A Singapore Company – An Overview of Withholding Tax

If your Singapore company pays for services or products provided by a non-resident company or individual and performed in Singapore, the fee for these services or products may be charged a Singapore withholding tax. To find out more, read on an article below.

An overview of Singapore withholding tax

Singapore withholding tax is known as tax deduction at source in other countries refers to the tax withheld and paid to the Inland Revenue Authority of Singapore (IRAS). Under the law, it is required to withhold a percentage of a payment which is paid to a non-resident individual or company in Singapore.

In conclusion, withholding will be applied if:

  • Income derived from a Singaporean source
  • Services provided or work done in Singapore

Do note that under Singapore tax law, income includes wages or allowances as well as accommodation, airfare and other expenses which are incurred on top of actual service fees.

 For Singapore tax purposes, a non-resident company is:

  • Companies incorporated outside Singapore that have operations in Singapore
  • Incorporated Singapore companies that are managed and/or controlled outside Singapore
  • Singapore branches of foreign companies

 So, the place of incorporation of a company is not necessarily indicative of the tax residence of a company.

For Singapore tax purposes, a non-resident individual is:

  • Someone who has spent fewer than 183 days per year in Singapore during the course of providing services in the country.

Types of payments are subject to Singapore withholding tax

Types of payments

Tax rate 

Interests, commissions, and any other debt- or loan-related fees 15%
Royalty, rights of use, and intellectual property 10%
Management fees (prevailing corporate tax rate) prevailing corporate tax rate
Services rendered prevailing corporate tax rate
Rent 15%
Proceeds from sale of any real property by a non-resident property trader 15%
Distributions of taxable income made by a REIT (“Real Estate Investment Trust”) to a unit holder who is a qualifying non-resident non-individual 10%
Technical assistance and service fees prevailing corporate tax rate

Types of payments are NOT subject to Singapore withholding tax

The following types of payments do not attract withholding tax when paid to non-resident:

a. Dividend Payments

b. Payments to Singapore Branches of Non-resident Companies

c. Payments made by Banks, Finance Companies and certain Approved Entities

d. Payments for the Charter of Ships

e. Other Payments

Read on information updated by IRAS, click here

For more information related to withholding tax in Singapore, contact us for a quote.

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