Singapore Withholding Tax
Introduction to Singapore Withholding Tax
Withholding tax is a tax on payments made to non-residents including employees, business partners and overseas agents. Here is a quick overview of withholding tax and how it affects your business.
A non-resident is liable to pay income tax on Singapore-sourced income. Under the law, a person has a legal obligation to withhold a percentage of the payment, when he makes payments of a specified nature under the Singapore Income Tax Act, to a non-resident.
When you make payments of a specified nature to a non-resident, you must withhold a certain percentage of that payment as "withholding tax". What Types Of Payments Are Subject To Withholding Tax?
Types of payment include:
- payment of commission fees to overseas agents
- payment of director’s fees to non-resident directors
- payment of professional fees to offshore accountants
Section 45, 45A, 45B & 45D
- Management fees and service fees
- Rental from use of movable properties;
- Non-resident director's remuneration;
- Gains from real property transaction
- Supplementary Retirement Scheme (SRS) withdrawal made by foreigners and Singapore permanent residents.
- Professional service fees for non-resident professionals.
How are the Singapore Withholding Tax Rates?
It depends on the type of payment you are making.
- For director’s salary, management fees, technical and other service fees, the withholding tax rate is the same as corporate tax rates. The current corporate tax rate is 20%.
- For time charter fees, voyage charter fees and bareboat charter fees, the withholding tax rate is 1% - 3%.
- For other types of payments, the withholding tax rate is 10% or 15%.
Note: Where a double tax agreement is applicable, the rates specified in the agreements of the respective countries would apply.
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