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Investment Taxation for Expats in Singapore

Submitted: February 2014

Taxable income in this category includes:

  • interest from bank and building society deposits
  • interest from government and corporate stocks (bonds)
  • rental income from properties both in Singapore and abroad
  • dividends, and
  • capital gains.

Interest

Interest income from Asian dollar bonds and certain approved bank deposits is tax exempt.

For residents, interest income from Singaporean sources is treated as ordinary income and taxed at the applicable marginal rate. It must be reported on your tax return. As a resident, you will not have to pay income tax on interest received from outside Singapore, but you may be subject to withholding taxes in the country of origin. If there is a suitable tax treaty, the withholding tax rate can be reduced to between 5% and 10%.

For non-residenttaxpayers who have spent 60 days of less in Singapore in a year, Singapore-source interest income is exempt from tax. If you have stayed more 61-182 days in Singapore in a year, interest income from Singaporean sources is treated as ordinary income, and taxed at either 15%, or the applicable marginal rate, whichever is higher. It must be reported on your tax return. Once you have stayed in Singapore for longer than 183 days in a 12 month period, you will be considered resident, and have to pay income tax in the same way as a resident (see above).

Rental income

For both residents and non-residents, rental income from property in Singapore is taxed as ordinary income and must be reported with your tax return. Certain rental expenses can be deducted in order to calculate taxable income, these include:

  • property tax
  • mortgage interest
  • fire insurance
  • repairs
  • maintenance, and
  • certain fees and commissions payable.

In addition if you own a rental property in Singapore, you will be liable for an annual property tax, which is calculated on the Annual Value (AV) of the property. The AV is the estimated annual rent of your property, which may be higher or lower than the actual rent charged, as it is based on an analysis of similar properties. The rate of tax varies from 0% for an AV of S$8,000 or less to 15% for an AV in excess of S$130,000. There is more information on property tax here.

Dividends

For residents and non-residents, dividend income from Singapore companies is exempt from taxation.

For non-resident taxpayers, dividend income from Singapore companies is not subject to withholding tax.

Capital gains

For residents and non-residents, there is generally no capital gains tax. The exception to this is where a capital gain is regarded as income as a result of trading of business, in which case it is subject to income tax. For non-residents who trade in real property a withholding tax of 15% may be imposed on the gross proceeds of a sale.

 

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