Taxable and non-taxable income in Singapore
Last updated on 3 October 2023
The income tax regime in Singapore is progressive and generally easy for most people to understand. All income earned in or derived from Singapore is subject to personal income tax. These include employment income – salaries, bonuses, director’s fees, commissions, allowances and benefits-in-kind in place of cash. Personal income tax rates in Singapore range from 0% to 22% and are pegged to the level of personal income.
Business owners who draw salaries must also pay taxes on their wages. Only dividends paid out of the after-tax profits of their companies are exempt from tax. Despite more foreigners setting up family offices in Singapore, some may choose to purchase properties under their name. Any rental income derived from property ownership is subject to income tax. Such income tax is separate from property tax, a tax on property ownership.
Most income received from overseas is not subject to tax in Singapore. However, overseas income is taxable if received through partnerships in Singapore or if it is incidental to the individual’s employment in Singapore.
Most profits from selling property in Singapore, buying and selling shares or other financial instruments and payouts from insurance policies are not taxable. However, exceptions exist, and unsure individuals should check with a tax expert in Singapore. Accounting firms that also provide immigration services in Singapore are good places to start, especially for foreigners intent on relocating to and starting a business in Singapore.