Taxation in Singapore
Singapore has a mild tax regime and over recent years has introduced tax regulations favoring foreign investors. The country has introduced various incentive schemes to attract investment, enabling the growth of businesses.
Singapore’s taxation system operates on a territorial basis. On an individual level, only local income derived from within the jurisdiction is taxable. Regardless of residence status, all foreign income is exempt, even if remitted to Singapore (unless remitted through a partnership in Singapore).
A Singaporean citizen is considered a tax resident if the individual normally resides in Singapore. A foreign resident is considered a tax resident if the individual is physically present or is employed for 183 days or more per tax year.
The ‘Not Ordinarily Resident’ (NOR) scheme is aimed at attracting global skills and provides various tax concessions for a five year period for those who have not been resident for three consecutive years previous to the application.
Singapore has a very narrow tax base of taxable income. Personal income tax rates are low and levies are at progressive rates of up to 20%.
Capital gains taxes are only levied in very limited circumstances. There are no gift taxes and estate duty was abolished in 2008.
The standard corporate tax rate for 2015 is 17%. Companies, both resident and non-resident, are taxed on income remitted to Singapore. Certain exemptions apply to resident companies regarding foreign remittances.
In 2008, a one-tier system of taxation was introduced providing for the exemption of income tax on dividends, regardless of the method of paying out.