The Singapore personal income has been known for its lower tax rates. However, in the recent Singapore Budget 2015, Singapore witnessed the first increase in personal income tax rates after about a decade. The budget proposes enhanced subsidies to focus on a better future of Singapore. Whilst, to accommodate the rising demand of funds increased taxes are levied on wealthy Singaporeans.
The Singapore Personal Income Tax System is one of the lowest and friendliest in the world. The budget released every year by the Singapore ministry comprises of personal income tax rates that are progressive in nature. In fact, the budget of 2013 announced a personal income tax rebate of 30% for Singapore residents below 60 years of age and 50% tax rebate for Singapore residents aging 60 years and above, subject to a cap of S$1,500.
Singapore Personal Income Tax Rates 2015
The table below shows the personal income tax rates of Singapore as of 2014, before tax rebate:
Personal Income Tax Rates Applicable for YA 2012 to YA 2016 Chargeable Income (S$) Tax Rate (%) Less than 20,000 0 20,001-30,000 2 30,001 to 40,000 3.5 40,001- 80,000 7 80,001- 120,000 11.5 120,001-160,000 15 160,001-200,000 17 200,001-320,000 18 Above 320,000 20
Personal Income Tax Rates Applicable for YA 2017 & Onwards Chargeable Income (S$) Tax Rate (%) Less than 20,000 0 20,001-30,000 2 30,001 to 40,000 3.5 40,001- 80,000 7 80,001- 120,000 11.5 120,001-160,000 15 160,001-200,000 18 200,001-240,000 19 240,001-280,000 19.5 280,001-320,000 20 320,001 and Above 22
Tax Treatment on Benefits Provided By the Singapore Employer
During the period of employment in Singapore, employers are entitled to offer certain fringe benefits to his/her employees, which are taxable under the Singapore taxation system. Fringe benefits are the gains and profit that employees receive from their employer in Singapore. These benefits are taxed under special concessionary basis, thereby resulting lower income tax rates on them. Below mentioned are some of the notable tax benefits:
- Medical reimbursements for dependents other than yourself, your spouse and your children
- Housing allowance
- Overtime (OT) payments
- Vehicle provided by the employer as conveyance.
- Fixed monthly allowances for transportation purposes.
- Allowances given by the employer for business trips abroad (Per Diem allowances).
- Fixed monthly allowances for meal or food.
Treatment of Tax on Overseas Income
In general, the income earned overseas by any Singaporean employee on or after January 1, 2004 is not taxable, as per the guidelines put forth by IRAS (Inland Revenue Authority of Singapore). However, there are certain exceptions wherein the overseas income becomes taxable
- If the overseas employment of an individual is in relation to his/her Singapore employment.
- If the income earned overseas is received through partnerships in Singapore.
- If an individual is working overseas at the behest of the Singaporean government.
Due Date for Personal Income Tax Filing
The tax year of Singapore is from January 1 to December 31 and the due date for filing income tax returns is April 15 of each year. The assessment of income tax is done on the preceding year basis. The non-resident individuals of Singapore are taxed at a flat rate of 15% or according to the existing income tax rates, whichever amounts to higher income tax.
KJK Corporate Solutions provides you with income tax planning services, guidance for saving tax on your personal income and many more Singapore tax services. Furthermore, we also help you in the process of filing income tax returns with IRAS along with other related formalities.
Mr. Kaliyaperumal Jayaram
KJK Corporate Solutions Pte. Ltd.
+65 9488 5722 (Mobile) / 6423 1078 (Office)