Singapore Personal Income Tax
Singapore is one of the developed countries with the lowest tax rates in the world and is recognized as a "global legal tax haven". Singapore's low tax rates, favorable tax policies, and stable and safe living environment are the main reasons why it has become one of the top ten preferred destinations for overseas investment and immigration worldwide. The maximum corporate income tax rate in Singapore is 17%, and the maximum personal income tax rate does not exceed 22%, and there is no capital gains tax or inheritance tax.
Who needs to pay taxes
1. Singaporean citizens and individuals who have settled in Singapore and become permanent residents;
Individuals who are not citizens or permanent residents but meet any of the following criteria:
(1) An actual stay or work in Singapore for no less than 183 days within a calendar year is considered a tax resident of Singapore;
(2) Continuously staying or working in Singapore without interruption for three calendar years is considered a Singapore tax resident for all three calendar years.
How much income needs to be taxed
The minimum threshold for personal income tax is 20000 Singapore dollars. Residents with income below the threshold do not need to pay personal income tax. The portion exceeding 20000 Singapore dollars will be subject to a tiered tax system:
Note: Residents with an annual income of less than 20000 do not need to be bonded, but still need to declare.
For example, if a bus driver's monthly salary in Singapore is SGD 2200, then the total annual income is SGD 6400, which is SGD 2200 * 12. According to the tax rate shown in the figure below, the first 20000 SGD does not need to be taxed, and the tax payable for the remaining 6400 SGD is 6400 * 2%=128 SGD. So the actual total tax paid is 128 Singapore dollars.
Do we need to proactively file taxes
Firstly, IRAS will determine whether you need to declare taxes on your own based on internal records.
If you only have employment income and your employer is enrolled in the Employment Income Automatic Inclusion Scheme (AIS), then you can enjoy the No Filing Service (NFS), a non reporting service. A simple criterion for judgment is that if you have not received a tax declaration notice, you have already been included in the exemption service plan. You only need to wait for the receipt of the tax invoice and pay the corresponding tax when the invoice expires.
In addition, you need to access the IRAS website https://www.iras.gov.sg/ Log in to MyTax Portal using SingPass to check if the information in your assessment notification (NOA) or tax invoice is accurate, and then confirm and reply.
Even if you fall into the following two situations, confirmation is still required.
You had no income in the previous year;
You only have employment income, and your employer has joined the Employment Income Automatic Inclusion Scheme (AIS) and has submitted detailed information about your employment income to IRAS.
For self-employed individuals or tax residents with additional income (such as rental income), they must log in to the IRAS website to declare their additional income.
4. How to file taxes
Personal income tax in Singapore can be declared through paper filing or electronic filing via the internet. The form application needs to be submitted before April 15th; Electronic declaration needs to be completed before April 18th.
Declaration of personal income tax through the internet can be accessed on the website of the Singapore Inland Revenue Department http://www.mytax.iras.gov.sg Fill in and submit the application materials online.
Note: In order to prevent others from stealing personal information, the website adopts Singpass dual authentication. You must enter two passwords: a fixed password set by yourself and a one-time password generated through a password generator.
How to pay taxes
After completing the declaration, taxpayers will receive a Notice of Assessment (NOA) from IRAS between April and September.
Once you receive the NOA, you should carefully check it. If there are any errors, you can raise an objection to IRAS within 30 days from the date of the NOA display. If there are no objections, taxpayers need to pay the relevant taxes within one month of receiving the NOA, otherwise they will face fines.
You can choose any of the following payment methods to pay taxes:
1 SAM machine
2 AXS machines or AXS APP
3 ATM(POSB/DBS，OCBC)
4 Check/GIRO/Online Transfer
Note: It is recommended to activate GIRO and make monthly installment payments with zero interest to reduce the pressure of one-time payments and avoid fines for forgetting to pay taxes.
Six tax reduction and exemption projects
In recent years, the Singapore Inland Revenue Authority has proposed the Auto inclusion Scheme (AIS) for Employment Income. If the company has participated in the AIS program (Auto Inclusion Scheme), it no longer needs to distribute tax forms such as IR8A/IR8S to employees using traditional tax reporting methods. Before March 1st each year, employers only need to submit their employees' income information in electronic format to the Singapore Inland Revenue Department.
Starting from the 2021 fiscal year, employers with 6 or more employees must participate in AIS.
If your company has not yet participated in the AIS program (Auto Inclusion Scheme), you can contact us and our professional team will be dedicated to serving you!
Through declaration, taxpayers can be assisted in assessing tax relief and tax rebates, reducing their burden, including having children, pursuing diplomas, living with parents, and hiring maids. Specifically, it includes:
（1） Tax saving scope one: having children
Qualified Child Relief (QCR): It is jointly agreed upon by both parents or exclusively enjoyed by one of them, with a deduction of 4000 yuan per child; If it is a disabled child, the tax deduction is 7500 yuan.
Working Mother's Child Relief (WMCR): Only working mothers can apply for it. The first child's tax deduction is 15% of their income, the second child's is 20% of their income, and from the third child onwards, it is 25%. The deduction percentage can be accumulated, and the total amount of this tax deduction is limited to 100% of the income of working mothers.
Grandparent Caregiver Relief (GCR): Working mothers who entrust their children aged 12 or younger to their own or their husband's parents or grandparents for care can apply for a maximum rebate of 3000 yuan.
4. Parental Tax Rebate (PTR): It is deducted from the actual taxes that taxpayers need to pay, and if it is not used up, it can be withheld later. The first child can receive a rebate of 5000 yuan, the second child can receive 10000 yuan, and from the third child onwards, the rebate is 20000 yuan.
Foreign Maid Levy Relief: Married female taxpayers can enjoy a deduction of double the maid tax paid by the female taxpayer or her husband for the maid last year. Even without children, one can enjoy the maid tax deduction.
（2） Tax saving scope 2: Taking care of close relatives
If a taxpayer supported their own or their spouse's parents or grandparents who lived locally last year, they can enjoy Parent Relief, provided that the elder is at least 55 years old or disabled (physically or mentally disabled) and their income does not exceed 4000 yuan.
If living with parents, the deduction amount is 9000 yuan; If you do not live with your parents, the deduction amount is 5500 yuan. If the parents are disabled and live with the taxpayer, the deduction amount is 14000 yuan, and if they live separately, it is 10000 yuan. The tax deduction that taxpayers can obtain is limited to two individuals.
Except for parents, taxpayers who support their spouse whose income was less than 4000 yuan last year can enjoy a spouse relief of 2000 yuan. If the spouse is disabled, the deduction amount is 5500 yuan.
4 If a taxpayer supported his or her spouse's disabled brother or sister or lived with them last year, each of them can get 5500 yuan of Handicapped Brother/Sister Relief.
5 In addition, taxpayers who made up provident fund account deposits for their spouses, brothers and sisters, parents and grandparents of themselves or their spouses last year can enjoy a deduction of up to 7000 yuan as long as they do not reach their full deposit sum, which will be automatically reflected in the tax return.
（3） Tax saving scope three: continuing education courses and work expenses
Course Fees Relief: For example, if a taxpayer attended a certain course or seminar last year and obtained a qualified education or work qualification certification, they can apply for some work expenses, such as expenses for socializing with clients. If they do not receive compensation from the employer, they can fill in and deduct them from their taxable income when filing taxes, provided that receipts and records are kept for inspection.
（4） Tax saving Scope Four: Retirement Planning and Life Insurance
Taxpayers who deposited cash into the Supplementary Retirement Scheme (SRS) last year are entitled to the same tax deductions as the deposited funds. Deposit a maximum of 15300 yuan per year.
If the taxpayer paid less than 5000 yuan in housing provident fund last year, they can apply to deduct the life insurance premiums paid by themselves or their spouse last year. The specific deduction amount depends on the difference between the provident fund payment amount and 5000 yuan, as well as 7% of the insured amount or the premium paid, whichever is lower.
（5） Tax saving scope five: Donations or donated items
Donations to public welfare organizations approved by the authorities can enjoy a deduction equivalent to 2.5 times the donation amount. Public welfare institutions will record the taxpayer's ID card number and other information, and directly notify the tax bureau, and the relevant deductions will also be automatically reflected in the tax return.
In addition to cash donations, donations of stocks, cultural relics, artworks, and real estate can also enjoy tax deductions, as long as the relevant authorities value these items.
