Objectives & Agenda :
To understand basics of income tax like what is taxable/ non taxable income, residential status, Personal Income tax rates etc. The webinar shall dwell upon other aspects like threshold limit for filing Personal Income tax returns, consequence of not filing/ late filing of returns due dates for filing return and various deductions/reliefs available to individuals. Further it would also provide insights on taxation of overseas income in Singapore.
Business Model Canvas (BMC)- A new venture concept
Taxation of individuals in singapore
1. Taxation of Individuals in Singapore
Dr. CA. Nabeel Ahmed B.com, ACA, CMA, AICWA, AIA, MBA, Ph.D
DVS Advisors LLP
India-Singapore-London-Dubai-Malaysia-Africa
www.dvsca.com
2. Presentation Schema
Taxable and
Non Taxable
Income
Residential
Status
Personal Tax
Rates
Filing personal
Income Tax
Returns
Consequence
of late filing/
non filing
Deduction for
individuals
Taxation of
overseas
income
3. Taxable and Non Taxable Income
When Income is
taxable? And what is
not ?
TAXED: All income earned
in or derived from
Singapore is chargeable to
income tax.
NOT TAXED: Overseas
Income & Capital Gains
Income from Property or Investments
Income from Trade, Business, Profession or Vocation
Employment : Salary, Bonus, Director's Fee, Commission and
Others, Gains from the Exercise of Stock Options, Income Received from
Overseas, Pension, Retrenchment and Retirement Benefits
Income earned may come from different sources
such as:
4. Residential Status
Resident of
Singapore if
Singapore Citizen or
Singapore Permanent Resident
Except for temporary absence
Foreigners who stayed/ worked
in Singapore for 183 days or
more in the previous year
Otherwise individual will be treated as
non resident of Singapore for tax
purposes.
5. Personal Tax rates : RESIDENTS
Chargeable Income Income Tax Rate (%) Gross Tax Payable ($)
First $20,000 0 0
Next $10,000 2 200
First $30,000 - 200
Next $10,000 3.5 350
First $40,000 - 550
Next $40,000 7 2,800
First $80,000 - 3,350
Next $40,000 11.5 4,600
First $120,000 - 7,950
Next $40,000 15 6,000
First $160,000 - 13,950
Next $40,000 18 7,200
First $200,000 - 21,150
Next $40,000 19 7,600
First $240,000 - 28,750
Next $40,000 19.5 7,800
First $280,000 - 36,550
Next $40,000 20 8,000
First $320,000 -
In excess of $320,000 22
44,550
Singapore's personal income tax rates for
resident taxpayers are progressive.
For YA 2019, a Personal Tax Rebate of 50%
of tax payable, up to maximum of $200 is
granted to tax residents.
Resident Tax rates
6. Personal Tax for Singapore Non Resident
<60 Days
Employment income is exempt from
Tax if employment is less than 60 days
in a year.
61 – 182 Days
If the employment is between 61 to
182 days, employment income will be
taxed at 15% or progressive resident
tax rates, which ever is higher.
Non Resident Director fees and
remuneration, consultant fees and
all other incomes are taxed at 22%
7. Filing Personal Income tax return
Every eligible tax
payer’s yearly
obligation
Income more than
S$22,000
Income less than
S$22,000
File when informed
by income tax
authority or else
not mandatory
Mandatory to file
income tax return
e-filing
Paper filing
18th April
15th April
DueDates
8. Steps :
For tax resident
Individual
For Non
resident
individual
For Self
employed
Form
B1
Form
M
Form
B
Filing of Income tax return
by 15th or 18th April
Receipt of Notice of
Assessment (NOA) or tax bill
Received
within May
to
September
Would
indicate tax
payable
Pay tax
amount
within 30
days
In case of disagreement inform authorities within
30 days along with reasons
1
2
Forms :
9. Consequence for late/ non filing of tax returns
Impose a late filing fee
not exceeding S$1000
Issue estimated notice
of assessment
Summon to court
• File the returns
immediately.
• Pay late filing before
due date in letter to
avoid summon to
court
• It may be based on past
year’s income and
information available
with IRAS.
Upon receipt of letter notifying
late fees Summons may be issued if IRAS does
not receive
• Required income tax return and or
• Payment of late filing fee by the
due date.
10. How is Taxable Income & Net Taxes Computed?
• The Inland Revenue Authority of Singapore (IRAS) provides the formula in determining the taxable income of
an individual.
Total Income Less Expense = Statutory Income
Statutory Income Less Donations = Assessable Income
Assessable Income Less Personal Reliefs = Taxable Income
Taxable Income @ Respective tax rates = Tax Payable
Tax Payable – Tax Rebates = Net Tax Payable
11. Deductions for individuals (Reliefs, Expenses etc.)
Deduction for
Employees
Claim tax deduction on
employment expenses “
wholly and exclusively”
incurred in earning income
Deduction for
rental income
• Expense solely for the
purpose of rental income.
• Expenses incurred during
the period of tenancy
Examples: Interest paid on
loan on property that is let
out.
Property tax incurred during
rental period
Example: Travel Expenses,
Subscription for professional
updates
Personal income
tax relief cap
From year of assessment
(YA), the total amount of
personal income tax reliefs
can be allowed subject to a
relief cap of S$80,000 per
YA.
12. Taxation of overseas income
Generally, overseas income received in Singapore on or after 1 Jan 2004 is not taxable and need not be
declared. This includes overseas income paid into a Singapore bank account.
Overseas Income is taxable in Singapore if
It is received through
partnerships in
Singapore
Trade/ Business
overseas is incidental to
Singapore Trade.
Employed overseas on
behalf of the Singapore
Government
Overseas employment is
incidental to Singapore
employment
If an income is taxable both in Overseas and Singapore, then one shall
apply for double taxation relief to avoid double taxation.
13. Parenthood Tax Rebate Scheme
The Parenthood Tax Rebate (PTR) is given to tax residents to encourage them to have more children.
To qualify, you must be a Singapore tax resident who is married, divorced or widowed in the relevant year.
