Guide to Singapore Non-Resident Taxes

Taxes for Non-Resident in Singapore

Singapore adopts a territorial basis of taxation, i.e. companies and individuals are taxed on Singapore sourced income. Foreign sourced income will in principle be taxed when it is remitted or deemed remitted into Singapore. A non-resident individual is exempt from tax on foreign sourced income received in Singapore. Director’s fees, consultation fees & all other income. The director’s fees, consultation fees and all other income that you received will be taxed at 20%.

Individuals are either residents or non-residents in Singapore for tax purposes. Generally, an individual is resident if he or she resides in Singapore or is physically present or employed there for 183 days or more in the calendar year. Your employment income is taxed at 15% or resident rate, whichever gives rise to a higher tax amount.

Non-residents are subject to tax only on income from sources in Singapore. The general tax rate for non-residents employment income is a flat 15%, or the tax payable if the person were resident, whichever is the greater. Employment income by a non-resident individual employed in Singapore for no more than 60 days in a calendar year is exempt from tax. Different rates apply to other categories of income. Directors’ fees (not employment income of directors) are taxed at the rate of 22%.

An individual Singapore tax liability may be minimized by one or more of the following arrangements

* Provision of benefits in kind instead of cash allowances. Non-resident short-term visiting employees who exercise employment in Singapore for not more than 60 days are exempt from tax on their employment income

* Individuals with regional functions who are employed by an overseas company may be assessed for Singapore tax purposes only on their income proportionate to their presence in Singapore; for individuals spending more than 90 days p.a. outside Singapore for business, the newly-introduced Not Ordinarily Resident (NOR) scheme may apply (as illustrated in Appendix C: Personal tax scheme NOR)

* Dual employment contracts may be used to insulate offshore employment income from tax

The tax year in Singapore is the calendar year and referred to as the “year of assessment” or “YA”. Income is subject to tax on a preceding year basis, i.e. business income from accounting years that end in calendar year 2009 and investment income earned in 2009 will be taxed in the YA 2010.

Applicable Taxes and Rates