Tax

Residence and domicile

How does an individual become taxable in your jurisdiction?

An individual’s income that has its source in Singapore is chargeable to income tax in Singapore. Singapore does not have any capital gains, inheritance or gift taxes.

Generally, an individual’s income that arises outside of Singapore (except income from employment overseas that was incidental to employment in Singapore) may be remitted to Singapore without being taxed.

An individual may be resident or non-resident for income tax purposes. The tax treatment (eg, applicable tax rates, exemptions from income tax and availability of personal reliefs) may differ depending on the residency of the individual.

An individual will be treated as a tax resident in Singapore if he or she is a:

  • Singapore citizen or Singapore permanent resident who resides in Singapore except for temporary absences; or
  • foreigner who has stayed or worked in Singapore for 183 days or more in the previous year of assessment.
Income

What, if any, taxes apply to an individual’s income?

Resident individuals are subject to tax at the graduated tax rates specified in Part A of the Second Schedule to the Income Tax Act (Cap 134).

Chargeable income

Income tax rate

First S$20,000

0%

Next S$10,000

2%

Next S$10,000

3.5%

Next S$40,000

7%

Next S$40,000

11.5%

Next S$40,000

15%

Next S$40,000

18%

Next S$40,000

19%

Next S$40,000

19.5%

Next S$40,000

20%

Any income in excess of S$320,000

22%

Non-resident individuals are subject to tax on their employment income in Singapore at a rate of 15 per cent or at the applicable resident tax rates (whichever results in a higher tax liability). Non-resident individuals are subject to tax on all other Singapore-sourced income at the rate of 22 per cent.

Capital gains

What, if any, taxes apply to an individual’s capital gains?

There is no capital gains tax in Singapore.

Lifetime gifts

What, if any, taxes apply if an individual makes lifetime gifts?

There is no gift tax in Singapore.

Inheritance

What, if any, taxes apply to an individual’s transfers on death and to his or her estate following death?

There is no estate duty imposed for deaths that occurred on or after 15 February 2008.

Real property

What, if any, taxes apply to an individual’s real property?

Stamp duty

Stamp duty may be payable by both the buyer and the seller on documents executed for the sale and purchase of real property in Singapore. Stamp duty is computed based on the transacted price or the market value of the property, whichever is higher. The rate of the buyer’s stamp duty varies depending on whether the property is residential or non-residential, the nationality of the buyer and whether the buyer already owns other real properties in Singapore.

The rate payable by buyers who are Singapore citizens and permanent residents of Singapore is up to 19 per cent for residential property and 3 per cent for non-residential property. The rate payable by buyers who are not citizens or permanent residents of Singapore is up to 24 per cent for residential property and 3 per cent for non-residential property.

The rate of stamp duty payable by a seller varies depending on the length of time that the property was held by such seller and whether the property transferred is residential or non-residential in nature. The rate payable by sellers for residential properties is up to 12 per cent and the rate payable by sellers for industrial properties is up to 15 per cent.

Property tax

Property tax is payable annually by the owner of the property. It is computed by reference to the annual value of the property, which is the estimated annual rent that could be earned with the property. The rate of property tax for residential properties is dependent on whether the owner occupies the property. For owner-occupied residential properties, the rate is progressive at zero to 16 per cent. For non-owner occupied residential properties, the rate is progressive at 10 to 20 per cent. The rate of property tax for commercial and industrial properties is 10 per cent.

Non-cash assets

What, if any, taxes apply on the import or export, for personal use and enjoyment, of assets other than cash by an individual to your jurisdiction?

Singapore is generally a free port and an open economy. While most imports into Singapore are duty-free, Singapore levies high excise taxes on distilled spirits and wine, tobacco products, motor vehicles and petroleum products.

Other taxes

What, if any, other taxes may be particularly relevant to an individual?

Goods and services tax (GST) is chargeable on all goods and services supplied in Singapore (except certain exempted supplies). The rate of GST is currently 7 per cent and is set to increase to 9 per cent between 2021 to 2025.

Trusts and other holding vehicles

What, if any, taxes apply to trusts or other asset-holding vehicles in your jurisdiction, and how are such taxes imposed?

Generally, the trustee will be assessed for tax on the income of the trust at a rate of 17 per cent. Where a trustee can prove that a beneficiary is entitled to a share of the trust income and the beneficiary is a resident of Singapore, it may be possible that the trustee will not be taxed while the beneficiary will be taxed on his or her corresponding share of trust income at the rate applicable to him or her.

Pursuant to section 23 of the Stamp Duties Act, additional conveyance duties (ACD) is payable if an individual buys or sells equity interests (eg, shares or units) in property-holding entities that own primarily residential properties in Singapore. ACD applies to the purchase or sale of equity interests by persons or entities who are significant owners of such property-holding entities or who become one after purchase.

Charities

How are charities taxed in your jurisdiction?

Charities registered with the Commissioner of Charities enjoy exemption from income tax.

Anti-avoidance and anti-abuse provisions

What anti-avoidance and anti-abuse tax provisions apply in the context of private client wealth management?

Singapore’s general anti-avoidance rules (GAAR) are embodied in section 33 of the Income Tax Act. Section 33 empowers the Comptroller of Income Tax to disregard the legal form of transactions in certain circumstances to counteract impermissible tax advantages obtained by a tax payer. In addition to the Income Tax Act, similar GAAR provisions exist in the Goods and Services Tax Act (see section 47) and the Stamp Duties Act (see section 33A).

The GAAR empower the tax authority to disregard or vary arrangements that directly or indirectly:

  • alter the incidence of any tax that is payable by or which would otherwise have been payable by any person;
  • relieve any person from any liability to pay tax or to make a return (in the case of income tax); or
  • reduce or avoid any liability imposed or that would otherwise have been imposed on any person by the Income Tax Act or Stamp Duties Act.

The tax authority may also make adjustments as it considers appropriate, including the computation or recomputation of gains or profits or the imposition of liability to tax, so as to counteract any tax advantage obtained or obtainable by that person from or under that arrangement.

The Inland Revenue Authority of Singapore has promulgated an electronic tax guide which sets out its interpretation and application of the GAAR and provides examples of arrangements that, from its perspective, have the purpose or effect of tax avoidance. The electronic tax guide also clarifies what the GAAR does not target, namely the tax consequences of genuine commercial transactions.