Personal income tax rates in Singapore are one of the lowest in the world. In order to determine the Singapore income tax liability of an individual, you need to first determine the tax residency and amount of chargeable income and then apply the progressive tax rate to it. Key points of Singapore income tax for individuals include:
A progressive tax rate is followed in Singapore that starts from at 0% and ends at 20% above S$320,000.
No capital gains tax or inheritance tax is imposed.
Only income earned in Singapore is taxed. Aside from a few exceptions, income earned by individuals abroad is not subject to taxation.
Tax rules differ based on the tax residency of the individual.
Tax filing due date for individuals is April 15 of each year. Income tax is assessed based on a preceding year basis.
Filing of personal tax return is mandatory if your annual income is S$22,000 or more. If your annual income is less than S$22,000, you need not pay for income tax. However, you may still need to file a tax return if you have been informed by Singapore tax department to submit your tax return.
For tax payable for YA 2011, all resident individual tax payers will be given a one-off income tax rebate of 20%, up to a cap of S$2,000.
It is an annual obligation of every eligible taxpayer to file his annual tax returns. The 15th of April is the deadline to submit all completed forms to the Singapore tax department.
You do not need to pay tax if your annual income is less than S$22,000. However, you may still need to file returns if you have been informed by tax authority to submit your tax form. If you have not earned any income in previous years, you still need to declare zero income in your tax form and submit it by 15 April. It is compulsory for you to file tax returns if your annual income is S$22,000 or more.
You can choose to file your returns online or by mail. From February to March, you will receive the appropriate paper tax form from the IRAS, as follows:
1. For tax resident individuals – Form B1
2. For self-employed – Form B
3. For non-resident individuals – Form M
Penalties are imposed for late filing or non-filing.
A Notice of Assessment or tax bill will be sent to you by September after you have filed your returns. The tax bill will indicate the amount of tax you have to pay. If you disagree with your tax amount, you need to inform tax department within 30 days from the date of your tax bill and state your reasons for objection.
You need to pay the full amount of tax within 30 days of receiving your Notice of Assessment. This is despite your notification to the tax authority about any objection. If your tax remains outstanding after 30 days, a penalty will be imposed.