Taxation of individuals

Income is taxable when it accrues in or is derived from Singapore, whether or not the individual is resident in Singapore. Income derived from sources outside Singapore is only taxable if it is received in Singapore by a resident individual through a partnership in Singapore.

Resident individuals are entitled to certain personal reliefs and deductions, and are subject to graduated tax rates ranging from 0% to 22% (24% from year of assessment 2024). Non-resident individuals are not entitled to any personal reliefs and deductions, and are subject to tax at a flat rate of 22% (24% from year of assessment 2024). As a concession, employment income of non-residents is taxed at the higher of a flat rate of 15% or the graduated resident rates with personal reliefs. This concession does not apply to non-resident directors.

Individual income tax rates

Residents

A resident individual's taxable income (after setoff of personal reliefs and deductions) is subject to income tax at progressive rates. Current rates for the years of assessment 2023 and 2024 (income years 2022 and 2023) are shown below.

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Non-residents

Non-resident individuals are taxed at a flat rate of 22% (24% from year of assessment 2024), except that employment income is taxed at a flat rate of 15% or at resident rates with personal reliefs, whichever yields a higher tax. A non-resident director’s remuneration does not qualify for the reduced rate, and withholding tax (WHT) at 22% (24% from year of assessment 2024) must be deducted from remuneration paid to a non-resident director.

 

Social Contribution  

Central Provident Fund (CPF)

The CPF is Singapore's national pension scheme. Contributions are payable by Singapore citizens and Singapore Permanent Residents (i.e. SPR obtained via immigration rules) only. Employers and employees contribute 17% and 20%, respectively, of ordinary monthly wages, up to an income ceiling of SGD 6,000. Their respective maximum contributions are therefore SGD 1,020 and SGD 1,200 per month. The rates are applicable to Singaporeans and SPRs (from third year and onwards) aged 55 years and below.

These rates also apply to additional wages (e.g. year-end bonus), up to a maximum contribution of:

• the actual additional wages if the annual ordinary wages are not more than the ordinary wage ceiling of SGD 72,000 and the total wages are not more than the maximum contribution of SGD 102,000

• the difference between the maximum contribution of SGD 102,000 and annual ordinary wages if the total wages exceed the maximum contribution of SGD 102,000 but the annual ordinary wages are not more than the ordinary wage ceiling of SGD 72,000, or

• the lower of the difference between the maximum contribution and the ordinary wage ceiling (SGD 102,000 - SGD 72,000) or the actual additional wages if annual ordinary wages exceed the ordinary wage ceiling of SGD 72,000.

Reduced rates apply for employees who are earning less than SGD 750 per month, as well as for those above 55 years of age, although these rates are being gradually increased.

The income ceiling will be increased in four stages by 2026 – to SGD 6,300 from 1 September 2023, SGD 6,800 from 1 January 2024, SGD 7,400 from 1 January 2025 and SGD 8,000 from 1 January 2026. The annual ordinary wage ceiling and maximum monthly contributions for employers and employees will be increased accordingly, however the annual salary (comprising ordinary wages and additional wages) ceiling remains at SGD 102,000.

Foreign nationals and their employers are precluded from making CPF contributions. Foreign employees who become Singapore permanent residents, and their employers, may contribute at reduced rates for the first two years.

Supplementary Retirement Scheme (SRS)

The SRS is a voluntary scheme to encourage employees and the self-employed to save for retirement over and above their CPF savings. The maximum amount to be contributed is subject to an income cap of SGD 102,000. Employers are allowed to contribute to their employees’ SRS accounts, subject to the contribution limits below. Employees will be taxable on these employer contributions, but will be allowed corresponding tax relief.

The contribution rate caps for contributions made to the SRS scheme are as follows.

 

Residency status               Rate cap (%)                    Contribution cap (SGD)

Singapore citizens or

permanent residents               15                                             15,300

Foreigners                               35                                             35,700

Taxation of legal persons

Companies (resident and non-resident) that carry on a business in Singapore are taxed on their Singapore-sourced income when it arises and on foreign-sourced income when it is remitted or deemed remitted to Singapore. Non-residents are subject to WHT on certain types of income (e.g. interest, royalties, technical service fees, rental of movable property) where these are deemed to arise in Singapore.

Tax on corporate income is imposed at a flat rate of 17%.

A partial tax exemption and a three-year start-up tax exemption for qualifying start-up companies are available.

 
Value Added Tax - VAT

Goods and services tax (GST)

Supplies made in Singapore and importation of goods

GST is charged at 8% on the supply of goods and services made in Singapore by a taxable person in the course or furtherance of one's business and on the importation of goods into Singapore. It was announced in the 2022 Budget that this rate would be increased to 9% on 1 January 2024.

The only exemptions from GST are prescribed financial services, the sale or rental of residential properties, the sale of digital payment tokens, and the import and local supply of investment precious metals. Zero-rating only applies to the export of goods and international services (subject to conditions).

Import reliefs (e.g. Major Exporter Scheme, Approved Contract Manufacturer and Trader Scheme) are available to ease the cash-flow burden of GST registered businesses.

GST registration is required if a business makes taxable supplies in excess of SGD 1 million for a 12-month period. Voluntary registration is permitted if the taxable supplies is below the registration threshold, subject to conditions. A business may claim input tax credits on its purchases and expenses after its GST registration subject to satisfying the prescribed input tax conditions.

Overseas Vendor Registration regime

The Overseas Vendor Registration regime brings to tax business-to-consumer (B2C) supplies of remote services (i.e. digital services and non-digital services) and imported low value goods. There are specific definitions for remote services and imported low value goods.

Under the Overseas Vendor Registration regime, suppliers belonging outside Singapore are required to register, charge and account for GST on supplies of remote services and imported low value goods supplied to non-GST registered customers in Singapore. Under certain conditions, local and overseas operators of electronic marketplaces may also be regarded as the supplier of the supplies made by the overseas suppliers through these marketplaces.

Overseas suppliers which supply imported low value goods and remote services to Singapore non-GST registered customers in excess of SGD 100,000 in a 12-month period and have a global annual turnover of at least SGD 1 million are required to register for GST in Singapore.

Reverse Charge

Reverse charge applies to local businesses that are subject to input tax restriction due to the making of certain exempt supplies or carrying on of non-business activities. If these businesses are registered for GST, they are required to self-account for GST on their purchases of in-scope imported services procured from overseas service providers and on their purchases of imported low value goods. These businesses may, in turn, claim the GST accounted for as their input tax, subject to the normal rules for input tax recovery.

If these businesses are not registered for GST, they would be liable for GST registration under the reverse charge rules if their purchase of in-scope services and imported low value goods exceeds SGD 1 million in a 12-month period.

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