Overview
Income tax Singapore
Singapore follows a territorial system of taxation. Additionally, it’s worth noting that Income Tax in Singapore also provides for certain tax incentives and schemes, accordingly businesses and individuals may be eligible for lower effective tax rates.
Singapore has an extensive tax treaty network, which provides relief from double taxation for income earned by resident of Singapore and those countries. Since income tax in Singapore and tax policies across the globe change continuously over a period of time. In light of this, he should consult a tax professional (See our Disclaimer).
Singapore Corporate Tax Rate
Singapore Corporate Tax Rate are as under: –
- Singapore Corporate Income Tax Rate – 17 %
- No Surtax in Singapore
- Withholding Tax Rate Singapore are as under: –
| Nature of payments | Local WHT Rate (A) | Treaty WHT Rate (B) (Singapore – India) | Applicable WHT Rate (A or B, whichever is more beneficial) |
| Interest | 15% | 15% | 15% |
| Dividend | 0% | 0% | 0% |
| Royalty | 10% | 10% | 10% |
| Fee for Technical Services | 17% | 10% | 10% |
- Individuals are liable to slab based tax system as under: –
- 17%.
Capital Gains Tax under Singapore India Tax Treaty
The Capital gains tax under Singapore Domestic Tax laws, Treaty, and the beneficial rate out of the two that a taxpayer can opt are as under: –
| Capital Gain | Withholding Tax Rate |
| Domestic Capital Gains Tax Rate in Singapore | NIL |
| Capital Gains Tax under Singapore India Tax Treaty | NIL |
| Beneficial Rate that may be opted by a tax resident, selling shares of a Singapore Company | NIL |
-
Capital Gains Tax Singapore
Capital Gains Tax in Singapore, under domestic tax laws of Singapore is 0%.
- Capital Gains Tax under Treaty
Under the Tax Treaty between India and Singapore, Capital gains derived from the sale of shares of a Singaporean company by an Indian tax resident, would be liable to tax both in India and Singapore.
Dividend Tax under Singapore India Tax Treaty
Corporate Income Tax in Singapore on Dividend income under Singapore Domestic Tax laws, Treaty, and the beneficial rate out of the two that a taxpayer can opt are as under: –
| Dividend | Withholding Tax Rate |
| Domestic Dividend Tax Rate in Singapore | NIL |
| Tax on Dividend paid by a Singapore company under Singapore India Tax Treaty in Singapore | NIL |
| Beneficial Rate that may be opted by a tax resident, receiving dividend from a Singapore company | NIL |
-
Singapore Dividend Tax
Under the domestic laws of Singapore, Singapore tax rate on dividend received from a Singaporean company would be 0%.”
-
Dividend Tax under India Singapore Tax Treaty
Under Tax Treaty between India and Singapore, dividends paid by a company which is a resident of Singapore to a resident of India shall be exempt from any tax in Singapore. One would need to evaluate the taxation of such dividend in India, based on domestic tax laws of India.
Interest Tax under Singapore India Tax Treaty: –
Income Tax in Singapore on interest income under Singapore Domestic Tax laws, Treaty, and the beneficial rate out of the two that a taxpayer can opt are as under : –
| Interest | Withholding Tax Rate |
| Interest Tax Rate in Singapore | 15% |
| Tax on interest paid by a Singapore company under Singapore India Tax Treaty in Singapore | 15% |
| Beneficial Rate that may be opted by a tax resident, receiving interest income from a Singapore company | 15% |
-
Singapore tax on Interest Income
Singaporean-sourced interest income is subject to taxation at the time it is earned.
-
Interest Tax under Treaty
Under the Tax Treaty between Indian and Singapore, the tax charged in Singapore on interest paid to an Indian tax resident shall not exceed:-
- 10 per cent of the gross amount of the interest if such interest is paid on a loan granted by a bank carrying on a bona fide banking business or by a similar financial institution (including an insurance company).
- 15 per cent of the gross amount of the interest in all other cases.
Royalty Tax under Singapore India Tax Treaty: –
Corporate Income Tax on royalty income under Singapore Domestic Tax laws, Treaty, and the beneficial rate out of the two that a taxpayer can opt are as under: –
| Royalty | Withholding Tax Rate |
| Royalty Tax Rate in Singapore | 10% |
| Tax on Royalty paid by a Singapore company under Singapore India Tax Treaty in Singapore | 10% |
| Beneficial Rate that may be opted by a tax resident, receiving Royalty income from a Singapore company | 10% |
-
Singapore royalty withholding tax
Singaporean-sourced Royalty income is subject to taxation at the time it is earned.
-
Royalty Tax under Treaty
Under Treaty between Indian and Singapore, the royalties may be subject to a WHT of 10%.
Fee for Technical Services Tax under Singapore India Tax Treaty: –
Corporate Income Tax on Fee for Technical Services under Singapore Domestic Tax laws, Singapore India Tax Treaty, and the beneficial rate out of the two that a taxpayer can opt are as under: –
| Fee for Technical Services | Withholding Tax Rate |
| Fee for Technical Services Tax Rate in Singapore | 17% |
| Tax on Fee for Technical Services paid by a Singapore company under Singapore India Tax Treaty in Singapore | 10% |
| Beneficial Rate that may be opted by a tax resident, receiving Fee for Technical Services from a Singapore company | 10% |
-
Fee for Technical Services – Tax Rate in Singapore
Payments made by Singapore companies to non-resident companies for services related to the application, use, or management of scientific, technical, industrial, or commercial knowledge or information may be subject to a 17% withholding tax.
-
Fee for Technical Services – Tax under Treaty
Under Tax Treaty, fee for technical services may be subject to a tax of 10% of the gross amount of Fees for Technical Services.
Book consultation to save your taxes today.
FAQs: –
Question: Does Singapore tax Capital Gain?
Answer: No, there is no tax on capital gains in Singapore.
Question: Are dividends taxed in Singapore?
Answer: No, Singapore dividends are exempt in the hands of the recipient.
Question: How much is Singapore withholding tax on royalty?
Answer: Under the domestic laws of Singapore, the withholding tax rate on royalty is 10%.
Relevant Websites: –
Disclaimer: – This article is for informational purposes only and is not intended to provide legal, tax, or accounting advice. You should not rely on the information in this article as a substitute for professional advice.
Related Blog:
Webinar on Tax implications for investment from Singapore into India
