Withholding tax in Singapore: What businesses need to know

Singapore withholding tax applies to certain payments made to non-resident individuals or companies. If you’re making a payment which attracts withholding tax you’ll need to withhold a portion of the payment, which must be passed to IRAS. Withholding tax rates in Singapore are variable depending on the payment type.

This guide looks at all the basics on the Singapore withholding tax, the rates and when it applies.

We'll cover:

What is Singapore withholding tax?

Singapore withholding tax applies to certain payments made to non-resident individuals and companies¹. It’s intended to ensure that non-resident individuals and entities still pay tax on income generated in Singapore, as a resident would through income tax or corporate tax.

Singapore withholding tax can be a complex topic. This guide is for information only and does not constitute advice. If you’re unsure about whether tax applies to your payment, get professional advice as soon as possible.

What kinds of payments are subject to withholding tax?

Singapore withholding taxes vary depending on the specific situation and the nature of a given payment. We’ve summarised most of the key occasions on which withholding tax must be applied at the time of research. There are a few other - less common - scenarios where you’ll need to withhold tax, such as if you charter an aircraft².

Here’s a summary of the most common payments which attract withholding tax in Singapore:

• Interest, commissions, fees or other payments in connection with any loan or indebtedness
• Royalties or other lump sum payments for the use of movable properties
• Payments for the use of or the right to use scientific, technical, industrial or commercial knowledge or information
• Rent or other payments for the use of movable properties
• Technical assistance and service fees, and management fees
• Proceeds from sale of any real property by a non-resident property trade
• Distribution of taxable income made by a Real Estate Investment Trust (REIT)
• Payment to non-resident director
• Payment to non-resident professional
• Payment to non-resident public entertainer

If you’re not sure of whether withholding tax needs to be applied - or the relevant rate do get professional advice to make sure you stay on the right side of the law.

Types of payments that do not attract withholding tax

The most common types of payments which do not attract IRAS withholding tax in Singapore include the following³:

• Dividend payments
• Payments for satellite capacity and international submarine capacity
• Payments made to Singapore branches of non-resident companies
• Payments made by banks, finance companies and certain approved entities
• Payments for the charter of ships or for carriage of goods by sea
• Payments on interbank/inter branch transactions

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Singapore withholding tax rates

The following types of payment are subject to withholding tax, at these rates, when paid to non-resident companies⁴:

*Correct at time of research - 12th November 2024

The following types of payment are subject to withholding tax when paid to non-resident individuals:

Singapore withholding tax exemptions

Singapore may offer certain withholding tax exemptions which tend to apply either if there’s a relevant double taxation agreement in place, or if there’s a specific reason to make payments exempt to suit national policy.

For example, the exemption listed above, on some payments made by banks, is intended to boost lending and secure Singapore’s place as a regional funding centre.

These exemptions do change over time and will be regularly reviewed, so keep an eye out on developments in this area.

How to file withholding tax

As with most Singapore tax, you can file your withholding tax information online and make a digital payment to cover the costs. Here’s an outline of how to file withholding tax with IRAS⁵:

1. Get authorised on Corppass for submitting withholding tax information
2. Log into IRAS⁶ securely and enter the details of the withholding tax you need to pay
3. Review the acknowledgement to make sure all the details are correct
4. Make your payment digitally following prompts
5. View and download S45 notices and letters to confirm payment

Penalties for Late Payment or Non-Payment

You must pass withholding tax payments to IRAS by the 15th of the second month from the date the payment was made to a non-resident individual or entity. If you fail to meet this deadline you’re guilty of an offence and will be subject to penalties which can include a charge of 3 times the withheld tax, a fine of up to 10,000 SGD or even jail time.

Conclusion

Withholding tax in Singapore is very important for any international business engaging in transactions involving Singapore. You’ll need to be very clear of the Singapore withholding tax rules and rates to make sure you stay compliant and to avoid penalties, fines and legal action.

If you’re making payments to non-resident individuals and businesses from Singapore you need a good way to manage your company finances without high or unexpected fees for currency conversion. Check out Wise Business which can help you streamline international payments and cut the costs of transacting overseas.

Wise currency exchange uses the mid-market rate with no exchange rate markup and transparent fees, which makes it far easier to see the real costs of sending money abroad, and can also help you cut the charges associated with international business management.

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