Singapore Tax Laws and Tax System 2016

Singapore Income Taxes 2016

Last partial update, May 2016.

Individual Income Tax: Singapore's individual income tax rates for 2016 are progressive, from 2% to 22%.

Personal annual tax rates 2016 (SGD, Singapore Dollar)

Income (Singapore DOLLAR)	%
1-20,000	-
20,001-30,000	2
30,001-40,000	3.5
40,001-80,000	7
80,001-120,000	11.5
120,001 -160,000	15
160,001-200,000	18
200,001-240,000	19
240,001-280,000	19.5
280,001-320-000	20
Over 320,001	22

There is a tax rebate, subject to a ceiling, 30% for taxpayers aged under 60 and 50% if aged above 60 years.
Non-residents pay the higher of15% or general rates on employment income and 22% on director's fees, consulting fees and other income.

Corporate Tax: Singapore corporate tax rate for 2013 is 17%. There are reductions for the first SGD 300,000. 75% of the first SGD 10,000 and 50% of the next SGD 290,000 are tax exempt.

Capital Gains: There is no capital gain tax for both companies and individuals.
Dividend income is tax exempt by the recipients.

Singapore Residence

A company is resident when having its actual management in Singapore.
Individuals are resident when generally living in Singapore. Foreigners are residents if living in Singapore 183 days or more in a calendar year.
The Singapore income tax is imposed on a territorial basis. Singapore companies and individuals pay income tax only on Singapore source income. Income derived outside of Singapore is tax exempt.

Singapore Business Deductions

Losses are carried forward indefinitely. There is a carry back for one year up to $ 100,000.
Depreciation is deducted according to the type of the fixed asset.The depreciation rate for hardware, software and automation equipment is 100% (one year).Fixed asset of up to $ 1,000 can be depreciated in one year too.
Vehicles and other fixed assets are depreciated 33.3% per year.
There is no company consolidation for tax purpose. Under certain term companies from the same group can offset within the group unutilized loss and capital allowances.
Thin capitalisation rules are not in effect in Singapore.

Singapore Tax Credits and Deductions

For Singapore residents there are tax credits and deductions.
Courses fees relief- up to $5,500 per year.
Earned income relief 30% for earners under 60.
Age 60 or more 50% subject to ceiling.
For handicapped people a relief of $ 4,000-12,000 depending on age.
Relief for handicapped parent - $ 4,500- $ 7,000 staying/non staying parent.
Handicapped child relief - $4,000-$ 5,500 per child.
Handicapped spouse relief- $ 2,000.
Medical expenses-up to 1% of the gross salary.

Singapore Tax Withholding Rates

In Singapore tax is deducted at source from the following payments to non residents:
Dividend- 0%.
Interest- 15%.
Royalties- 10%.
Branch remittance to head office- 0%.

Singapore Social Security CPF (Central Provident Fund)

The contributions by the employer and the employee to CPF, central provident funds are subject to to ceiling defined by law.

Employer: 17% of the gross salary.
Employee: 20% of the gross salary.

More info www.iras.gov.sg

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