Withholding Tax in Singapore
Withholding Tax, as the name implies, is the tax to be held back or retained when a payment is made to a non-resident company or individual. In Singapore, the payer has to file a withholding tax form and pay the tax withheld to IRAS by the 15th of the second month from the date of payment to the non-resident company or individual. For example, if the payment to non-resident is made on 5th July 2016, the tax withheld has to be paid to IRAS by 15th Aug 2016. If the payment to non-resident is made on 20th July 2016, the tax withheld has to be paid to IRAS by 15th Sep 2016. With effect from 1st July 2016, IRAS requires the payer to file the withholding tax form electronically via myTax Portal. Paper filing is no longer acceptable.
Withholding tax is not applicable for payment to a resident Company or Individual. A company is considered a tax resident in Singapore if the control and management of its business activities is in Singapore. An Individual is a tax resident in Singapore if he is physically present or exercising employment in Singapore for 183 days or more within a calendar year (or stretching continuously over 2 calendar years under the concessionary basis). A Singaporean is considered a tax resident by default and they can only elect to be a non-resident for tax purpose if he or she is physically outside Singapore for 183 days or more.
What Payments are Subject to Withholding Tax in Singapore?
The following payments attract withholding tax if the payment gives rise to an income sourced in Singapore:
- Payment of Interest, commission and fee in connection with any loan or indebtedness;
- Payment of Royalty or other payment for the use of or the right to use any movable property;
- Payments for the use of or the right to use scientific, technical, industrial or commercial knowledge or information or for the rendering of assistance or service in connection with the application or use of such knowledge or information;
- Payment of Management fees and Director’s fees;
- Payment of Rent or other payments for the use of any movable property;
- Payments for the purchase of real property from a non-resident property trader;
- Distribution of real estate investment trust; and
- Structured products (other than payments which qualify for tax exemption under section 13(1)(zj) of the Income Tax Act).
Please ensure that you apply the appropriate withholding tax rate for the above payment, file the correct withholding tax form (i.e. Form IR37 and IR37A to IR37D) and observe the payment due date for withholding tax mentioned above.
Unsure if Withholding Tax is Applicable?
If you are unsure whether tax needs to be withheld and how to submit your withholding tax form and payment to IRAS, we are here to help. Just give us a call at or send us an email.
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Voluntary Disclosure of Failure to File Withholding Tax
If you have not been filing and paying withholding tax even though you should, you may wish to disclose this to IRAS and plead for leniency. We are experience in voluntary disclosure exercise and will be able to help you.