Singapore Personal Tax: Must-knows
Personal income tax rates in Singapore are one of the lowest in the world.
To determine the Singapore income tax liability of an individual, first, determine the tax residency and amount of chargeable income, and then apply the progressive tax rate. Key points of Singapore’s income tax for individuals include:
- Singapore follows a progressive tax rate starting at 0 percent and ending at 22 percent (for income above S$320,000).
- There are no capital gains or inheritance taxes.
- 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.
- Income tax is assessed on a preceding year basis.
Kindly take note of the following key dates related to the filing of personal tax.
- Preparation of IR8A by the employer no later than 1st March each year
- The deadline for filing Form B, B1 by the employee is 15 April. If you e-File, you have up to 18 April to do so.
- The deadline for filing Form P by a partnership is 15 April. If you e-File, you have up to 18 April to do so.
Can I Pay My Tax in Instalments?
You can enjoy up to 12 monthly interest-free installments, or opt for a one-time GIRO deduction.
The 12 monthly GIRO installment cycle starts in May and ends in April of the following year. If you apply for GIRO deductions after May, the installment deductions will commence in the month after your application is approved and end in April of the following year.
What Must I Do As An Employer?
As an employer, you must prepare Form IR8A and Appendix 8A, Appendix 8B, or Form IR8S (where applicable) by 1st March each year for all your employees who are employed in Singapore.
|Form IR8A||To be used to declare remuneration of ALL employees.|
|Appendix 8A||To be completed if the employee is provided with benefits-in-kind.|
|Appendix 8B||To be completed if the employee has derived gains or profits either directly or indirectly from the exercise, assignment or release of any share option right or benefit, or right or benefit from other forms of Share Ownership Plans where such right or benefit was obtained because of any office or employment.
To be completed and submitted to Comptroller of Income Tax for employees who are Singaporeans or Singapore Permanent Residents and who have ceased employment or were posted overseas.
|Form IR 8S||To be completed if excess CPF contributions are made by the employer.|
From Year of Assessment (YA) 2016, employers who have 11 or more employees for the entire year or who received the “Notice to File Employment Income of Employees Electronically” must submit their employees’ income information to IRAS electronically.
IRAS encourages all employers to join the Auto-Inclusion Scheme (AIS) for Employment Income. Under this scheme, employers submit their employees’ income information to IRAS electronically. The employment income information will be shown on the employees’ electronic tax returns and be automatically included in their income tax assessments. If you participate in the AIS for Employment Income, you do not need to issue Form IR8A to your employees.
For more information, or learn how to complete necessary forms for your employees, please see the e-Submission of Employment Income.
Please refer to the Quickline for a downloadable copy of the forms (Microsoft Word format).
What Must I Do As An Employee?
As an employee, you must submit your paper-based tax return by 15 April each year. If you e-File, you have up to 18 April to do so.
You may file your tax return using either of the following modes:
- You can e-File via myTax Portal with your SingPass/IRAS PIN. An instant acknowledgment will be sent to you after you have e-Filed successfully.
- Guides/ FAQ on e-Filing
- Please e-File by 18 April using your SingPass/IRAS PIN login.
- IRAS recommends that you obtain a SingPass. A SingPass is a common password for transacting with all Government e-services. You may apply for a SingPass online. You should receive your SingPass within five working days. To find out more about SingPass, please visit SingPass FAQ.
- If you are not eligible for a SingPass, you may apply for an IRAS PIN online. IRAS will send you the IRAS PIN mailer within five working days.
- You will require Form IR8A if your employer is not participating in the Auto-Inclusion Scheme for Employment Income. Employees may check whether your company is in the Auto-Inclusion Scheme and whether your employer has submitted the necessary information at e-Services – Participating Organizations
- Filing using a paper-based tax return:
- If you need to file a tax return, the IRAS will send you the appropriate paper-based tax return in February or March. If you are certain you have to file but do not receive a notification by 15 March, please contact IRAS for assistance.
- Please remember to sign on Page 1 of the paper tax return and send it to IRAS by 15 April.
- Types of paper-based tax returns:
1) Tax resident individuals should receive Form B1
2) Self-employed individuals (maybe a sole-proprietor or a partner in a partnership) should receive Form B
3) Non-resident individuals should receive Form M
What Must I Do As A Partner in a Partnership?
Filing Income Tax
While a partnership does not pay tax, it still has to file an annual income tax return (Form P) to show all income earned and business expenses deducted by the partnership during the year. The partnership is required to file Form P if it has received the paper Form P or an invitation to e-File, even if it has not commenced business in the year.
Form P is usually sent to the precedent partner by mid-March every year for the precedent partner to file on behalf of all the partners. The precedent partner is required to inform all the partners of their share of income from the partnership to enable them to declare it in their Individual income tax returns.
Form P is not available for download from the IRAS website. If you require a copy of Form P, please call the Individual Income Tax Helpline at 1800-356 8300.
See the Explanatory Notes on Form P for more details on how to complete Form P.
You also have to report the four-line statement for the different periods concerned showing clearly the various partners’ allocation of profit and loss, and complete Pages 3 and 4 of Form P for all the partners concerned for each relevant period. If the business revenue is S$500,000 or more, you must also send in the Certified Statement of Accounts for the different periods concerned.
‘Certified’ means signed by you (the partner), indicating that the accounts are true and correct.
‘Statement of Accounts’ comprises the Trading and Profit and Loss Account and the Balance Sheet.
The deadline for filing Form P is 15 April. If you e-File, you have up to 18 April to do so.
Allocation of Profit and Loss to Partners
After IRAS processes Form P, it will send the ‘Allocation of Profit and Loss to Partners’ to the precedent partner.
The precedent partner is obliged to inform the other partner(s) of their share of profit or loss. The share of profit and loss to each partner will be taxed under each partner’s name.
Objection to the Allocation of Profit and Loss to Partners
If you object to the allocation of profit and loss to partners, you must lodge your objection through the precedent partner. The precedent partner must write to IRAS stating clearly the grounds of objection within 30 days from the date of the allocation notice.
If Your Partnership Consists of Non-resident Partners
See details on how Section 45 about withholding tax applies to partnerships.
For a New Partnership
Please fill in the Registration Form for New Partnership. You may download this form or you may call the IRAS Business Income Tax Help-Line at 1800-356 8300 to request the form be sent to your fax number.
IRAS will mail Form P to the precedent partner when IRAS receives your registration form.
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Compliance with Local Laws
Why do you need a Corporate Secretary?
Section 171 of the Singapore Companies Act, Chapter 50 requires ALL Singapore Companies to appoint a Singapore Company Secretary to handle on-going statutory compliance matters.