Corporate income tax in Singapore
Singapore adopts a territorial tax system. Specifically, companies incorporated in this country are only taxed on the following income
Sources of income in Singapore (generated in Singapore)
Sources of foreign income remitted to Singapore
In terms of corporate tax rate, 1997 was 26%, and then it decreased year by year, reaching 17% in 20 10, and the unified tax rate of 17% has been maintained until now. Compared with other countries, Singapore's current tax rate is relatively low and it is one of the most favorable tax systems in the world.
In addition, Singapore's tax system is single-tier. In particular, the company's operating profits only need to pay tax once, and the dividends paid by resident companies to shareholders do not need to pay any tax. Singapore has also abolished the capital gains tax.
Personal income tax in Singapore
Anyone who earns income in Singapore must pay personal income tax in this country. Personal tax may vary from person to person, depending on their residence status.
Personal income tax of Singapore taxpayers
Individuals who meet the following conditions are tax residents of Singapore:
Singapore citizen
Permanent residence in Singapore
Foreigners who have lived in Singapore for not less than 183 days.
Singapore implements a progressive tax rate for taxpayers' personal income tax, ranging from 0% to 22%.
Personal income tax of non-tax residents in Singapore
If a person stays in Singapore for less than 183 days, he is regarded as a non-tax resident and the tax rate is applicable to non-tax residents.
Stay no more than 60 days, and the tax rate is 0%. Except in the following cases:
Directors, non-residential professionals and public entertainers, and
Absence from work in Singapore is part of the job requirements in Singapore.
Stay for 6 1- 182 days, and the tax rate is 15% or progressive tax rate (0%-22%), whichever is higher.
As for directors, non-resident professionals and non-resident entertainers, the tax rate ranges from 15% to 22%. Individuals can also legally use tax relief (relief, tax refund, fees and donations) to reduce the tax payable.
Goods and Services Tax in Singapore
Goods and Services Tax (GST), also known as Value Added Tax (VAT), is a consumption tax levied on imported goods (collected by Singapore Customs) and levied on almost all goods and services provided by Singapore. At present, the rate of goods and services tax is 7%, but it is expected to rise to 9% in the next few years.
Nevertheless, there are still some goods and services that do not need to pay consumption tax, as follows:
goods
1. Supplies with zero tax rate
outward cargo
2. Exempted supplies
Sale and lease of residential property
Invest in the import and local supply of precious metals
3. Supplies outside the scope of consumption tax
Selling goods from overseas to another overseas destination.
Private transaction
Selling goods in free trade zones and zero-tariff warehouses
service
1. Supplies with zero tax rate
International services (according to Article 2 1(3) of the Goods and Services Tax Act)
2. Exempted supplies
Financial Services in the Fourth Schedule of the Goods and Services Tax Act
Digital payment token
3. Supplies outside the scope of consumption tax
Selling goods from overseas to another overseas destination.
Private transaction
Selling goods in free trade zones and zero-tariff warehouses
Goods and services tax requirements
There are two situations:
If the taxable turnover of an enterprise in the last 12 months of a calendar year exceeds100000 USD, or at any time in the future, the company expects its income in the next 12 months to exceed100000 USD, it must register for goods and services tax.
If the taxable turnover does not exceed 6,543,800 yuan, the merchants can voluntarily register and pay the goods and services tax.
Singapore withholding tax
Withholding tax refers to the percentage withheld from the money paid by Singapore sources to non-tax residents in Singapore. The withholding amount will be remitted to the government for tax payment. For withholding tax in Singapore, non-residents include individuals and companies.
Non-resident individuals (staying in Singapore for less than 183 days) are divided into three categories, and different tax rates apply.
Non-resident directors: 22% of remuneration
Non-resident public entertainers: 65438+ 05% of income.
Non-resident professionals: 65438+ 05% of total income, or 22% of net income.
Non-resident companies (companies controlled and managed in Singapore) will levy different withholding tax rates according to different income types:
Interest, commission or other payments related to loans and debts-15%
Royalties or other payments for the use of movable property-10%
Rent or other payment for the use of movable property-15%
Remuneration for using scientific, technical, industrial or commercial knowledge or information-10%
Technical assistance and service fee-17%
Management fee-17%
Double taxation agreement
Singapore believes that double taxation poses a huge obstacle to Singapore's own economic status and world trade. This has enabled Singapore to sign double taxation avoidance agreements with more than 80 countries.
Its main purpose is to prevent double taxation when the source of income is transferred from Singapore to another country. In addition, these double taxation treaties also provide the two signatories with tax reductions and preferential tax rates applicable to certain types of income.
As for the scope, double taxation agreements apply to residents of two signatory countries (called contracting countries), including Singapore. The following are the main types of income covered by a typical double taxation avoidance agreement:
Real estate income
commercial profits
Sea and air transport
affiliated enterprise
bonus
be interested in
Royalties and technical service fees
capital gain
Independent personal service
Rely on personal service
pension
public office
Other income
Residents of both Contracting States are entitled to all the preferential conditions stipulated in the double taxation avoidance agreement.
The above is an introduction to Singapore's taxation. Please contact us if you want to know more details.