Important Facts about the Provisions of US Taxation in Singapore That Foreign Investors Need To Know

Career aspirants and investors showing their interest to turn to Singapore for establishing their operations and fulfill their goals for many good reasons. The ease of setting up and operating a business conveniently to earn revenue is a prime influencer. Another factor is US taxation in Singapore and many other incentives for foreign investors have made this country a magnet for global finance. Singapore’s tax regime is popularly known for its attractive corporate and personal tax rates, tax exemption measures, absence of capital gains tax, one-tier tax system, and extensive double tax treaties.

The below-mentioned fact is the summary of everything that you need to know about FATCA

• Singapore Personal Taxation

The provisions to personal USA tax in Singapore is categorized into two categories: personal income tax rates for tax residents and non-tax residents. However, for both the categories different tax rates have been applied that is mentioned below:

1. Personal income tax rates provisions for tax residents

You are covered in America tax in Singapore if you meet one of the following conditions:

• A citizen or a permanent resident residing in Singapore with an intention of permanent living not temporarily
• A foreigner who has stayed or worked in Singapore (excluding the company’s director or similar post) for continuous 183 days or more during the year.

• Provisions For Non-Resident Individuals
• Short-term employment duration of up to 60 days- The employment income is exempt from the provision of US tax in Singapore if the individual is in Singapore on a short-term employment duration of 60 days or less. It is important to note that this exemption does not apply to the director of a company, a public figure, or an entertainer exercising his/her profession in Singapore.
• 61 days to 182 days – In this condition, the individual will be taxed on all the income earned in Singapore (with no personal relief) at 15% or max the resident rate, whichever the amount that gives rise to a higher tax amount.
• 20% taxed for the director fees, consultant fees, and all other incomes.

Tax Compliance Criteria of Individuals

Every individual, whether resident or non-resident, is required to file a separate tax return every calendar year on his income, including gains or profits earned through trade, profession, or from employment.

Note that the foreign-source income of a Singapore USA tax resident is exempt from income tax, except for the income earned through a partnership in Singapore. The tax return must be filed in respect of income from the preceding year by April 15.

Singapore Corporate Taxation

Since 2010, the corporate US taxation in Singapore has been fixed at 17% calculated on the basis of the company’s chargeable income, i.e. taxable revenue, allowable expenses, and other allowances. But the tax payable amount can be lower if one takes advantage of all the Government incentives, subsidies, and schemes. By keeping corporate US tax rates in Singapore competitive, Singapore continues to attract a good share of foreign investment. Knowing these crucial facts before moving to Singapore is always essential to make informed decisions and move accordingly. The purpose of this guide is to provide a general overview of Singapore’s US taxation provisions and tax rates. You may find this guide helpful in making your decision.