Living and working in Singapore has many benefits. Not only can you pamper yourself with the best place in Asia to live, work and play, you also get to enjoy the other great nations of South-east Asia such as Vietnam, Cambodia, Malaysia, Thailand and Indonesia, which are all not more than two-hours flight away from Singapore’s world-class Changi airport.
To top it all – and this probably is the foremost attraction for foreigners wishing to relocate to the city-state – the country offers people-friendly tax policies. In this guide, we present a detailed overview of income tax rates for tax-resident foreigners in Singapore, as well as the various rebates and reliefs that they are entitled to.
In general, the Inland Revenue Authority of Singapore (IRAS), Singapore’s tax regulator, treats non-Singaporeans and non-Singapore Permanent Residents as foreigners for tax purposes. Such individuals, depending on their tax-residency status, are liable to income tax on all income derived from or accrued in Singapore.
Tax-residency of Foreigners in Singapore
This is important as it determines the amount of taxes a foreigner pays in Singapore, with the cut-off periods being 60 days and 183 days. Let’s understand this in detail.
At least 183 days
Under the city-state’s tax residency rules, a foreigner is regarded as a tax resident if he or she stays or works in Singapore for at least 183 days in a calendar year. Notably, the number of counted days includes weekends and public holidays, and any temporary absence from work for overseas vacation or official work.
So the tax implications will be:
While the foreigner can claim tax reliefs (discussed below) when filing up the Form B1 applicable to tax-residents, his or her foreign-sourced income brought into Singapore is tax-exempt.
Do note that according to the rules, a foreigner who stays or works in Singapore continuously for three consecutive years, he or she is regarded as a tax resident for all the three years even if the number of days in Singapore is less than 183 days in the first and third year.
The progressive resident rates range from zero to 20 percent with the topmost rates kicking in at S$320,000 annual income as detailed below.
The prevailing rates (from 2012 onwards) are as follows:
Click here to Use our Online Tax Calculator to estimate your payable personal income tax for the current Year of Assessment.
Not Ordinarily Resident Scheme
To be eligible, an individual must be:
- a non-resident in Singapore for tax purposes in the past three years of assessment; and
- in that year of assessment in which the individual qualified for the NOR status, he or she must have been a Singapore tax-resident
Importantly, to retain a NOR taxpayer status, the foreigner is only required to be a tax resident in the first year of assessment, and not throughout the 5-year qualifying period.
Benefits of the Not Ordinarily Resident scheme
- a NOR taxpayer pays income tax on only that part of his employment income that corresponds with the number of days he spends in Singapore provided he had spent at least 90 days outside Singapore for business reasons and has got at least $160,000 as total Singapore employment income.
- a NOR taxpayer gets to enjoy tax exemption on contributions made by the employer to a non-mandatory overseas pension fund which would otherwise be taxable in his hands.
Less than 183 days
As is self-evident , a foreigner is a non-resident for tax purposes if his or her stay in Singapore is less than 183 days in a calendar year. For such individuals:
No tax reliefs are given when filing the Form M applicable to non-residents but only the income earned in Singapore is taxed at a flat rate of 15 percent (or at progressive resident rates, if it gives a higher tax liability). Notably, Director’s fee are taxed at a slight higher rate of flat 20 percent.
Less than or equal to 60 days
For foreigners who are in Singapore for less than or equal to 60 days, IRAS doesn’t charge any taxes and treat them as non-residents too.
Do note that this exemption does not apply to directors of a company, public entertainers, foreign experts, foreign speakers, queen’s counsels, consultants, trainers, coaches, etc. (i.e. all these come under the category of “professionals”).
NOTE: Every foreigner who is issued a work pass of at least one year validity in Singapore is treated as a tax-resident up front by the IRAS. Later, when the foreigner’s employment ceases, the tax-residency status is reviewed again. If the stay or work was less than 183 days, the foreigner’s status is changed to being a non-resident.
Filing Date in Singapore
IRAS mandates that all tax returns must be filed (with completed paper tax form) by April 15 every year. If individuals are using the IRAS e-filing portal, this deadline is extended to three more days i.e. April 18.
In exceptional circumstances, the filing date may be extended too. But for that the requisite application must be send to IRAS by March 31, detailing the reasons for the desired extension, full name, tax reference number, and an estimate of the chargeable income.
Do note that sometimes IRAS may waive the requirement to file an income tax return for taxpayers who only have Auto-Inclusion Scheme (AIS) for employment income and their relief claims are the same as the previous year.
Income Tax Reliefs for Tax Residents* in Singapore
*either local or foreign tax-resident
Even though the progressive rates for personal income tax ranges from zero to 20 percent in Singapore, the effective payable tax may come out to be much lower if one takes advantages of the various schemes the Singapore Government has initiated. These include reliefs on earned income; spouse, child and parent-support; reliefs on life insurance policies , course fees, and foreign maid levy; and the relief given on Supplementary Retirement Scheme (SRS). Below we detail the qualifying conditions and amount of tax relief given on each.