Individual Income Tax: Singapore’s individual income tax rates for 2012 are progressive, from 2% to 20%.
Personal annual tax rates 2012 (SGD, Singapore Dollar)
|Income (Singapore DOLLAR)||%|
Non-residents pay 15% on employment income and 20% on director’s fees, consulting fees and other income.
Corporate Tax: Singapore corporate tax rate for 2012 is 17%. There are reductions for the first SGD 300,000. 75% of the first SGD 10,000 and 50% of the next SGD 290,000 are tax exempt.
Capital Gains: There is no capital gain tax for both companies and individuals.
Dividend income is tax exempt by the recipients.
A company is resident when having its actual management in Singapore.
Individuals are resident when generally living in Singapore. Foreigners are residents if living in Singapore 183 days or more in a calendar year.
The Singapore income tax is imposed on a territorial basis. Singapore companies and individuals pay income tax only on Singapore source income. Income derived outside of Singapore is tax exempt.
Singapore Business Deductions
- Losses are carried forward indefinitely. There is a carry back for one year up to $ 100,000.
- Depreciation is deducted according to the type of the fixed asset.The depreciation rate for hardware, software and automation equipment is 100% (one year).Fixed asset of up to $ 1,000 can be depreciated in one year too.
- Vehicles and other fixed assets are depreciated 33.3% per year.
- There is no company consolidation for tax purpose. Under certain term companies from the same group can offset within the group unutilized loss and capital allowances.
- Thin capitalisation rules are not in effect in Singapore.
Singapore Tax Credits and Deductions
For Singapore residents there are tax credits and deductions.
Courses fees relief- up to $5,500 per year.
Earned income relief -$1,000 for earners under 59. Age 60 or more % 4,000.For handicapped people a relief of $ 2,000- $ 6,000 depending on age.
Handicapped brother/sister relief â€“ up to $ 3,500.
Relief for handicapped parent – $ 8,000- $ 11,000 for staying/non staying parent.
Handicapped child relief – $4,000-$ 5,500 per child.
Handicapped spouse relief- $ 3,500.
Singapore Tax Withholding Rates
In Singapore tax is deducted at source from the following payments to non residents:
Branch remittance to head office- 0%.
Singapore Social Security CPF
The contributions by the employer and the employee to CPF, central provident funds are subject to to ceiling defined by law.
Employer: 15.5% of the gross salary.
Employee: 20% of the gross salary.