All income earned in Singapore is liable for income tax. Thus, if you are an individual including a local or a foreigner, whether an employee or self-employed (i.e sole proprietors or partners) earning income in Singapore, you are liable to pay income tax on such income.
Furthermore, income tax in Singapore is charged on a progressive basis. This means that as your taxable income increases, the amount of income tax to be paid also increases.
In addition to this, the amount of income tax that you are liable to pay depends on:
- The amount of income you earn in Singapore and
- Your tax residency, that is, whether you are a Tax Resident or Non-Resident
It must be noted that you, as an individual, are taxed on the basis of income earned in the preceding calendar year. In other words, income earned in the calendar year 2019 would be taxed in the Year of Assessment (YA) 2020.
Thus, to understand tax filing services in Singapore, let’s take a look at how does tax filing work, steps to e-filing your income tax return, and income tax slab rates.
How to File Tax?
There are two ways you can file your annual Income Tax Return. These include:
E-Filing at myTax IRAS Portal
If you are an individual who receives either a letter or an SMS from IRAS that intimates you to furnish income tax return, you are required to do so even if:
- You did not earn any income in the previous year
- You only have employment income and your employer participates in Auto-Inclusion Scheme (AIS) and thus would be e-filing your employment income details to the IRAS
There are several benefits of e-filing your tax return. These include:
- Easy tax filing as all you need to do is e-file your tax return through mytax.iras.gov.sg portal with the help of your SingPass or IRAS Unique Account (IUA).
- You can access your account on the go.
Typically, taxpayers prefer to e-file their income tax returns. However, there is a small section of taxpayers who choose to file a paper tax return. Such taxpayers receive paper tax returns from IRAS between February to March each year.
That is, IRAS will send you your paper tax return between February to March each year.
No Filing Service
NFS or No Filing Service means that as an individual you need not file a tax return. IRAS would send you your Notice of Assessment (NOA) or Tax Bill from the end of April 2020 onwards.
This NOA contains your tax payable which is calculated based on your auto-included income and the relief claims of the previous year. In case you do not meet the eligibility criteria for relief claims, such claims could be adjusted.
You must keep in mind that as an individual it is your responsibility to make sure that your NOA contains correct details.
In case there is any income that is not reflected in your NOA or the relief claims so revealed are not correct, you need to intimate the IRAS about the same within 30 days from the date of your NOA.
You can check your auto-included details and preview your NOA using your SingPass or IUA at mytax.iras.gov.sg portal. This can be done from March 1, 2020, to April 18, 2020; the extended due date for which is April 2020.
If your details are correct, you can request an early assessment. However, your details are incorrect, you will have to e-file your tax return to make the requisite changes.
You must remember whether e-filing or paper filing your tax return, you need not disclose your employment income received from your employer if your employer participates in the Auto Inclusion Scheme (AIS).
This is because such details would automatically be included in your income tax assessment.
Steps to e-Filing Your Tax Return
Following are the steps to e-file your income tax return:
Have A SingPass or IRAS Unique Account (IUA)
SingPass or Singapore Personal Access is a common password that permits you as a user to access or undertake transactions with the majority of government agencies online in an easy and secure way.
It includes a two-step verification also known as 2FA through which you as a user enter your SingPass ID and password followed by a one-time password (OTP) sent to you via SMS on your registered mobile number.
To get your SingPass, you can apply online at singpass.gov.sg. You will receive your SingPass within four working days. In case you are not eligible for SingPass, you will have to apply and get an IRAS Unique Account (IUA) online.
IUA is also a two-step authentication that permits users to have access to e-services for personal tax-related issues at the mytax.gov.sg portal. So if you are a foreign individual, you are ineligible for a SingPass.
Thus, in order to access IRAS’s services, you will need IUA as it is only through IUA you would be able to have access to IRAS e-services. So, you would be needing a two-step verification through the SingPass mobile app to log on to the mytax.gov.sg portal.
To activate your IUA and set up your 2FA, you need a Tax Reference Number and SingPass Pin mailer. Thus, to receive these details from IRAS, you will first have to register for IUA by submitting an application for IUA.
On submitting the form, the Tax Reference Number assigned to you would be sent via email within 5 working days. However, the PIN Mailer so issued by the SingPass would be sent by mail to your Singapore address within 4 working days and non-Singapore address within 2 to 4 weeks.
Arrange Necessary Documents
Before you access your mytax.gov.sg portal, make sure that you have all the required documents ready. These include:
- SingPass or IUA as the case may be
- Form IR8A in case your employer is not participating in AIS
- Necessary details of your dependents such as parents, children, etc. to be eligible for new relief claims
- Details with regards to rental income from your property and other income if any
- Business Registration Number or Partnership Tax Reference Number only for those self-employed or partners
Go To mytax.gov.sg Portal
Access the mytax.gov.sg portal and log in using your SingPass or IUA as the case may be. Navigate to Individuals > File Income Tax Return to initiate filing tax return.
Remember, the electronic tax form as displayed would take you five to ten minutes for completion.
Check Your Details
It must be noted that IRAS would auto-populate the following details in your online tax form:
- All income, deductions, and reliefs from entities that participate in AIS. This could include employment income, donations, etc.
- Reliefs that you received in the previous year such as Foreign Maid Levy Relief, etc.
- Tenanted property information as per your previous year declaration or e-stamping records
As an individual, it is your duty to check that the auto-populated information is correct and complete. In case there is any variance, you may directly approach the concerned organization for the same.
The concerned organization would then resubmit such details to IRAS in case there are any differences in the original information so submitted.
Upgrade Your Existing Tax Reliefs
If you had availed certain reliefs for which you are no longer eligible, you need to remove the same when e-filing your tax return.
In case you are eligible for new reliefs, you need to include the same when e-filing your tax return.
Disclose Other Sources of Income
In case you have received income from other sources such as rental income from property in the previous year which is not auto-populated, you must disclose such income in your tax form.
Receiving Acknowledgement Receipt
Once you have filed your e-tax return successfully, you would see an acknowledgment page on your screen. Save a copy of the same or print the page for your future references.
Individuals Required To Pay Tax
As mentioned above, the amount of tax to be paid in Singapore depends on the amount of income earned in Singapore and your tax residency status. Let’s have a look at what makes you a tax resident or a non-tax resident in Singapore.
Individuals Working in Singapore
(i) Tax Resident in Singapore
You would be considered as a Tax Resident for a specific YA in case you are a:
- Singapore citizen who typically resides in Singapore except for temporary absences or
- Singapore Permanent Resident (SPR) who has a permanent home in Singapore or
- A foreigner who has stayed or worked in Singapore (this excludes Director of the Company) for 183 days or more in the previous year, that is, a year prior to the YA
Personal Tax for Singapore Residents
Once it is established that you are a tax resident of Singapore, you are entitled to claim deductions on expenses, donations, and personal reliefs.
Some of these tax reliefs or rebates are general in nature, that is, available to all taxpayers. However, some of them are aimed at specific groups of taxpayers in order to advocate certain social and economic objectives.
Some of these include Course Fee Relief, CPF Cash Top-Up Relief, Life Insurance Relief, Foreign Maid Levy Relief, etc. Thus, after deducting permissible expenses, donations, and personal reliefs from the income of tax residents, the remaining income is known as Taxable Income.
This taxable income is liable to income tax at progressive rates ranging from 0% to 22%.
(ii) Non-Resident in Singapore
If you do not meet the above conditions specified for a tax resident of Singapore, you would be considered as a Non-Resident in Singapore for income tax purposes.
So, if you are a Non-Resident in Singapore, you are entitled to claim deductions on expenses and donations that allow you to save tax. However, being a Non-Resident, you are not eligible to claim personal relief.
Furthermore, your employment income is taxed at:
- A flat rate of 15% or
- The progressive resident tax rate
whichever is higher of the two.
In addition to this, typically, the Director’s Fee, Consultant’s Fee, and all other income are taxed at the rate of 22%.
Individuals Doing Business in Singapore
All individuals doing business in Singapore and earning income from the same are required to pay income tax on such income earned. These individuals:
- Sole Proprietors
- Taxi Drivers
- Commission Agents etc
Let’s have a look at income tax obligations and filing in the case of partners and sole proprietors in Singapore.
(i) Income Tax in Case of Partners
If you are a partner registered with the Accounting and Corporate Regulatory Authority (ACRA), you are considered as self-employed. As a self-employed individual, you are required to disclose income earned from your business operations as a business income and not as a salary.
This business income is included in the total personal income which is taxable based on the individual income tax rates. It must be noted that a precedent partner must submit Partnership Income Tax Return in Form P on behalf of the partnership even though the partnership itself does not pay taxes.
Furthermore, as a Partnership Firm, you are obligated to file Form P if:
- As a partnership, you have done business in a particular year
- You have received a notification to e-file Paper Form P or an invitation to file Form P from IRAS even if you have not started the business in that year.
(ii) Income Tax in Case of Sole Proprietor or Self-Employed
Much like Partnership firms, the self-employed individuals also need to reveal income earned from their business operations as their business income and not salary. Such business income is treated as part of total personal income which is taxable at individual income tax rates.
Furthermore, you would be taken as a self-employed individual if you are earning in Singapore by the way of undertaking:
- Profession or
Typically, sole proprietors and partners registered with ACRA are considered as self-employed. If you are a sole proprietor, at the beginning of the year and typically by March 15, the IRAS would send you a notification or an individual income tax return, that is, Form B or Form B1.
This is sent to you so as to enable you to reveal your income from the business as well as income from other sources.
Individuals With Investments in Singapore
If you are an individual who gets income from investment in property, shares, Unit Trust, Fixed Deposit, etc in Singapore, you need to pay income tax.
That is to say, income received from the investment is included in your personal income and is subject to income tax. However, if your investment is exempted under the Income Tax Act, you need not pay any income tax.
Various types of income received from various investments include:
- Rental Income
- Gains from the sale of property
- Dividends received on shares
- Interest received on your Fixed Deposit etc.
Individuals Working Outside Singapore
Typically, if you are receiving overseas income in Singapore as an individual, such income is not subject to income tax and thus need not be disclosed in your income tax return.
It must be noted that overseas income is subject to income tax in Singapore only if such an income is received via:
- Partnerships in Singapore.
- Overseas employment that is connected with your employment in Singapore. In other words, overseas employment is part of your job in Singapore and hence you are required to travel overseas.
- Your employment overseas on behalf of the Singapore Government.
- Your business in Singapore and you are undertaking business overseas which is connected to your Singapore trade.
If your income from overseas employment is taxed in a foreign country, you can apply for Double Taxation Relief. This is to avoid paying tax twice for the same income.
Individuals Not Working But Receiving Income
Say you are an individual who is not working in Singapore. However, you are receiving any of the below-mentioned income.
In such a case, such an income would be included as a part of your personal income and would be subject to income tax unless such an income is exempted under the Income Tax Act.
These incomes include:
- Income from investments including rental income from property etc.
- NSman Income. These include awards and allowances such as IPPT Monetary Incentives
- Part-time income
- Royalty income
- Supplementary Retirement Scheme Withdrawals (SRS)
It must be noted that you would not pay any tax if your annual gross income is less than or equal to S$22,000. But you must file a tax return if you have received a filing notification from IRAS through SMS, letter, or Form.
Furthermore, even if there was no income earned by you in the last year, you still need to declare zero income and e-file your tax return. And, if your annual gross income is equal to or more than S$22,000, you would be liable to pay income tax.
The amount of income tax that you would be liable to pay would depend on the amount of income you earn and the deductions that you are entitled to claim.
Individuals Exempted From Paying Tax
As mentioned earlier, you are not liable to pay income tax if:
- Your Gross Income is equal to or less than S$22,000 in a specific year.
- You do not receive any income in Singapore
Income Tax Slab Rates
|Chargeable Income||Income Tax Rate (%)||Gross Tax Payable ($)|
In excess of $320,000
When is the Personal Tax Filing Due Date in Singapore?
Return filing for the Year of Assessment (YA) 2020 starts on March 1, 2020. Following are the due dates for filing an income tax return:
- In the case of e-filing, the due date would be April 18, 2020, that is now extended to May 31, 2020.
- In the case of paper filing, the due date is April 15, 2020, that is now extended to May 31, 2020.
Although the due date both for e-filing and paper filing has been extended up to May 31, 2020, however, if you still need more time to file your income tax return, you can go to ‘Request Extension of Time To File’ under ‘Individuals’ tab on your mytax.gov.sg dashboard to request for an extension.
Or else you can contact IRAS on the number provided on their website or send an email to them through mytax.gov.sg.
Tax Treatment of Employer Benefits
Capital Gains Tax, Inheritance Tax, Estate Duty