Expats Working in Singapore – Guide to Income Tax For Foreigners

Singapore is a good place to earn money thanks to the low tax environment… so long as you don’t spend all of it on overpriced alcohol. But just how low are taxes, and do you really qualify for them as an expat if you are spending half the year somewhere else? Here’s a guide to income tax in Singapore for foreigners, so you know exactly how much you need to pay the next time IRAS comes knocking.

Contents

1. Are you a tax resident of Singapore?
2. What is the resident income tax rate in Singapore?
3. How much taxes do you pay if you are NOT a tax resident of Singapore?
4. What tax reliefs do you qualify for?
5. Not Ordinarily Resident Scheme
6. How do you file your taxes?

 

Are you a tax resident of Singapore?

If you are a tax resident, that means you pay income taxes at local resident rates. These taxes are applied progressively, meaning you pay more if you earn more.

Living in Singapore some of the time doesn’t automatically qualify you as a tax resident. For example, thanks to the Internet, it is totally possible to be working for a Singapore company and yet be based elsewhere for more than half the year.

Here’s how to figure out if you are a tax resident, and what it means.

Period of stay in Singapore	Are you a tax resident?	Tax implications
At least 183 days in a year	Yes	You pay income tax at resident progressive rates and can claim tax relief.
At least 183 days for a continuous period over two years	Yes, for both years	You pay income tax at resident progressive rates and can claim tax relief.
3 consecutive years	Yes for all three years	You pay income tax at resident progressive rates and can claim tax relief.

Example 1

You were in Singapore from 1 February to 30 September 2017, for a total of 242 days. That means you were a tax resident in 2017.

Example 2

You were in Singapore from 15 October 2016 to 30 April 2017, for a total of 198 days. That means you were a tax resident in both 2016 and 2017.

Example 3

You were in Singapore from 1 January 2016 to 1 June 2016 (153 days) and 1 January 2017 to 1 June 2017 (152 days). Over the two years, you were in Singapore for a total of 305 days. However, because you were not residing in Singapore for 183 continuous days over the two years, you were neither a tax resident in 2016 nor 2017.

Example 4

You were in Singapore from 1 September 2015 to 1 April 2016 (214 days), and then from 30 December 2016 to 15 July 2017 (198 days). That means you were a tax resident in 2015, 2016 and 2017.

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What is the resident income tax rate in Singapore?

The short answer: probably lower than what you’d pay back home.

Singapore is considered a bit of a tax haven, though not on the level of the Cayman Islands or Bermuda. As a tax resident, you will pay the following income tax rates in 2018 on the previous year:

Chargeable income	Income tax rate	Gross tax payable
First $20,000 Next $10,000	0% 2%	$0 $200
First $30,000 Next $10,000	– 3.5%	$200 $350
First $40,000 Next $40,000	– 7	$550 $2,800
First $80,000 Next $40,000	– 11.5%	$3,350 $4,600
First $120,000 Next $40,000	– 15%	$7,950 $6,000
First $160,000 Next $40,000	– 18%	$13,950 $7,200
First $200,000 Next $40,000	– 19%	$21,150 $7,600
First $240,000 Next $40,000	– 19.5%	$28,750 $7,800
First $280,000 Next $40,000	– 20%	$36,550 $8,000
First $320,000 In excess of $320,000	– 22%	$44,550

Example 1

You earned $54,000 in 2017. You would pay $550 on the first $40,000, and a rate of 7% on the remaining $14,000.

Your total tax liability would be $550 + $980 (7% x $14,000) = $1,530

Example 2

You earned $260,000 in 2017. You would pay $28,750 on the first $240,000, and a rate of 19.5% on the remaining $20,000.

Your total tax liability would be $28,750 + $3,900 (19.5% x $20,000) = $32,650

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How much taxes do you pay if you are NOT a tax resident of Singapore?

So, you spent less than 183 days in Singapore last year. That means that you are officially not a tax resident of Singapore.

However, that does not necessarily mean that you will not be taxed on your employment income earned in Singapore.

Period of stay in Singapore	Are you a tax resident?	What taxes must you pay?
61 to 182 days in a year	No	Employment is taxed at either: – 15%, or – resident progressive income tax rates whichever is higher Director’s fees and other income are taxed at 22%. You cannot claim tax relief.
Employed for 60 days or less (Absences from Singapore which are incidental to your employment count as time in Singapore)	No	None, unless you are a director of a company, a public entertainer or a professional

Example 1

You were in Singapore for 100 days in 2017. You earned $60,000 that year from a job in Singapore.

You would have to pay the HIGHER of the two::

• Tax rate of 15%. The total amount payable would be $9,000 (15% x $60,000).

OR

• Resident progressive tax rate. The amount payable would be $550 on the first $40,000 and then 7% on the remaining $20,000. The total amount payable would be $550 + $1,400 (7% x $20,000) = $1,950.

You would thus have to pay $9,000.

Example 2

You were in Singapore for 90 days in 2017. That year, you earned $100,000 worth of fees as director of a Singapore company.

You would have to pay tax at a rate of 20% on your director’s fees. The total amount payable would be $22,000 (22% x $100,000).

Example 3

You were in Singapore for 50 days in 2017, during which you earned $2,000.

You do not have to pay any income tax.

Example 4

You were in Singapore for 20 days in 2017. That year, you earned $80,000 worth of fees as a director of a Singapore company.

You would have to pay tax at a rate of 20% on your director’s fees. The total amount payable would be $17,600 (22% x $100,000).

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What tax reliefs do you qualify for?

If you are a tax resident in Singapore, you are eligible for tax reliefs.

How tax reliefs work is that they reduce the amount of income you have to pay taxes on. So if you earned $70,000 in 2017 and were eligible for $5,000 worth of tax relief, your taxable income or the year would have been $65,000.

The maximum amount of tax reliefs you are entitled to is $80,000 per year.

Employees are entitled to the following types of tax reliefs:

Course Fees Relief

You can claim up to $5,500 worth of tax relief a year for fees you’ve incurred attending any course, seminar or conference leading to an approved academic, professional or approved vocational qualification, or that is relevant to your current employment, trade, business, profession or vocation. For vocational qualifications, the course provider must be a Singapore-registered entity.

Earned Income Relief

This type of tax relief is open to anyone whose taxable income is derived from employment, pension or a trade/business/profession/vocation. That’s basically everyone who’s working in Singapore, so yay!

The amount of relief you get is based on your age and how much you earned in the year prior to the Year of Assessment (ie. the year in which you pay taxes).

Age as of 31 Dec the previous year	Amount of relief
Below 55	$1,000
55 to 59	$6,000
60 and above	$8,000

Spouse / Handicapped Spouse Relief

If your spouse was living with and/or supported by you in the previous year and did not have any annual income exceeding $4,000 that year (this income limit does not apply to handicapped spouses; annual income includes taxable and tax-exempt income, as well as foreign-sourced income even if it was not remitted to Singapore.), you can claim tax relief provided you:

• are legally separated from your spouse, or
• made maintenance payments under a Court Order or Deed of Separation.

You cannot claim tax relief for paying alimony to a former spouse if you are divorced.

If you are legally separated, you may claim one of the following amounts, whichever is lowest:

• Maintenance payments made in the previous year
• $2,000 for non-handicapped wife, or
• $5,500 for handicapped wife.

Child / Handicapped Child Relief

So, your kids are unmarried and still living off you? You might qualify for Child Relief if he or she satisfies the following conditions:

• He is born to you and your spouse or ex-spouse, or is a step-child or your legally-adopted child
• He is below the age of 16, or was studying full-time at any university, college or other educational institution for any amount of time in the year for which you are paying taxes
• He did not have an annual income exceeding $4,000
• If you have a handicapped child, there is no income or age limit, and it does not matter whether he was a full-time student or not.

Handicapped Brother / Sister Relief

You must have a handicapped sibling or sibling-in-law who lived in Singapore in the same household as you, and you must have incurred at least $2,000 supporting him or her that year.

You can claim up $5,500 per handicapped sibling or sibling-in-law.

You can claim $4,000 per child, or $7,500 per handicapped child. The total amount of Child  / Handicapped Child Relief you can claim per year is $50,000.

Parent / Handicapped Parent Relief

If you’ve been supporting parents, grandparents, parents-in-law or grandparents-in-law who live in Singapore, you might be able to claim tax relief for doing so.

The parent in question must:

• Be living in Singapore for at least 8 months
• Be living in your household, OR apart from you and have caused you to incur $2,000 or more in supporting him or her
• Be aged 55 years and above
• Not have had an annual income exceeding $4,000 (income limit does not apply for handicapped parents). Annual income includes taxable and tax-exempt income, as well as foreign-sourced income even if it was not remitted to Singapore.

Here’s how much you can claim:

Is parent living with you?	Is parent handicapped?	Tax relief amount
Yes	No	$9,000
No	No	$5,500
Yes	Yes	$14,000
No	Yes	$10,000

Foreign Maid Levy Relief

If you are a married or once-married woman and you and/or your spouse hired a foreign domestic helper in the previous year, you might be able to claim relief worth 2 times the maid levy that you were required to pay.

In the year for which you are paying taxes, you must be:

• Married and living with your husband, or
• Married to someone who is not a tax resident in Singapore, or
• Separated from your husband, divorced or widowed, and have children who live with you and on whom you can claim Child Relief (see above).

Supplementary Retirement Scheme

The Supplementary Retirement Scheme (SRS) is a scheme which is designed to encourage you to save and invest for retirement. It is open to citizens, PRs and foreigners who are earning an income. You open an SRS account with one of three banks (DBS, OCBC or UOB) and then are free to make contributions.

You are entitled to tax relief for the amount of SRS contributions made by you or your employer in the preceding year.

Donations Tax Deduction

Donating to charity is tax-deductible. You can choose to donate cash, shares, computers, artefacts, land and buildings or public art to approved charities or the government. But no, that old sofa you gave to the Salvation Army does not count as an artefact.

The tax deduction for donations is 250% right now.

Life Insurance Relief (only applicable to PRs)

You can claim life insurance relief if your total compulsory employee CPF contribution, self-employed Medisave/Voluntary CPF contribution and voluntary cash contribution to your Medisave account was less than $5,000, and you paid insurance premiums on your own life insurance policy from a Singapore company.

The tax relief amount you’re entitled to will be one of the following:

• $5,000 minus your CPF contribution
• Up to 7% of the insured value of your own or your wife’s life, or
• Up to 7% of the insurance premiums paid

NSman relief (only applicable to PRs)

If you’ve served full-time National Service as a PR, you get to claim tax relief every year.

You get $3,000 ($5,000 if you are an NS key command and staff appointment holder) worth of tax relief for every year in which you perform NS activities (like reservist), and $1,500 ($3,500 if you are an NS key command and staff appointment holder) for each year in which you do not.

This tax relief will be automatically granted to you, so you do not need to include it when filing your taxes.

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Not Ordinarily Resident Scheme

If you’ve been coming and going for years, you might qualify for the Not Ordinarily Resident (NOR) scheme.

To qualify, you must:

• Be a tax resident for the Year of Assessment (ie. the year in which you are applying for NOR status)
• Have been non-resident for three consecutive Years of Assessment before that.

Time apportionment of Singapore income

As an NOR, the amount of taxes you pay on your Singapore employment income will be pro-rated according to the number of days you have spent in Singapore.

In order to qualify for this time apportionment of your Singapore employment income, you must:

• have spent at least 90 days outside of Singapore for business reasons, and
• have a total Singapore employment income of at least $160,000 (director’s fees don’t count).

Tax exemptions

NORs also receive tax exemptions on employer’s contributions to non-mandatory overseas pension funds or social security schemes (not applicable if your employer is an investment holding company, tax-exempt body, representative office or foreign company not registered in Singapore).

To qualify:

• You must not be a PR,
• You must earn a Singapore employment income of at least $160,000, and
• Your employer must not be claiming deductions on these contributions

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How do you file your taxes?

The deadline for tax filing is 18 April every year for those doing it electronically, and 15 April for those doing so using the paper form.

Paying taxes in Singapore is super easy. As an employee, you will not need to hire an accountant to file your taxes for you.

Simply log in to IRAS’s myTax Portal using your SingPass (if you are a PR, Passholder or selected Work Permit holder) or request for an IRAS PIN here. If you don’t have your SingPass yet, you can register for one here.

Once you have logged in, you simply have to fill in information about your income (if your employer has not already done so) and tax reliefs being claimed. That’s it.

If you’d prefer to file your taxes using a physical form, IRAS will send one to your mailing address when the time comes.

 

Have you ever paid taxes in Singapore as a foreigner? Share your experiences in the comments!