Singapore Tax Rate and Incentives for Personal Tax and Corporate Tax in 2019
Singapore provides its residents with the privilege of one of the lowest tax rates in the world. Be it personal income tax or the corporate duty, people in the city-state pay a lot less than civilians in other nations. Today, we talk about everything you need to know the Singapore tax rate.
First, Who Coordinates Taxation in Singapore?
The Inland Revenue Authority of Singapore (IRAS) authorizes taxation and looks after it. You will need to pay your taxes by filing with the authority.
Types of Taxes in Singapore
In the most general terms, there are two types of taxes in Singapore. One is the personal income tax, and the other is the corporate tax. As their name suggests, an individual is liable for the former, and the latter is for a business company operating in the island nation.
Personal Income Tax
Anyone earning any profit in Singapore is liable for personal taxes. This includes business, salary, or other means. However, remember that you will be responsible for this tax only if you are making an annual income of more than $22,000.
There are two types of taxpayers in Singapore, resident and non-resident taxpayers. How much an individual pays depends on their designation- which one of these payers he or she is.
Singapore citizens, permanent residents or foreigners residing in Singapore for more than 183 days are taken as resident taxpayers. The Singapore tax rate for personal tax ranges from 2% to 22%.
Other payers who are not residents are on the category of non-resident taxpayers. Employment income of a non-resident is taxed at 15% or progressive tax resident rates, whichever results in a higher tax amount. Director’s fees and other income are taxed at the prevailing rate of 22%.
As you can see, the tax percentage heavily depends on how much a person makes in a year. You can click on this link for the complete personal income tax rate in Singapore.
This one is what many people are frequently asking about. Singapore based companies need to do this tax for the profit they generate in the city-state and also other countries if the money is later remitted to the state.
The corporate tax rate in Singapore is a flat 17%. However, there are several tax exemption schemes which decrease the final amount. This includes the tax exemption scheme for new start-up companies, partial tax exemption for companies, and one-off corporate tax rebate. New companies will only need to pay 4.25% for the first $100,000 and 8.5% for the next $100,000 profit they make.
Remember that each of these schemes has requirements that companies need to fulfill to become eligible.
To make it easy for you to study and assess the rates and incentives, we have dedicated a separate article exclusively for corporate tax Singapore.
Personal Tax Incentives
Similar to the corporate tax, personal tax in Singapore also comes with a lot of reliefs and rebates. These refunds are for honoring the contributions that the public citizens have made for the economy with their hard-earned profit.
Depending on the taxpayer and their credibility, Singaporeans can apply for several tax exemption programs. Here is a list of the tax schemes currently in effect in Singapore:
- The Earned Income Relief
- Spousal Relief
- Handicapped Spouse Relief
- Qualifying Child Relief (QCR)
- Handicapped Child Relief (HCR)
- Working Mother’s Child Relief (WMCR)
- Qualifying Singaporean Child
- Parental Relief
- Handicapped Parent and Sibling Relief
- Grandparent Caregiver Relief
- Relief for Approved Pension/Provident Fund Contribution & Life Insurance Premium
- Relief for CPF Contribution by Self-Employed Persons
- Relief for Cash Top-Up of Own SPF Special/Retirement Account
- Relief for Voluntary Contribution Directed Specifically to Own CPF Medisave Account
- Relief for Supplementary Retirement Scheme (SRS) Contributions
- Course Fees Relief
- Foreign Maid Levy Relief
- NSmen Relief
- Parenthood Tax Rebate (PTR)
All of these schemes have specific requirements to fulfill. You can get a comprehensive look at them on our article dedicated to personal tax schemes.