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Employment Taxation for Expats in Singapore

Submitted: February 2014

Residence

The most important test for residency in Singapore is the number of days you stay in the country.  Once you have stayed in Singapore for longer than 183 days in a 12 month period, you will be considered resident. As a resident you will be taxable on your Singapore source income. Generally if an expat resides in Singapore for three consecutive years, they will be regarded as resident for that period, even if the only year in which they spent 183 or more days in the country was the middle year of the three. Also if an expat stays in Singapore for a continuous period of 183 days or more which straddles two tax years, they will be considered tax resident for both years.

As a non-resident you will also only be taxed on Singapore-sourced income. However if you receive income from a Singapore source during a stay of less than 60 days, you may not be liable for Singapore tax.

If you work in Singapore for an overseas employer with a representative office in Singapore, but also travel to other countries on business, it may be possible to achieve area representative status. This means that tax will only be payable on the basis of how many days in the year you were present in Singapore. There is also a Not Ordinarily Resident (NOR) scheme which has similar advantages. This can only apply once you have been tax resident for the three years prior to making the application. There is further information on the NOR scheme here.

 

Tax rates and allowances

The tax year runs from 1 January to 31 December. Income tax is charged on a previous year basis, so the income for any given year (the basis year) is assessed for tax in the following year which is known as the year of assessment (YA).The tax rates for resident individuals for YA 2013 are shown below.

Taxable income   Rate Gross tax payable
On the first S$20,000 0% S$0
On the next S$10,000 2% S$200
On the first S$30,000   S$200
On the next S$10,000 3.5% S$350
On the first S$40,000   S$550
On the next S$40,000 7% S$2,800
On the first S$80,000   S$3,350
On the next S$40,000 11.5% S$4,600
On the first S$120,000   S$7,950
On the next S$40,000 15% S$6,800
On the first S$160,000   S$13,950
On the next S$40,000 17% S$6,800
On the first S$200,000   S$20,750
On the next S$120,000 18% S$21,600
On the first S$320,000   S$42,350
Above S$320,000 20%  

To calculate your final tax liability, you must also deduct a rebate from the amount of tax payable according to the tables above. The rebate for YA 2013 30% for individuals under 60 years old, and 50% for those aged over 60. This is subject to a maximum rebate of S$1,500.

For non-residents the tax rate is either a flat 15%, or the resident rate (above), whichever is higher.

There is no Pay As You Earn system in Singapore. Resident and non-resident individuals are required to file a tax return by 15 April. The IRAS will then issue an assessment based on the information in the return. All of the tax payable must be paid within one month of the notice of assessment. You can set up monthly instalments system to pay tax as you earn the income, rather than wait until the middle of the following year to pay it all in one lump sum. The instalments can be deducted directly from you salary.

 

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