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Tax Insights

2018-08-11
1323 | 42 | 5

Income Tax on Foreign Individuals in Singapore


A、Tax implicationsonresidents and non-residents

 

No of Days employed in SG

Resident/Non-Resident

Tax Implications

Tax Reliefs

At least 183 days in a  year

Resident

Income is taxed at  progressive resident rates  (refer to table below)

Yes

61-182 days in a year

Non-Resident

Employment income earned  in Singapore will be taxed at a flat  rate of 15% or the progressive resident  rates (refer to table below),  whichever results in a higher tax amount 
Director's fees and other income such  as rent earned in or derived from  Singapore will be taxed at the  prevailing rate of 20% (22% from Year of  Assessment 2017)

 

No

60 days or less in a year  

Non-Resident

Short-term employment  income earned in Singapore is exempt  from tax  This rule does not apply if 1) You are a director of a company,  a public entertainer or a professional in  Singapore; 

 2) Your absences from Singapore are  incidental to your Singapore employment.  In this case, your total income  (including income for services rendered  outside Singapore) is taxable in  full in Singapore.


Director's fees and other income are  taxed at the prevailing rate of 20% (22%  from Year of Assessment 2017).

 

No

 

Taxrelief: Income Tax Act Part X section 39 

In the caseofan individual resident in Singapore in the year of assessment, there shallbeallowed a deduction, in respect of earned income, which shall be 

a.in thecase of anindividual not falling within any other paragraph, the sum of $1,000or theamount of the earned income;

b. withoutprejudice to anydeduction allowable under paragraph (c) or (d),inthe case of an individual who, in the year immediately preceding the yearofassessment, was totally blind or suffering from any physical ormentaldisability which permanently and severely restricted his capacity forwork, thesum of $4,000 or the amount of the earned income;

c. in thecase of anindividual who, at any time in the year immediately preceding theyear ofassessment, was above 55 years of age but was not above 60 years ofage, the sum of $6,000 or theamount of the earned income; and

d. in thecase of anindividual who, at any time in the year immediately preceding theyear ofassessment, was above 60 years of age, the sum of $8,000 or theamount ofearned income,

whicheveris less.

 

 

B、Resident Tax Rates

 

Income Tax Act Schedule 2

 

RATES OF TAX ONCHARGEABLE INCOME OF

AN INDIVIDUAL OR AHINDU JOINT FAMILY

FOR YEAR OFASSESSMENT 2012 AND OF ANINDIVIDUAL FOR YEAR OF ASSESSMENT 2013 AND

SUBSEQUENT YEARS OFASSESSMENT

 

 


Chargeable  Income

Rate of Tax

For  every dollar of the first

$  20,000

Nil

For  every dollar of the next

$  10,000

2%

For  every dollar of the next

$  10,000

3.5%

For  every dollar of the next

$  40,000

7%

For  every dollar of the next

$  40,000

11.5%

For  every dollar of the next

$  40,000

15%

For  every dollar of the next

$  40,000

17%

For  every dollar of the next

$120,000

18%

For  every dollar exceeding

$320,000

20%.

 

 

 

ChargeableIncome: Income Tax Act Part Xsection 38

Thechargeable income of any person for anyyear of assessment shall be theremainder of his assessable income for that yearafter the reliefs anddeductions allowed in this Part have been made.

 

AssessableIncome: Income Tax Act Part IXsection 37

Theassessable income of any person from allsources chargeable with tax under thisAct for any year of assessment shall bethe remainder of his statutory incomefor that year after the deductions allowedin this Part have been made.

 

C、Illustration  (Assume1 SGD= 4.5RMB)

 

a. Monthly salary of 50,000 RMB,approximatelyequivalent to 133,333 SGD

 

Estimated Tax Payable in SG/year= 9,950 SGD

 

b. Monthly salary of 80,000 RMB,approximatelyequivalent to 213,333 SGD

 

Estimated Tax Payable inSG/year= 23,150 SGD

 

(Note: Income tax rebate of max 1000 SGD isonly applicable in yearof assessment 2015, so not applicable now)

 

D、Tax Filling

 

 

Income is assessed on a precedingyearbasis, ending 31 December. You must fileYourIncome Tax Return by 15 Apr of the following year. You canusuallyexpect to receive the income tax bills by September.

 

E、Comparison of Tax Computationbetween China and Singapore

 

Situation

Country

Annual Income

Annual Tax Implication

Country with Lower Tax

Difference in RMB

 1

China

600,000 RMB

134,340 RMB

 Singapore

 89,565

Singapore

133,333 SGD

9,950 SGD

(about  44,775 RMB)

 2

China

960,000 RMB

255,240 RMB

 Singapore

 121,065

Singapore

213,333 SGD

23,150 SGD (about 104,175 RMB)

 

Assumptions: 

1) 1 SGD= 4.5 RMB  

2) Noemployment expenses and personalreliefs are considered

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