Taxes in Singapore, Singapore Home Business Resources

Taxes in Singapore

The taxes in Singapore compiled by us is for quick reference by investors, companies, small businesses, or for those employees working here. The scope includes Singapore business taxes and personal income tax and it also incorporates the recent Singapore Budget Statement 2005.

Singapore has shifted quickly from direct to indirect taxes over the years. The GST (Goods and Services Taxes), which had implemented some year back at the rate of 3% has increased to 5% with effect from 1st January 2004. Conversely, the corporate tax has been reduced from 30% to 20% in YA 1993 and YA 2005 respectively. The recent budget 2005 will lower the personal income tax rate over two years, from the current 22% to 21% in YA2006 and 20% in YA2007. We expect the shift from direct to indirect taxes will continue in the future years.

Personal Income Tax - Budget 2005

Chargeable Income band

Current marginal tax rates

Marginal tax rates for y/a2006

Marginal tax rates for y/a 2007

0-20000

20,001-30,000

3.75

3.5

30,001-40,000

5.75

5.5

40,001-80,000

8.75

8.5

80,001-160,000

14.5

160,001-320,000

>320,000

In Budget 2005, the Government will lower the top personal income tax rate to 20% over two years, from the current 22% to 21% in YA2006 and 20% in YA2007. Taxpayers in the marginal tax rates for all other income brackets will also benefit from reduced rates. The move as stated in the Budget statement is to attact internationally mobile talent to Singapore.

Corporate Income Tax

Under Singapore's tax laws, a company will be taxed on any income accruing in or derived from Singapore or received in Singapore from outside Singapore, regardless of the company's tax residence status in Singapore. A company is taxed at a flat rate of 20% on its chargeable income for YA 2005 onwards.

Goods and Services Tax (GST)

For GST, the standard-rate of tax is 5% from 1st January 2004.

As Quoted from IRAS ,
"GST is chargeable on any supply of goods or services made in Singapore where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him. This means that local supplies of goods and services made by a taxable person are subject to GST at the standard rate except where the supply is exempted or excluded from tax".

To know more about Singapore Taxes, please visit IRAS website at http://www.iras.gov.sg/