Learn about Singapore withholding tax - provided and presented by Tax Accountants Pte Ltd. Find out about corporate or company cross-border payments, withholding tax rates, withholding obligations, certificate of residence and exemption from withholding tax.
SINGAPORE WITHHOLDING TAX Making Cross-border Payments Under the Singapore income tax law, companies subject to tax in Singapore making certain payments such interest payments, professional and royalties fees to non-resident persons are required to withhold tax and remit the tax withheld to the Singapore Tax Authority within a stipulated period of time. Conversely, receipts of income by companies in Singapore from outside Singapore may also be subject to withholding tax in other tax jurisdictions. Payments typically subject to withholding tax in other tax jurisdictions are interest, royalty and dividend. Singapore Withholding Tax Rates Nature of Income Tax rate Interest, commission, fee or other payment in connection with any loan or 15% 1 indebtedness Royalty or other lump sum payments for the use of movable properties 10% 1 2 Payment for the use of or the right to use scientific, technical, industrial or 10% 1 2 commercial knowledge or information Rent or other payments for the use of movable properties 15% 1 Technical assistance and service fees Prevailing Corporate Tax rate 3 Management fees Prevailing Corporate Tax rate 3 Proceeds from sale of any real property by a non-resident property trader 15% 1 These withholding tax rates apply when the income is not derived by the non-resident person through its operations carried out in Singapore. They are to be applied on the gross payment and the resultant tax payable is a final tax. For operations carried out in Singapore, the tax rates applicable on the gross payment are as follows: - Non-resident person (other than individuals) : Prevailing corporate tax rate - 17% - Non-resident individuals : 20% 2 The reduced withholding tax rate of 10% applies to payments due and payable on or after 01 Jan 2005. 3 If the year in which the services were rendered is different from the year of payment, the withholding tax is to be based on the prevailing corporate tax rate for the year where the services were rendered. For example, if the service was rendered in Dec 2008 and the payment was made in year 2009, the prevailing corporate tax is that for year 2008 (Year of Assessment 2009), which is 18%. For payments made to non-resident individuals, tax is to be withheld at 20% on the gross payment. Non-Resident Directors and Professionals Certain payments made to non-resident directors and professionals may be subject to Singapore withholding tax (eg. remunerations and fees). The Singapore payer is required to: Withhold tax on payment to the non-resident individual; File Withholding Tax Form; and Pay the withholding tax by the 15th of the following month from the date of payment Tax Treaty Benefit / Certificate of Residence Where an Avoidance of Double Taxation Agreement (DTA) is applicable, the rates specified in the DTA of the respective countries would apply. If you are applying the rates in the DTA, you would need a Certificate of Residence from the non-resident payee to prove that it is a tax resident of the treaty country. Please submit a Certificate of Residence from Non- Residents (Claim for relief from Singapore Income Tax under Avoidance of Double Taxation Agreement) that is duly certified by the tax authority of the country of residence, to the Singapore Tax Authority. Exemption From Withholding Tax Certain payments made to non-residents are exempt from Singapore withholding tax. These payments include (but not limited to): Certain software payments Payments for the use of or the right to use information and digitised goods by end- users Payments for satellite capacity Payments for the use of international submarine cable capacity, including payments for Indefeasible Rights of Use (IRUs) Help and Advice Tax Accountants Pte Ltd provides reliable and affordable services in Singapore which include accounting, bookkeeping, payroll, corporate tax services and individual income tax services. Our work processes are designed to be efficient and cost-effective. Our aim is to relieve you of the burdens of statutory compliance and enable you to focus on running and growing your business. Contact us now so we can discuss your requirements; Email us today at firstname.lastname@example.org. For more information, visit: Tax Accountants Pte Ltd 10 Anson Road, #26-04 International Plaza, Singapore 079903 Telephone : (65) 6604 2608 Fax : (65) 6725 8438 Email : email@example.com Website: http://taxaccountants.com.sg/
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