Taxes are one of the things that plays most heavily on people’s minds when they are thinking about moving abroad. Most people are well-versed in the tax laws of their own countries but know very little about tax laws in other jurisdictions.
It’s quite normal to be unsure of what you will be responsible for, tax-wise, in Singapore. It’s understandable to have questions about when and where to pay income taxes and to have other related questions.
Here are a few points to keep in mind about expats and income taxes in Singapore:
Are all Expats Responsible for Singaporean Income Taxes?
Expats that live and work in Singapore for 183 days or more per year are considered tax residents for that year. Expats that hold Singapore Permanent Resident status are also considered tax residents for any year that they hold that status. These parties are liable for paying income taxes at the standard resident rate, which is a percentage of your income that varies depending on how much income you make. It currently tops out at 20% for those with income of S$320,000 and above.
Both residents and non-residents who make their income outside of Singapore but live in the country are also excluded from paying income tax.
Taxes and Part-time Expat Residents
Anyone working in Singapore for less than 60 days per year does not need to pay income tax in the country. Expats working in the country for between 61 and 182 days per year are taxed at the rate of 15% of the income earned in the country or the standard resident tax rate, whichever is higher based on their income.
When, Where and How to Pay Income Tax in Singapore
When: The income tax is assessed from January 1- December 31 of the previous year. You must file your income tax return by April 15 and the bill should arrive by September. You will be expected to pay your tax bill in full within one month of the bill.
Where: The bill is easy to pay and can be remitted with cash or check at any Singapore Post Office. The bill can also be paid online or by bank transfer.
How: Unlike many countries, Singapore doesn’t deduct taxes from employee pay packets. This means that you have to budget for the expense and pay the taxes yourself. However, you can sign up for interest-free installment plans if budgeting is not your strong suit.
With a little bit of information, paying income tax in Singapore is a breeze. Much like the rest of the infrastructure in this modern island nation, the tax system is designed to be fast, efficient and easy-to-understand.