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Singapore: Wealth Management

The Tax System and Wealth

This page was last updated on 30 April 2021.

All individuals pay tax on income earned or received in Singapore; however overseas income received in Singapore after January 1, 2004, including income paid into a Singapore bank account (but excluding overseas income received through a partnership in Singapore), is not taxable.

Income tax is assessed based on a preceding year basis.

Tax Rates in 2010

Individual

The income tax rates for resident individuals are as follows:


Chargeable Income (SG$)

Rate (%)

Tax Payable (SG$)

First 20,000

0

0

20,000-30,000

2

200

30,000- 40,000

3.5

350

40,000-80,000

7

2,800

80,000-120,000

11.5

4,600

120,000-160,000

15

6,000

160,000-200,000

18

7,200

200,000-240,000

19

7,600

240,000-280,000

19.5

7,800

280,000-320,000

20

8,000

320,000+

22

-

The income tax rate for non-residents’ employment income is either 15% or the relevant resident tax rate, whichever produces the highest sum. Director's fees, consultation fees and most other income are taxed at 20%, which is generally withheld at source. Certain other payments to non-resident individuals are subject to withholding tax at source.
The majority of dividend payments received are exempt from income tax.

Corporate

The normal rate of corporation tax, known locally as profits tax, is 17%.
Capital Gains

Generally, capital gains realised from the sale of property in Singapore, or derived from buying and selling shares or other financial instruments, are not subject to tax. If, however, such sale of property or buying and selling of shares and other financial instruments are regarded as a trade, the gain may be regarded as taxable income.

Indirect Taxes

Companies must register for goods and services tax (GST) if their turnover for the previous 12 months exceeds SG$1m, or if the business reasonably expects its turnover will exceed SG$1m over the following 12 months. Voluntary registration is permitted, for example where the company intends to make taxable supplies, only supplies goods outside Singapore, or makes exempt supplies of financial services that are also deemed to be international services. A foreign company registering for GST must appoint a Singapore agent to act on its behalf on all its GST matters, including the accounting and payment of GST.

The standard rate of GST is 7%, and applies to most sales of goods and services made in Singapore. Exports and related international services are zero-rated. Financial services and the sale or lease of residential properties are exempt from GST.

Real Estate Taxes

Property tax is charged on immovable property, including a house, building and land. The amount of tax due is calculated based on a percentage (tax rate) of the annual value of a property. The tax rate is 10%, or 4% where the property is granted an owner-occupier concession.

From 1 January 2011, the 4% tax rate will be replaced by a three-tier tax rate based on the annual value, as follows:


Annual value

Tax rate

First SG$6,000

0%

Next SG$59,000

4%

Above SG$65,000

6%

Other Taxes.
Stamp duty is payable on certain executed documents relating to properties and shares, or interest in properties and shares. Such documents include a lease, sale, purchase, gift or mortgage of property. Liability arises once the document is executed, even if the transaction itself has been aborted.

The amount of duty payable varies according to the transaction. For example, in the case of a mortgage, the duty is SG$4 for every SG$1,000 or part thereof, subject to a maximum duty payable of SG$500..

Withholding Taxes

There are no domestic withholding taxes on dividends, interest or royalties.

Evidently this is a tax regime which is conducive to the accumulation of wealth. The number of rich people and their wealth is reportedly growing at more than 30% annually in Singapore, double the global average.

 

 

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