List of Singapore Tax System for Expats, Foreigners and Citizens

Brief History of Singapore Tax System

Currently, Singapore has a very highly developed market economy. Its economy has been labelled one of the most innovative, most business-friendly and most competitive economies in the world.

The following is a brief look at its current position on taxes regarding capital gains and income, residential property and taxation of foreigners vis-a-vis Singaporeans.

Capital Gains Tax

Currently, there is no capital gains tax in Singapore.

For professional traders, those who earn a living from selling goods and services for profit, the income generated will be considered personal income and is, therefore, subject to personal income tax rates.

Rental Income Tax

Rental income from the renting of property in Singapore is subject to income tax. Your property, however, is subject to property tax.

Your rental income includes the rent of the property, maintenance, furniture and fittings. The net amount, or remainder, after deductions for the expenses, such as property tax, is taxable.

Rental income earned by non-residents is subject to the foreign tax rate of 20%. The taxable income is computed by deducting property tax, insurance, maintenance and repairs from the gross rental income. Depreciation of the property is not deductible.

Residential Property Tax

Property tax is levied on fixed assets; that is a property that is immovable such as apartments, rental spaces, etc. Property tax is levied on a percentage of the annual value of the property.

For residential properties, property tax is levied at progressive rates. The following table shows the values and their associated tax rates.

Foreigners pay, in addition, a 10% surcharge. A concessional rate of 4% is levied on owner-occupied residential properties.

A flat rate of 10% is levied on industrial properties, commercial properties, and rental properties.

Singapore Tax System: Foreigners vs. Singaporeans

Who is a Singaporean tax resident?

You are a tax resident in Singapore if you are a –

• Singaporean who normally resides in Singapore except for temporary absences; or
• Singapore Permanent Resident (SPR) that is you have established your permanent home in Singapore; or
• A foreigner who has stayed in Singapore for 183 days or more.
• A foreigner (who is not a director of a company) who has worked in Singapore for 183 days or more.

Otherwise, you are treated as a non-resident of Singapore for tax purposes.

The Tax Rates

Different tax rates apply to tax resident and non-resident individuals.

Employment income of non-residents is taxed at a flat rate of 15%. All other income earned by non-residents is taxed at a flat rate of 20%.

Interesting Facts about the Singapore Tax System!

The country has been identified a popular tax haven for wealthy individuals due to the low tax rate on personal income and tax exemptions on foreign-based income and capital gains.

An example is Australian millionaire retailer Brett Blundy (with a personal net wealth worth AU$835 million) and billionaire Facebook co-founder Eduardo Saverin, both of whom have moved to and settled in Singapore.

In 2009, approximately 40% of Singapore’s residents were foreigners, which is one of the highest percentages in the world.

However, the Singaporean government is considering the influx of foreigners,  Yet, they also realised that the foreigners also make up a large part of the blue collar workers in Singapore;  80% of the construction industry and up to 50% of the service industry.

Read up more on taxes and how to master them.