried forward indefinitely, whereas certain rules apply. Losses may also be carried back for one year, with a ceiling of SGD 100,000 with compliance to the shareholding test.

Withholding tax

There is no withholding tax levied if the dividends is paid by companies residing in Singapore.

 

Individual tax

General

Individuals living or regularly residing(183 days or more), is considered a resident for tax purpose. Taxation for a Singapore resident is taxed on their income acquired in or derived from Singapore. Income acquired from a foreign country received in Singapore by a tax-resident is tax exempt from their income tax.

Taxable income

Taxable income includes gains or profits from a trade or profession and earnings from an employment at a rate ranging from 2% to 20%. Nonresidents are taxed at a higher flat rate of 15% and leaving no deductions for personal reliefs or allowances. Consultants or directors fees are taxed at a flat rate of 20%. If a nonresident individual is taking a short-term employment in Singapore for a maximum of 60 days, income derived from Singapore source, may be tax exempt.

Rates

Progressive tax rates is levied on income tax, 2% to 20%.

Capital Gains

There is no tax on capital gains in Singapore.

Deductions

Singapore resident individuals may deducted against assessable income. Tax rebates are deducted from tax payable to determine final tax for an individual.

Real Estate

Individuals are subject to 0%, 4% or 6% for owner-occupied residential property. All other is taxed at a flat rate of 10%. Certain rules apply where a property tax may be fully exempt. Property tax is levied on all immovable properties in Singapore. The tax is paid annually. Tax payable is calculated using the gross annual value of the property as determined by the property tax department.

Net Worth Tax

There exist no net worth tax in Singapore.

Inheritance Tax

There exist no inheritance tax in Singapore.

Social Security

Employed Singapore citizens or permanent residents contributes to the social security with a flat rate of 20%. Graduated rates may be applied for the first three years once attaining a permanent resident.

VAT

VAT applies to all sales of goods, services and imports. The VAT is 7% for domestic, 0% rate for international services and exports.

 

Other

Tax year. Calendar year.

Tax treaties. Singapore currently has 68 treaties.

Filing requirements. Quarterly VAT return applies, must be filed at latest one month after the end of the three month accounting period. Tax payable for this accounting period must be made at the time the VAT return is submitted.

Registration (for VAT purpose). Singapore companies must register for VAT purposes if the turnover exceeds SGD 1 million. Companies may also register for VAT purposes if the turnover is less then this. Once a company has registered for VAT purpose, it must stay registered for at least two years.

 

Links

Tax authorities.

Consulate

Local Tax Resources

Chamber of commerce

(Online realtor/stock exchange)