There are separate taxation rates for individuals and corporations in Singapore. For corporations and other businesses, the tax rate on profits above 300,000 SGD is 17%. Anything below that level is taxed at a rate of 8.5%. As was mentioned before, there are no capital gains taxes and no taxes on dividends to shareholders.
Personal taxation rates are as follows. The tax rate on the first 20,000 in SGD is zero. The tax rate on the next 10,000 in income is only 2%. The rest of the tax code is very similar. Tax payers are not taxed on dividends.
Obviously, these low rates make Singapore a very attractive place for companies and individuals to do business. Not to mention there are a number of tax relief programs and incentives for people inside and outside of the country to invest and do business here.
Some Key Facts to Know About the Singapore Tax Rates
The country of Singapore operates on a territorial basis. This means that individuals and companies get taxed based mainly on Singapore-sourced income. Any income that comes from a foreign source can be taxed when it is remitted into Singapore unless it was already subject to a tax of 15% or more in another jurisdiction.
The cap rate of corporate taxation in Singapore is one of the very lowest in world, at 17%. This accounts for why it is very attractive for foreign investments to do business here. Personal taxation rates for individuals is capped at 15% for non-residents and 20% for residents. Again, this is one of the lowest tax rates to be found anywhere and accounts for the boom in the economy and the growing population.
Since capital gains are not taxed, capital loss expenses are not allowed as a deduction. Income from rental properties, royalties, and interest income are subject to a withholding tax. Deadlines for filing a personal income tax statement is April 15th. This covers the previous year from January to December.
Estate taxes were abolished in 2008, and taxes on motor vehicles are rather high and for good reason. They are taxed at a high rate to discourage car ownership and the road congestion that goes along with it. Singapore also has some of the taxes that are common in other countries such as a type of sales tax and an airport passenger service charge.
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