Filing taxes in Singapore? Your 2017-2018 expat guide
Ranked the top expat destination for 3 years running by the HSBC Expat Explorer survey, Singapore is attractive for its political stability and vibrant economy. With the presence of many multinational companies, there are excellent job opportunities for both locals and non-residents.
As all income generated in Singapore is subject to tax, you’ll need to know how to file your tax correctly. This article will explain the key points, and help guide you along during your annual tax filing.
(Source 23 December 2017)
Singapore income tax meaning: What is it?
All income earned in or derived from Singapore is taxable by the Inland Revenue Authority of Singapore (IRAS), while income earned from overseas sources after 1 January 2004 is generally exempt from tax. This applies to both residents and non-residents working in Singapore, whether in part or on a full-time basis.
(Source 23 December 2017)
What is the Singapore tax year? When is the deadline for submitting a tax return in Singapore?
The Singapore tax year generally starts from 1st January and ends on 31st December. Below are the more important dates to keep in mind when filing for your Year of Assessment 2017.
| Filing | Date |
|---|---|
| Filing period start | 1 March 2018 |
| Filing period ends (paper filing) | 15 April 2018 |
| Filing period ends (e-filing) | 18 April 2018 |
(Source 23 December 2017)
Do I have to file a tax return in Singapore?
You’ll need to file a tax return if you hold a work pass valid for at least a year, or work in Singapore for more than 60 days in a year. To file a tax return, you may submit it online or by mail.
You can submit it online at the IRAS myTax portal or you can use the return envelope sent to your address if you opt for paper filing. The IRAS will generally send out the necessary documents for paper filing between February to March each year.
If your company is participating in the Auto-Inclusion Scheme (AIS), you may not need to file for tax as IRAS already has your income records. Nevertheless, if you receive a notice to file through an SMS or mail, you’ll need to file for tax.
(Source, source 04 January 2018)
Singapore taxes for residents
You’re deemed a tax resident if you’re a work pass holder, or have worked or stayed in Singapore:
- For at least 183 days in a calendar year
- For at least 183 consecutive days continually over 2 years (excludes company directors, public entertainers and certain professionals)
- For a continuous period of at least 3 years
If you’re a tax resident, you’ll be expected to pay tax on your income earned in Singapore, as well as any foreign income you have brought into Singapore before January 1st 2004. You’ll be taxed at progressive rates on the final amount left after deducting the relevant deductions. Below you can see the tax rates for the Year of Assessment 2017 as shown on the IRAS website:
| Chargeable Income | Income Tax Rate | Gross Tax Payable |
|---|---|---|
| First $20,000 Next $10,000 | 0% 2% | $0 $200 |
| First $30,000 Next $10,000 | - 3.50% | $200 $350 |
| First $40,000 Next $40,000 | - 7% | $550 $2,800 |
| First $80,000 Next $40,000 | - 11.5% | $3,350 $4,600 |
| First $120,000 Next $40,000 | - 15% | $7,950 $6,000 |
| First $160,000 Next $40,000 | - 18% | $13,950 $7,200 |
| First $200,000 Next $40,000 | - 19% | $21,150 $7,600 |
| First $240,000 Next $40,000 | - 19.5% | $28,750 $7,800 |
| First $280,000 Next $40,000 | - 20% | $36,550 $8,000 |
| First $320,000 In excess of $320,000 | - 22% | $44,550 |
(Source 1, Source 2 23 December 2017)
Singapore taxes for non-residents
You’ll be considered a non-resident for tax purposes, if you stay or work in Singapore for less than 183 days per year, in which case you’ll only be taxed on the income you have earned in Singapore. Your income from employment will be taxed at 15%, or at the progressive resident tax rates, depending on whichever amount is greater. Unlike tax residents, you will not be entitled to deductions.
If you’ve worked in Singapore for less than 60 days in the year, you don't need to pay income tax. Note that this applies only to employees who aren’t company directors, public entertainers or certain professionals.
(Source 23 December 2017)
Singapore people living abroad
Singapore residents abroad generally don't need to pay tax on income earned overseas and brought into Singapore. There are however certain conditions where foreign-sourced income is taxable:
- You brought the income into Singapore before the 1st of January 2004
- You receive the income through a partnership in Singapore
- Your overseas employment is part of your Singapore-based job, e.g. a regional sales manager
- You’re working overseas as an employee of the Singapore Government
- You run a business or trade based in Singapore, and your overseas income is related to the work done in Singapore
- You received service income (e.g. from professional or technical consultancy services) from overseas that isn't eligible for tax exemption
(Source 23 December 2017)
Expats living in Singapore
The tax liability of expats is determined not by nationality, but by the tax residency explained earlier. If you’re still required to pay tax in your home country, you may claim relief under an Avoidance of Double Taxation (DTA) treaty if it applies to your circumstances.
(Source 23 December 2017)
Income tax for students in Singapore
While the income tax applies even to those on an academic programme, an annual gross-income of $22,000 or less is exempt from tax. In most cases, a full-time student with a part-time job will fall within this criteria.
Students may also seek relief for fees paid on courses, if:
- The course provider is an approved institution
- The course leads to a professional or vocational qualification
- The course is relevant to your current employment, trade or profession
This does not apply to university or polytechnic students who have not been previously employed, so this tax relief might be more relevant to mid-career upgraders.
(Source 1, Source 2 24 December 2017)
Income tax for self-employed in Singapore
IRAS defines a self-employed person as someone who works for others under a contract for service, rather than a contract of service. You can use these guidelines to decide if you qualify as self-employed:
- Are you financially liable if the terms of the contract aren’t met?
- Are you able to negotiate the terms of the contract and set prices unilaterally?
- Do you have anyone overseeing and supervising you in your work?
- Can you provide the same services to multiple clients at the same time?
- Do you invest in tools and equipment for your trade, and are personally responsible to maintain and repair them?
- Do you contribute to your CPF Medisave account, and are responsible for your own medical and insurance coverage?
You may deduct some allowable business expenses as a self-employed taxpayer.
(Source 1, Source 2, Source 3 24 December 2017)
Double Taxation Agreements in Singapore
Double taxation agreements (DTA) between Singapore and other countries, help to prevent having to pay tax on the same income twice, should you be living and working part-time in another country.
Certain types of income may qualify for a reduction or exemption of tax under a DTA.
Bear in mind that these agreements only apply to tax residents of Singapore and the other country involved.
The following lists the countries which have signed a DTA with Singapore.
- Albania
- Australia
- Austria
- Bahrain
- Bangladesh
- Barbados
- Belarus
- Belgium
- Brunei
- Bulgaria
- Canada
- China
- Cyprus
- Czech Republic
- Denmark
- Ecuador
- Egypt
- Estonia
- Ethiopia
- Fiji
- Finland
- France
- Georgia
- Germany
- Guernsey
- Hungary
- India
- Indonesia
- Ireland
- Isle of Man
- Israel
- Italy
- Japan
- Jersey
- Kazakhstan
- Korea, Republic of
- Kuwait
- Laos
- Latvia
- Libya
- Liechtenstein
- Lithuania
- Luxembourg
- Malaysia
- Malta
- Mauritius
- Mexico
- Mongolia
- Morocco
- Myanmar
- Nederlands
- New Zealand
- Norway
- Oman
- Pakistan
- Panama
- Papua New Guinea
- Philippines
- Poland
- Portugal
- Qatar
- Romania
- Russian Federation
- Rwanda
- San Marino
- Saudi Arabia
- Seychelles
- Slovak Republic
- Slovenia
- South Africa
- Spain
- Sri Lanka
- Sweden
- Switzerland
- Taiwan
- Thailand
- Turkey
- Ukraine
- United Arab Emirates
- United Kingdom
- Uruguay
- Uzbekistan
- Vietnam
(Source 1, Source 2 24 December 2017)
How do I pay taxes in Singapore?
You need to pay your tax after the filing is completed. For income tax, you can choose to pay it off as a one-time payment, or if you sign up for a GIRO plan, you can pay it in 12 interest-free monthly installments.
The easiest way to pay your tax is using an automatic bank payments via GIRO. If you’re a DBS, POSB, OCBC or UOB customer, you can get it set up instantly through internet banking. Alternatively, you can make the payment using one of the following channels:
- Internet banking bill payment
- Phone banking
- AXS machine
- ATM
- SAM kiosk
- Singapore Post Branch (NETS payment only)
To the following IRAS account details:
- Payee: Commissioner of Inland Revenue
- Bank/Account type: DBS Current Account
- Account number: 0010468669
- Bank SWIFT code: DBSSSGSG
- DBS Bank Code: 001
- Reference information: Tax Reference Number or 14 digits Payment Slip Number
As you have already filed your taxes, you don't need any additional documents at this stage to set up payments.
(Source 1, Source 2 23 January 2018)
Paying tax from overseas
Most payment methods require a local bank account to work. If you’re sending money over from an overseas bank account, you can transfer it with your bank. However, bear in mind that if you do, you’ll likely be given an exchange rate with a markup of approximately 4-5%, on top of which you may also be charged a fee.
To save money, consider using Wise. You can use Wise to transfer money straight into a Singapore bank account with the mid-market rate - the same one you’d find on Google. As well as only be charged a small and fair fee, which is always stated upfront.
You can also use a Wise borderless account to seamlessly transfer money between 28 different currencies including the Singapore dollar. You can easily add money onto your borderless account in your home currency, convert it into Singapore dollars and use the debit card to pay locally.
Calculating your personal tax liability may be a complicated and tedious process, especially for non-residents. IRAS has simplified much of the process with the centralised myTax portal, no-filing system, and a host of online payment options. Give yourself a head start and start filing them early for a peace of mind.
Also if you’re sending money into Singapore to pay your taxes, consider using Transferwise to keep your costs down. Especially if you need to pay off other taxes as well, you might end up saving a fair bit on unnecessary administrative fees and charges!
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