If you’re a non-resident company or person with a Singapore address, you may be subject to a Singapore withholding tax on your profits. Find out more by reading on. Here we are going to talk about Withholding Tax (Section 45) .
The Singapore withholding tax refers to what kind of tax?
When a non-resident corporation or person receives revenue from a Singaporean source in return for services performed or work done in Singapore, the Inland Revenue Authority of Singapore (IRAS) withholds and pays the tax to IRAS. It is up to Singapore’s tax authority, known as IRAS, to collect taxes for the nation.
In Singapore, withholding tax is required when a Singapore corporation or individual pays a non-resident for services rendered in Singapore, a part of which must be paid to the Inland Revenue Authority of Singapore (IRAS).
If the Singapore withholding tax applies, what are the conditions?
Non-resident businesses and individuals are exempt from Singapore withholding tax if and only if:
Singaporean-based sources of income
Singaporean services are provided and Singaporean work is accomplished.
- Examples of payments subject to Singapore withholding tax (more details may be found under “What sorts of payments are subject to Singapore withholding tax?”
- It is important to remember that income in Singapore is defined by law to include not just service fees but also salary or allowances and other expenditures such as accommodation, travel and other costs.
Understanding Singapore’s withholding tax policies is crucial for businesses operating in the country. However, navigating the complexities of these policies can be a challenge without the right expertise. That’s where a professional tax and accounting service can play a critical role, providing valuable insights and guidance on Singapore’s withholding tax policies, as well as other tax-related matters.
What is the definition of a non-Singapore tax-resident firm?
- For the purposes of taxes in Singapore, the following are considered non-resident companies:
- The term “foreign-owned enterprises” refers to companies that are based outside of Singapore yet have a presence in Singapore (FTEs).
- Managed and/or controlled from a place outside Singapore, Singapore-registered offices
- The Singapore branch offices of foreign firms are referred to as branch offices.
Can you provide me with a list of payments in Singapore that have a withholding tax attached?
Interest, commissions, and any other expenses associated with a loan or debt are included.
Non-resident suppliers are liable to withholding taxes in Singapore if they are owed interest, interest on credit terms, or commission or loan fees for their services.
Intellectual property includes royalties, usage rights, and intellectual property
Withholding tax in Singapore is imposed at a rate of 10% or the corporation rate, whichever is greater, on royalties received. If you employ commercial, scientific, technical or industrial skills in your company operations or engage non-resident professionals to supply these abilities on your behalf, you will be liable to withholding tax.
Administration costs (prevailing corporate tax rate)
Payments made to foreign organisations that offer management services or assist you in running your company may be subject to Singapore withholding tax. Only a few of the conditions that must be met include the fact that your organisation maintains a permanent office in Singapore.
Singapore withholding tax at the current corporation tax rate applies when you hire non-resident enterprises to install equipment, provide technical support, provide training and consultancy services, or undertake similar operations in Singapore. Remote services are not subject to withholding tax. This is a reminder. Singapore withholding tax applies to the rental of movable property and any payments made to the non-resident company for such property.