For any company operating or looking to set up business in Singapore, compliance with tax regulations is critical. A single missed withholding tax filing in Singapore can trigger immediate penalties and interest, even if the tax amount itself is small. For many businesses, Singapore’s withholding tax rules can feel technical, confusing, and easy to overlook, especially when dealing with overseas vendors or consultants.
If you are unsure whether a payment triggers withholding tax, what rate applies, or how to file correctly with IRAS, you are not alone. IRAS requires that filings and payments be made by the 15th of the second month after payment, with late submissions incurring a 5% penalty plus 1% monthly interest.
This guide breaks down Withholding Tax Singapore, helping businesses understand which payments are taxable, apply the correct rates, and remain fully compliant with confidence.
What is Withholding Tax in Singapore?
As defined by IRAS, withholding tax in Singapore is a tax deducted at source. A person who makes a payment of a specified nature to a non-resident company/individual must withhold a certain percentage of the payment and pay the amount withheld as WHT. It mainly applies when money leaves Singapore or goes to someone overseas. For example, if a Singaporean company hires an agency overseas, the consultant fee is SGD 10,000, and the withholding tax rate is 15%. The Singaporean company will pay SGD 8,500 to the agency and SGD 1,500 to IRAS. The agency will receive less, as tax is withheld first.
- It applies only to a non-resident.
- Who has sourced an income from Singapore?
- It is called withholding tax because it is levied on the payer, not the recipient.
- The amount is withheld from the recipient.
Singapore’s withholding tax regime reflects a balancing act. On the one hand, the government maintains a low and competitive tax environment to attract global investment. On the other hand, it safeguards tax revenues by ensuring that income connected to Singapore is not taxed merely because the recipient is based abroad.
Who is Required to Pay Withholding Tax in Singapore?
In Singapore, any individual, company, or entity that makes prescribed payments to a non-resident company or individual is legally required to withhold tax at source and remit it to the Inland Revenue Authority of Singapore.
Key aspects of Withholding Tax Singapore:
Who is the payer?
Any individual, partnership, or company operating in Singapore. In Singapore’s withholding tax framework, the payer is the person or entity in Singapore that makes a specified payment to a non-resident and is therefore legally responsible for deducting and remitting the tax to the Inland Revenue Authority of Singapore. Put simply, the payer is the Singapore-based party that is making the payment.
Eligible Non-Resident Payee
Singapore withholding tax applies only when the recipient is a non-resident. According to the Inland Revenue Authority of Singapore, the following are considered non-residents for the purpose of WTH:
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- Non-resident Company
A company’s tax residence is determined by the place where the business is controlled and managed. If the control and management are not in Singapore, it is considered a non-resident company. It includes other factors that IRAS considers when determining tax residency, such as whether any board meetings are held in Singapore.
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- Non-resident Individual
Any individual who resided for less than 183 days is considered a non-resident.
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- Non-resident Individual
Any individual who exercises a profession or vocation in Singapore for less than 183 days in a calendar year. It includes consultants, foreign speakers, foreign experts, King’s Counsels, etc.
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- Non-resident Public Entertainer
A public entertainer is a non-resident if they are in Singapore for less than 183 days. Public entertainers include artists and athletes. A public entertainer in Singapore can be exercising a profession, vocation, or employment.
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- Non-resident Director
A member of the Board of Directors of the company who is in Singapore for less than 183 days. The important point to remember is that for a non-resident director who received the payment as an executive director, it will not be subject to Singapore withholding tax.
Types of Payments Subject to Withholding Tax
In Singapore’s cross-border tax regime, withholding tax is not broadly imposed on every outbound payment. It is targeted, technical, and anchored in statute. The categories are defined under the Income Tax Act of Singapore.
The Following Payments Attract a Withholding Tax in Singapore:
1. Interest and Related Payments
Interest paid to a non-resident on loans includes commissions, fees, and other payments related to the loan.
2. Royalties and Intellectual Property Payments
Royalties paid to non-residents for the use of intellectual property in Singapore include payments for patents, trademarks, copyrights, software licenses, and other proprietary rights.
3. Technical Assistance and Service Fees
Fees paid to non-residents for technical assistance, consultancy, or management services may be subject to withholding tax, particularly where the services are performed in Singapore.
4. Rent for Movable Property
Payments to non-residents for the use of movable property in Singapore, such as equipment or machinery, also fall within the withholding tax framework. These payments are treated as Singapore-sourced income where the property is used locally.
5. Directors’ Fees to Non-Residents
Directors’ remuneration paid to non-resident directors is subject to withholding tax at the prevailing rate.
Current Withholding Tax Rates in Singapore
Below is a simplified overview of the prevailing domestic withholding tax rates under the Income Tax Act, as administered by the Inland Revenue Authority of Singapore.
| Type of Payment to Non-Resident | Withholding Tax Rate (Domestic) | Basis of Taxation | Key notes |
|---|---|---|---|
| Interest, commissions, and fees in connection with loans | 15% | Gross | Final tax may be reduced under DTA |
| Royalties (use of intellectual property) | 10% | Gross | Applies to patents, trademarks, copyrights, software, etc. |
| Technical assistance/service fees (services performed in Singapore) | 17% (prevailing corporate tax rate) | Net income | Administrative concession may allow 15% on gross in certain cases |
| Management or consultancy fees (if services are performed in Singapore) | 17% | Net income | Subject to DTA relief where applicable |
| Rent or payments for movable property | 15% | Gross | Includes equipment or machinery used in Singapore |
| Directors’ fees (non-resident directors) | 24% | Gross | Applies regardless of physical presence in Singapore |
Withholding Tax Filing Requirements and Deadlines
Individual taxpayers are required to use SingPass, Singapore’s national digital identity platform, to file withholding tax submissions electronically.
Where the filing is made on behalf of a separate legal entity, such as a company, partnership, or trust, the individual must first obtain the appropriate authorisation through CorpPass before transacting with the Inland Revenue Authority of Singapore.
The following table discusses the filing requirements and deadlines:
| Requirement | Details | Deadline | Important Notes |
|---|---|---|---|
| When to Withhold Tax | Tax must be withheld at the time the payment is made or when the amount is credited to the non-resident’s account, whichever is earlier. | At the point of payment or credit | An obligation arises even if the contract was signed earlier. |
| Filing Withholding Tax Return | File Form IR37 (via IRAS myTax Portal). | By the 15th of the second month from the date of payment | Filing is mandatory even if the tax rate is reduced under a DTA. |
| Payment of Withholding Tax to IRAS | Remit the withheld amount electronically to IRAS. | Same deadline as filing: 15th of the second month from payment date | Late payment attracts penalties and interest. |
| Application of DTA Relief | Apply the relevant treaty rate when filing, if conditions are met. | At the time of filing | Supporting documents may be required. |
| Late Filing Penalty | Penalty may be imposed for failure to file or pay on time. | Immediately upon default | IRAS may impose a 5% late payment penalty plus an additional 1% per month (capped), subject to prevailing rules. |
| Record Keeping | Maintain supporting documents, contracts, invoices, and proof of residency status. | At least 5 years | Required for audit and compliance review. |
How to File Withholding Tax with IRAS?
To file Withholding Tax (WHT) with the Inland Revenue Authority of Singapore, log in to the myTax Portal using CorpPass or SingPass, select “S45 File Return” to submit the required details, and ensure payment is made by the 15th of the second month following payment to the non-resident. Businesses with only a few transactions may use S45 Online, while those handling multiple records can prepare submissions through the S45 Offline Data-Entry (ODE) application.
Steps to File Withholding Tax (S45) with IRAS:
Step1: Authorise Users
If filing for the first time or where there has been a change in personnel, ensure the appropriate users are authorised to access the myTax Portal through CorpPass.
Step 2: Access the Portal
Log in to the myTax Portal using your CorpPass or SingPass credentials. Ensure that the correct entity profile is selected before proceeding with the withholding tax filing to avoid submission under the wrong tax reference number.
Step 3: Prepare Filing Details
Compile the required information, including the non-resident’s particulars, the nature of the payment, the date of payment, and the gross amount paid.
Step 4: Submit the Form
Select “S45 – File Return” to complete the online submission, or use the S45 Offline Data-Entry (ODE) application for bulk filings before uploading.
Step 5: View Acknowledgement
Upon successful submission, an electronic acknowledgement page will be generated for record-keeping purposes.
Conclusion
At 3E Accounting Singapore, we understand that Withholding Tax is not merely a filing obligation but a compliance responsibility that directly impacts your business risk and financial planning. From determining whether Singapore withholding tax rules apply to you, calculating the correct rate, filing S45 returns on time, and avoiding withholding tax penalties in Singapore, our team ensures full compliance with IRAS requirements.
With expert guidance and proactive support, 3E Accounting helps businesses manage cross-border payments confidently while staying aligned with Singapore’s regulatory framework.
Stay Compliant with Singapore Withholding Tax
Let our experts handle your withholding tax compliance accurately and on time.
Frequently Asked Questions
Withholding tax is required to be paid (deducted and deposited) by the payer of income, such as employers, banks, or businesses, before transferring funds to the recipient (employee, contractor, or vendor). It is required for specific transactions such as salaries, interest, rent, and professional fees, ensuring that tax is paid to the government.
To avoid or reduce the 30% withholding tax in Singapore, non-resident companies should claim relief under an Avoidance of Double Taxation Agreement (DTA) by submitting a Certificate of Residence (COR) to the Inland Revenue Authority of Singapore (IRAS). For investment income, using Irish-domiciled ETFs instead of US-domiciled ones can reduce dividend tax from 30% to 15% or zero.
Withholding tax in Singapore must be filed and paid to the IRAS by the 15th of the second month from the date of payment to the non-resident. This deadline applies to payments such as interest, royalties, and management fees. Late payments incur a 5% penalty.
Yes, withholding tax (WHT) can be claimed back or refunded if the total amount withheld during a financial year exceeds your actual tax liability. This excess, known as over-withheld tax, is typically reclaimed by filing an Income Tax Return (ITR) and providing evidence of the tax deducted.
Abigail Yu
Author
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.
