Class Assignment 1- Summit on 8 September

Traditional employment compensation: Research the basic rules on

taxes places upon salaries, overtime, and benefits-in-kind by making
comparisons between Singapore and your own country.

Singapore Personal Income Tax Guide

Personal income tax in Singapore is based on a progressive structure.
Find out what which income types are taxable and which are not.
And if you are a non-resident in Singapore, how does the Singapore
personal income tax apply to you.

Personal income tax rate in Singapore is one of the lowest in the world.

In order to determine the Singapore income tax liability of an

individual, you need to first determine the tax residency and amount of
chargeable income and then apply the progressive resident tax rate to
it.

Key points of Singapore income tax for individuals include:

Singapore follows a progressive resident tax rate starting at 0% and

ending at 22% above S$320,000.
There is no capital gain or inheritance tax.
Individuals are taxed only on the income earned in Singapore.
The income earned by individuals while working overseas is not subject
to taxation barring a few exceptions.
Tax rules differ based on the tax residency of the individual.
Tax filing due date for individuals is April 15 of each year. Income tax is
assessed based on a preceding year basis.

Personal Income tax rates X

Filing of personal tax return for tax resident is mandatory if your annual
income is S$22,000 or more. x
Tax residents do not need to pay tax if your annual income is less than
S$22,000. x
Different income tax rules apply in Singapore depending on the tax
residency status of the individual.

Personal tax for Singapore non-residents X

You are considered a non-resident for tax purpose if you are a foreigner
who stayed or worked in Singapore for less than 183 days in the tax
year. As a non-resident, you will be taxed as below:
Your employment income is exempted from tax if you are here on
short-term employment for 60 days or less in a year. This exemption
does not apply if you are a director of a company, a public entertainer
or exercising a profession in Singapore. Professionals include foreign
experts, foreign speakers, queen’s counsels, consultants, trainers,
coaches etc.

If you are in Singapore for 61-182 days in a year, you will be taxed on all
income earned in Singapore. You may claim expenses and donations to
save tax. However, you are not eligible to claim personal reliefs. Your
employment income is taxed at 15% or the progressive resident tax
rate (see rate table above), whichever gives rise to a higher tax amount.

Director fees and remuneration, consultant fees and all other incomes
are taxed at a range of 15% to 22%.

Filing personal income tax returns

Filing your tax return is a yearly obligation for every eligible taxpayer.
All completed forms must be submitted to Singapore tax authority by
the 15th of April.

You do not need to pay tax if your annual income (applicable for tax
residents only) is less than S$22,000. However, you may still need to file
returns if you have been informed by tax authority to submit your tax
form.
Even if you do not have any income in previous years, you still need to
declare zero income in your tax form and submit by 15 April (paper) or
18 April (e-filing). It is compulsory for you to file tax returns if your
annual income is S$22,000 or more.

You will be subject to penalties for late filing or not filing. IRAS might
also take legal actions against the individual for non-filing of tax return
or non-payment of the tax.

After you have filed your returns, you will receive your Notice of
Assessment or tax bill in May to September. The tax bill will indicate the
amount of tax you have to pay. If you disagree with your tax amount,
you need to inform the Singapore tax authority within 30 days from the
date of your tax bill and state your reasons for objection.

You need to pay the full amount of tax within 30 days of receiving your
Notice of Assessment. This is regardless of whether you have informed
tax authority about your objection. If your tax remains outstanding
after 30 days, penalties will be imposed.

Tax treatment of income earned overseas

Generally, overseas income received in Singapore on or after 1 Jan 2004
is not taxable. This includes overseas income paid into a Singapore bank
account. You do not need to declare overseas income that is not
taxable.
There are certain circumstances, however, in which overseas income is
taxable:
It is received in Singapore through partnerships in Singapore.
Your overseas employment is incidental to your Singapore
employment. That is, as part of your work here, you need to travel
overseas.
You are employed outside of Singapore on behalf of the Singapore
Government.
You need to declare the qualified taxable overseas income under
’employment income’ and ‘other income’ (whichever applicable) in
your tax form.